Ebay President, John Donahoe has announced that its failing VoIP subsidiary, Skype will likely be heading for the chopping block, after the calamatous purchase failed to live up to expectations. Ebay acquired Skype for $3.1bn back in 2005, in the hope that internet phone service would improve communication between its user-base, and despite rapid growth to around 309 million users, Skype has not had the desired impact on Ebay or its other properties, according to Simon Slade.

Donahoe remarked on the proposed dropping of Skype..

“If the synergies are strong, we’ll keep it in our portfolio. If not, we’ll reassess it.”

..further indicating that Ebay has definite plans to ditch the service and concentrate on other things. Donahoe went on to assert that Skype is a profitable stand-alone business, with a projected $500m revenue for 2008, but it no longer fits the long-term vision of the company.

Skype is a software program that allows users to make calls over the Internet to other Skype users free of charge. Calls to landlines and cell phones can be made for a fee. Additional features include instant messaging, file transfer and video conferencing. It was created by entrepreneurs Niklas Zennström,Janus Friis and a team of software developers based in Tallinn, Estonia.