eBay all but admitted Skype had failed to pump enough revenue back into eBay to justify its $2.6bn purchase price. It said the charges were the result of the updated long-term financial outlook for Skype, in a regulatory filing with the US Securities and Exchange Commission.

Among its anticipated charges is a 375m euro ($530m) payment to settle its future obligations to Skype, as part of an earn-out agreement signed when eBay acquired Skype in October 2005. eBay said $530m was reasonable given the progress and anticipated rapid growth of Skype’s active user base.

The earn-out agreement may also include as much as $1.7bn worth of payments based upon active user, revenue and gross profit targets for next year and the first half of 2009.

Earn-out agreements are often included when the buyer and seller significantly disagree about the value of the business, particularly if the future financial performance of the business is expected to increase dramatically.

eBay said it would also pay an additional $900m impairment charge related to Skype’s valuation. All charges will be taken during the third quarter and no additional expenses related to the matter are expected, eBay said.

Zennstrom, who co-founded Skype in 2003, will become non-executive chairman of Skype’s board.

eBay chief strategy officer Michael van Swaaij will be Skype’s acting CEO until a permanent replacement is found. eBay said it was using a professional head-hunting service to find that replacement.

When eBay bought Skype, its chief executive Meg Whitman said the deal would create synergies between eBay’s online auction service and Skype’s free PC-to-PC and paid VoIP services. The first integration of Skype within eBay.com was called Skype Me, which was a Skype button added to seller’s listing so that buyers and sellers could communicate via voice or text. But there hasn’t been much else since then.

Earlier this year, Skype, as a separate entity, added new features to bolster its Skype for Business enterprise offering.

In mid-August, Skype suffered a widespread service outage that left thousands of its users unable to use its free PC-to-PC VoIP service for as long as three days. Skype blamed the problems on an algorithm glitch, but the stoppage attracted high-profile negative press in the US and elsewhere.

Mark Main, senior analyst at Ovum, said at the time that the outage may point to ongoing service issues with Skype’s service and that Skype’s quality had seemed to be getting worse in recent months.

Our View

When eBay bought Skype, it wasn’t clear just how the deal would benefit eBay beyond adding click-to-call capabilities within online auctions. Turns out, that was about the extent of it.

At the time, eBay figured that Skype’s tremendous and growing popularity could be monetized. And, indeed, Skype’s user base had continued to swell: from about 52 million users in 2005 to about 220 million or so users in 2007.

But the bulk of Skype members use it as a free service and a secondary telecom source because the service is not as reliable or convenient as a cell phone or traditional PSTN landline. As such, Skype’s revenue grew comparatively slowly: from $60m in 2005 to $90m in the second quarter of 2007.