Buy Ebay

Now, or soon. Tomorrow would be good.

The company just announced that it will spin out Skype via IPO. I was kind of believing the NY Times and others who thought that they were going to sell it back to the founders, which would have made sense. Frankly anything would have made sense since the purchase didn't make sense in the first place and Ebay wasn't monetizing it. One could surmise that they bought it because it was cool and they could afford it.

Earlier this week, it was reported that Ebay has disposed of StumbleUpon, another nifty asset that they weren't really doing anything with. Stumble is a social web surfing site that gives users one-click web site recommendations all day long if you want them. It's a tremendous time waster but is sticky if you're bored and has a revenue model.

I am an infrequent Ebay user and use StumbleUpon from time to time. I want both to be successful and think they will be, but the reason that I like Ebay right here right now is that it is getting rid of them. Ebay's revenues have decelerated for the last 5 years and will be flat to down this year. It looks as though their core market, consumer-to-consumer auctions, has matured.

If you're a growth company that is not a growth company any more, what to do? Focus on cash flow and driving your core asset if you have one. They do. The fact that they were wasting time on other "stuff" is more than a distraction. The spinoffs signal, to me, that they are willing to get back to their core competence. The stock is not expensive. I haven't liked it for years. I do now.

Skype - This might work

"If we do it we will have to do it incredibly well,"
Scott Durchslag - Skype CEO

Everybody is reporting this morning that Skype is rolling out a Skype app for iPhone and Blackberry tomorrow at the CTIA show. I commented last week that Skype for business would be a tough proposition. Skype for high end phones is a natural, but the above quote pretty much defines the market opportunity.

Apple and RIMM have raised the bar consistently for functionality on handheld devices. The first version of any app usually isn't perfect. If Skype doesn't get one almost perfect very soon, someone else will, which will not only stick a fork in their smartphone aspirations but also jeopardize their 450 million user installed base.

TALF Rally

Futures are up big as the public/private partnership to buy toxic assets idea is being met with some optimism. At least it's finally out there. The question remains whether it will find any participants, as under-the-radar institutions don't want to get be subject to TARP-like fallout.

It looks like CNBC is very excited about TALF since it is very comlicated and gives them something to talk about.

The dollar is still getting hit but will not go to zero.

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Skype is targeting the business market. Good luck. We have been using it for years and the quality stinks. Free only gets you so far.