eBay to divorce Skype on Wall St

Hangs up on Web 2.0 telco dream

eBay plans to spin off Skype sometime in 2010, having failed to turn itself into a Web 2.0 telecoms hybrid.

eBay said today it's targeting an initial public offering for Skype in the first half of next year. The IPO idea follows recent rumors that Skype founders Niklas Zennstrom and Janus Friis were rounding up private equity partners to buy back their firm for $1.7bn. The IPO might also be a scheme for eBay to drive up the bidding price and make some of its money back.

The company has been looking for ways to offload its VoIP outfit since at least the beginning of this year, if only it could find someone willing to pay the right amount.

eBay's chief executive John Donahoe today cited "limited synergies" between the online auction house and VoIP engine, adding he thinks Skype will do better as a stand-alone publicly traded company. Donahoe said he's spent a year meditating on Skype's fate since he replaced Meg Whitman as CEO in April 2008.

Whitman is now campaigning to become governor of California based on her "solid" achievements as a business chief whilst running eBay.

The original bright idea behind Whitman's $2.6bn purchase of Skype in 2005 was to blend a communications unit inside its shoe, automotive and Star Trek memorabilia storehouse.

It was the kind of un-baked thinking that Silicon Valley championed as the very epitome of "rational exuberance". That is the opposite of the "irrational exuberance" of the dot-com era. Loosely translated: enthusiasm, without the crazy.

Four years later, eBay has been unable to logically integrate the technology into its core business. Turns out crazy is still crazy, no matter how rational it might seem during a tech bubble.

In 2007, eBay was forced to eat a $900m charge based on the decreased value of Skype.

eBay said Skype's 2008 revenue was $551 million, up 44 per cent from 2007. The company also expects to top $1bn revenue by 2011.

Perhaps the company is hoping an IPO announcement set for the distant future could work out two ways: either it gets investors excited about making Skype a separate firm, or it will urge those thinking about buying the company outright to reach a little deeper into their wallets. ®

Carphone buys Tiscali UK for £236m

Carphone Warehouse is set to become Britain’s second largest broadband provider after it agreed to pay £236m in cash for the UK assets of Tiscali, the Italian telecoms group.

Carphone said it would be funded by its existing debt facilities and would raise its earnings earnings per share by 10 per cent in the current financial year to March 2010.

The move will also see Carphone move ahead of Virgin Media to become the UK’s second largest broadband supplier behind BT. It is currently third with 2.7m customers at December 31, according to Enders Analysis, the research group, but ahead of British Sky Broadcasting in fourth. Tiscali, the country’s fifth largest broadband supplier, has 1.7m customers but has been losing customers.

The news sent Carphone shares 12p or 7.6 per cent higher to 170p in afternoon London trading while shares in Tiscali, which also announced plans for a capital hike of €210m, were 3.7 per cent higher in Milan at €0.4465 in Milan.

A deal for Tiscali UK has been widely anticipated by investors fearful that it lacked the economies of scale to survive in the Italian and UK broadband markets.

But Tiscali has come under pressure in the last year to sell its UK assets to reduce its onerous borrowings. At €601.1m ($792m), Tiscali’s net debt is more than three times its earnings before interest, tax, depreciation and amortisation. The uncertainty has meant the shares have lost more than 80 per cent in value in the last 12 months.

Carphone made an informal offer of £550m in May last year, but it was rejected. Tiscali subsequently entered into exclusive talks with BSkyB over a sale but talks were called off in March with the parties unable to agree a price.

The deal is set to give Carphone around 25 per cent of the UK residential broadband market. Analysts at Citi argued that anything below £250m meant Carphone was getting the 1.8m customer case cheaper than it could otherwise acquire customers in the domestic marketplace.

“Given UK broadband penetration is about 65 per cent, mergers and acquisitions is the only way to grow the customer base in bulk,” Andrew Lee, analyst at Citi, told clients yesterday.

Analysts have also pointed out that the scale of the customer base would give Carphone in a stronger negotiating position with BT on wholesale fibre rates if fibre optic-based broadband services became an important service in the UK.

Tiscali said the deal had helped it agree the key terms of its debt restructuring plan. In addition to the proceeds from the sale of Tiscali UK, it will also raise up to €210m to strengthen its capital structure.

Woman to virtual ex: 'I won't be ignored!'

Kimberly Jernigan--a 33-year-old woman from North Carolina--was apparently distraught after her online relationship with a 52-year-old man from Claymont, Del., came to an end.

The pair apparently met through the online community Second Life and began a virtual relationship. The two finally met in reality several months ago, and the alleged victim ended the relationship, sending Jernigan into a downward spiral.

In early August, Jernigan allegedly drove to the victim's Pennsylvania workplace and attempted to kidnap him at gunpoint, according to local news station CBS3.com. When she was unsuccessful, according to the report, she returned two weeks later to track down the victim's Delaware address, and posed as a postal worker to do so. After four days of searching, authorities said she found residence in the Whitney Presidential Towers on the 7100 block of Society Drive in Claymont.

On August 21, police said, Jernigan broke into the unnamed victim's apartment with a Taser, a pair of handcuffs, a BB gun, her dog, and a roll of duct tape. He wasn't there, so she waited. When the virtual ex arrived home he saw what looked like a laser beam projecting on his chest. He immediately fled the apartment and contacted the Newcastle County Police.

When police arrived they said they found Jernigan's dog, Gogi, bound with duct tape in the bathtub of the victim's bathroom. Jernigan's reason for gagging her pooch--"he was making too much noise." The dog was said to be uninjured, but the ASPCA is looking into possible charges of animal cruelty.

Approximately an hour after the incident, authorities in Maryland spotted Jernigan's vehicle at a rest stop on I-95. She was taken into custody after a brief struggle. Jernigan is currently facing charges of attempted kidnapping, burglary, and aggravated menacing, CBS3 said.

What's the lesson here, kiddies? Keep your virtual relationships virtual and don't bring it into the real world or some innocent animal may be harmed in the process...

BT's Mayfair exchange downed by burglary

You may have Madonna to thank

BT's Mayfair exchange was burgled last night, leaving thousands of homes and businesses in central London without internet access this morning.

The raid cleaned out routers, networking cards and fibre at about 9pm on Wednesday, Reg sources said. According to data at Samknows, the exchange serves about 3,000 residential premises and 4,200 non-residential premises.

A BT spokesman confirmed police are investigating "an incident" at its Mayfair site, which is in Farm Street, near Park Lane. He said BT was unable to estimate yet when customers will see service restored but that more information would be released later today.

Customers including ISPs who resell BT Wholesale broadband lines have been told that new hardware is being sourced by engineers.

A spokesman for the Metropolitan police said a public statement is being prepared. We'll update this story as soon as we have it.

Update 11.34am

BT sent this statement:

We can confirm there was a break-in at our Mayfair Telephone Exchange last night (Wednesday), this is a now an ongoing police investigation and therefore we are unable to comment further.

BT apologises for any disruption caused to our customers. Our engineers are working around the clock to ensure that full service is up and running as soon as possible.

The Met is still working on its line.

Update 1.50pm

Police told El Reg they were called to the Farm Street exchange at about 1am this morning. Investigators from Central Westminster CID are working with BT to establish what was taken. No arrests have been made and police are not prepared to discuss the value of what was taken.

The Daily Mail offers the theory that the raiders used the scrum caused by a party thrown by Guy Ritchie and Madonna at the pub next door to the exchange as cover.

Pay-by-phone commerce coming closer

The global trade body for the mobile industry and a European monetary organisation have signed a pact to speed up the deployment of handset payment services in Europe.

The GSM Association (GSMA) and the European Payments Council (EPC), which represents 8000 banks in the EU, will now jointly co-ordinate efforts to get phones paying for just about everything, from impulse purchases in shops to restaurant meals.

The programme has been called, simply, the Pay-Buy-Mobile initiative. But, in order to ensure such services run smoothly, the pair recognises the need for a “Trusted Service Manager” clearing house to help manage cash-flow between banks and network operators.

Although the partners haven't said which form or forms of contactless payment technology they envisage being used by mobile phone users, Near Field Communication (NFC) and Universal Integrated Credit Card (UICC) have been hinted at.

UICC is a smartcard used in mobile terminals in GSM and UMTS networks to allow them to communicate securely with the banks. NFC devices can be built directly into mobile phones to allow short-range wireless communications between, say, a mobile phone and reader, much like the Oyster card system used on the London Underground.

In Japan, mobile-phone based payments are already thriving. So much so that Japanese carrier KDDI and the Bank of Tokyo recently jointly created a bank specifically designed to create accounts for anyone using cashless-enabled mobile phones.

Welsh Darth Vader dodges jail

A Welsh man, Arwel Wynn Hughes, from Holyhead has avoided jail for attacking two would-be Jedis with a crutch while disguised as Darth Vader.

Hughes, whose attack was captured on video, was sentenced to two months in prison suspended for 12 months.

Two keen Welsh Jedis were filming themselves having a pretend light sabre fight in their garden. Hughes leapt over a low garden wall with a binbag round his shoulders while wielding a crutch and shouting "Darth Vader".

After hitting the two, both members of Holyhead's Jedi Church, Hughes departed over the garden wall saying: "I'm only joking..."

The two Jedis complained of a headache and a bruised thigh after the incident. We wonder about the Jedi credentials of these two if they were defeated by a drunk bloke armed with a crutch.

The court heard Hughes had no memory of the incident since he had drunk most of a ten-litre box of wine. He only realised what had happened when he read about it in the local paper. When arrested he admitted being extremely drunk at the time.

Hughes admitted two charges of common assault. He will undergo treatment for his drink problem and must pay the two Jedis £100 each and £60 costs.

The Beeb has footage of the attack here.

GPS tracking fights teenage trauma

Mobile phones and GPS tracking technology have been combined to track the whereabouts of unruly children, as part of a study into the health risks posed to tech teens.

In the study, 15 teenage girls were tracked by their mobile phones for one week. The researchers claim the study wasn’t designed to provide parents with information about where, say, Charlotte actually was when she was supposed to be home for tea.

Instead, the information is being compiled to study the health risks posed to teenagers. As the girls took their phones with them wherever they went, the teenagers’ movements could be accurately plotted on a map.

Dr Sarah Wiehe, who led the research, said that mobile phones and GPS technology help parents to better understand “where adolescents spend their time and what they’re doing”.

She claimed that, by studying teenagers' movements, parents will be able to intervene at points where their kids are most likely to, say, drink alcohol or smoke. Presumably parents will also know when their kids are at Make Out Point or hanging around on street corners, possibly with biker gangs.

Suspicious wives, or husbands, can already use GPS tracking technology to keep tabs on wayward partners. The Social Network Integrated Friend Finder (SNIFF) application can be accessed through Facebook or a mobile phone to provide users with a detailed map of someone’s location, or at least the location of their mobile phone.

SNIFF, created by US firm Useful Networks, can only be used if someone gives their permission for their whereabouts to be tracked. Each GPS tracking request costs 75p (€1/$2).