The Great Debate UK

from The Great Debate:

Can sleeping giant Skype reinvent itself?


eric_auchard_thumbnail2.jpg -- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

Do once-hot Internet start-ups who miss a date with destiny ever truly get a second chance? History says no, even for once-great names like Netscape, AOL and MySpace.

Skype hopes to be the exception. On Tuesday, a group led by top Internet financiers in Silicon Valley and Europe agreed to pay eBay $1.9 billion in cash for a 65 percent stake in the one-time web calling sensation.

The deal values Skype at a face-saving $2.75 billion, well above the $1.7 billion at which it has been valued on the ecommerce giant's books. Ebay also stands to keep a 35 per cent stake in the company.

But that overlooks the humiliating $1.4 billion eBay has written off on the original deal. Four years ago, eBay promised to pay up to $4.3 billion for Skype, but it later scaled back the total payout. All told, it makes Skype one of the biggest value destroyers of any Internet merger since the last days of the era.

from The Great Debate:

HP has to look beyond cost cuts soon


EricAuchard.jpg-- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

The stock price seems to be the only thing growing at Hewlett-Packard, the world's largest computer company. HP shares have risen 75 percent this year, despite few signs of a revival in technology spending.

The company, best known as a supplier of computer printers, has suffered a 19 percent drop in sales of hardware and ink supplies. In good times, this produced the bulk of HP's profits, but it's the financial engineering under Mark Hurd, the company's chairman and chief executive, that seems to be the main driver now.