So far, we have learnt that eBay’s investment on Skype proved futile. In the second quarter, Skype made growth but brought no profit for eBay. Here is a RBC Capital Markets’ report, which predicts low growth rates for Skype in the third quarter. The growth rate is low both in terms downloading the Skype service and registering new users.



According to Jordan Rohan, an analyst at RBC Capital Markets, eBay’s Skype division would be experiencing an end to its high-powered growth rate.



Skype will report 51 million downloads of its free software during the third quarter. This would be less than the second quarter, the analyst explains. Further, the company will add 18 million new users in Q3, the number is equal to that of second quarter.



So what does it imply for eBay? The market analyst conclusively says,

eBay may need to spend on marketing or offer price promotions to reaccelerate growth heading into 2007. If eBay chooses to do both, margins would fall short or our revised forecast.





Skype’s revenue will also come down to $400 million from $475million in the third quarter. Consequently, eBay’s earnings per share will reduce to $1.18 from $1.20 for 2007, the analyst predicts.











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