Internet telephony pioneers stumble

Posted on October 3, 2007  /  1 Comments

Last updated 10:01am (Mla time) 10/03/2007, Philippine Daily Inquirer

NEW YORK–In spite of its global popularity, Internet telephony (VoIP), which is almost free for users, has not become a gold mine for its pioneers such as Skype and Vonage.

Popular online auction firm eBay, which bought Skype two years ago for $2.6 billion, affirmed that message in a costly way earlier this week when it devalued the once-darling firm, knocking $1.43 billion off its value.

The accounting move was long anticipated.

“We are glad to see eBay admit that it overpaid for Skype and that much-hyped synergies have not yet materialized to any large extent,” said global financial services firm Cantor Fitzgerald.

“We have struggled with the economics of the Skype transaction relative to the financial expectations for the business.”

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1 Comment

  1. I lived through the wild west days of trying to get lower cost telecom services with competitive local exchange companies and was burned badly. Now I feel like this is a déjà vu – as I have Vonage service . I am tired of going with service providers who are either not well funded or in this case not well endowed with technology that is actually their own. The alternatives seem to be limited as many other providers are small or going under (just look at Sunrocket). I hear there are some good providers that are stable because they are well funded, e.g. Net2Phone, but I am very gun shy. What a mess!