Even in the midst of lawsuits from Skype’s original founders regarding the use of its technology, EBay CEO John Donahoe is hell-bent on jettisoning the unit. This turbulence comes just as EBay’s long-term outlook is starting to look up.

Earlier this month, EBay announced that it would sell off Internet phone company Skype to a group of investors. The move wasn’t all that surprising since EBay has been struggling in terms of growth and Skype is outside of its core business.

What was more surprising was the termination of EBay’s license to use the peer-to-peer technology used in Skype by a U.K.-based company owned by Skype’s original founders and the subsequent lawsuit. It would appear that the founders are trying to either kill the deal or kill Skype altogether.

However EBay CEO John Donahoe assured attendees of a National Retail Federation summit that, “this deal is going to close.” The company hasn’t publicly stated a response to the lawsuit other to say that it’s not a show stopper.

This news as Donahoe is working to re-invigorate the one-time Wall Street darling. EBay has started to see an uptick in growth of transactions through PayPal that has resulted in rising stock prices.

Shares of EBay are up 110 percent since March and Donahoe is likely attempting to ensure that the company’s turnaround won’t lose momentum by flubbing the Skype deal. EBay plans to unload Skype in a deal valued at $1.9 billion.

Donahoe is also cautiously optimistic about the upcoming holiday shopping season. While he doesn’t see a full revival, he thinks that spending is stabilizing and doesn’t expect to see as much deep discounting this holiday season.

The uptick in PayPal payments processed by EBay could be an interesting indicator of small business strength in the marketplace. Could it be that EBay sees the light at the end of the economic recovery and is mounting its own comeback along with it?

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Entry was posted on Thursday, September 24th, 2009 at 9:34 am under Ecommerce.

Read more entries by Dave Jeyes.
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