Ebay cut value of Skype investment

Ebay said last night it would cut as much as $1.2 billion off the $4

Ebay said last night it would cut as much as $1.2 billion off the $4.3 billion potential price it agreed to pay for web-based phone-calling service Skype two years ago.

The writedown on the value of the deal came as Ebay said Skype co-founders Niklas Zennstrom and Janus Friis had resigned as executives, and it marks a tacit admission of lacklustre returns from Skype since Ebay acquired it two years ago.

Ebay said in a US regulatory filing it would pay Mr Zennstrom, Mr Friis and other Skype shareholders €375 million and take a charge of $1.4 billion against Ebay's third-quarter results, due out later this month.

Shares of Ebay hit an 18-month closing high of $39.66, up 1.6 per cent yesterday, reflecting the lower price the online auction leader is paying for Skype and the greater flexibility Ebay may now have to put Skype on a new course, analysts said.

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The stock is up more than 20 per cent since late August in anticipation of strong quarterly results.