EBay planning spin-off of Skype through IPO

EBay Inc plans to spin off its Skype unit, acknowledging that the Web telephone service does not fit with the rest of the company, in an indictment of former CEO Meg Whitman's acquisition strategy.

EBay, whose shares rose 3 percent in after-hours trade, said on Tuesday it was planning an initial public offering for Skype by the first half of 2010, a move widely seen as putting a 'for sale' sign on the unit to fetch potential buyers.

Two people familiar with eBay's thinking said the online auction company could seek substantially more than $2 billion for Skype. But some analysts doubted that it could fetch so much in current markets.

The San Jose-based eBay bought Skype in 2005 for $2.6 billion, in what was its biggest ever acquisition. John Donahoe, who became eBay chief executive a year ago, has vowed to evaluate whether the telephone service was a good fit with the rest of the company, which includes Web payments service PayPal along with its core auctions business.

"We believe operating Skype as a stand-alone publicly traded company is the best path for maximizing its potential," Donahoe said in a statement on Tuesday.

Many on Wall Street raised eyebrows when Whitman purchased Skype, skeptical of the high price and eBay's claims that its customer base of buyers and sellers would embrace Web phone calls.

"That Skype didn't fit into the rest of the business was apparent from day one," said RBC analyst Stephen Ju.

"The book value of this asset is about $1.7 billion. It wouldn't surprise me if they would try to get something like $2 billion," he said. That implies a roughly 10 times EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) multiple based on Skype's 2011 revenue target of $1 billion and its current operating margins of 20 percent, he added.

Ju noted it was hard to put a value on a Skype IPO given the uncertainty over the state of the market in 2010.

Microsoft Brands Office 2010, Releases Exchange Beta

Microsoft will release a beta of Exchange Server 2010 on Wednesday, the first product that enterprise customers will see from the next version of Office.

Microsoft is also going public with the official branding of its next productivity suite -- Office 2010. Until now Microsoft had been referring to it as Office 14, but the new name had been widely expected.

Exchange Server should be in full release by the end of the year, but the rest of the products in the suite won't be out until early 2010, said Julia White, director of the Exchange product management team.

Microsoft will release technical previews of other products in the suite, including Office 2010, SharePoint Server 2010, Visio 2010 and Project 2010, in the third calendar quarter. A technical preview is tested by hundreds of thousands of users, while millions of people will have access to the Exchange 2010 beta, White said.

Another of the Office System products, Office Communications Server (OCS), is on a different schedule. The latest version, OCS R2, was released only in February, and Microsoft has not discussed plans yet for the next big upgrade.

Microsoft will begin the process of upgrading its hosted version of Exchange, Exchange Online, at the same time it ships the Exchange 2010 on-premise product. Exchange Online customers will have the ability to determine when their users are upgraded to the new Exchange 2010 capabilities in Exchange Online, starting in the first half of 2010.

Now that Microsoft offers Exchange as both a service and an on-premise product, it is beginning to align the features of the two offerings more closely, White said. When the company makes architectural decisions about the server product, it thinks about the service as well, she said. "We're thinking about them in a unified way."

It made it easy in Exchange 2010 to automatically configure access for certain employee roles, such as a compliance officer or human-resources manager, White said. "You can set it up [for people] to just have access to the mail boxes they need to search, and can turn that access on and off very quickly," she said.

Lindsay Lohan looks for love on the Web

Lindsay Lohan is looking for a lover who does not mind her alleged alcoholism or electronic monitoring bracelet, or so the famously troubled Hollywood actress said in a mock Internet dating profile.

Lohan, whose recent breakup with Samantha Ronson has been covered by the media, stars in an a dating profile posted online on Monday at FunnyOrDie.com that parodies similar videos created for matchmaking company eHarmony.

"I would define my personality as creative, a bit of a night owl," Lohan says in the video.

"I'm a workaholic, a shopaholic and according to the state of California, an alcoholic as well as a threat to all security guards if they work at hotels," she says, with a perky smile.

Lohan, who is on probation, was briefly jailed in 2007 for a drunken driving and cocaine possession conviction. She had been arrested the previous May after wrecking her car in Beverly Hills and again in July following a car chase in the Los Angeles beach community of Santa Monica.

She was made to wear an electronic monitoring ankle bracelet, a fact that the actress jokingly mentions in her video, which features the jumpy camera work characteristic of eHarmony dating profiles.

"We'll crash a few parties, a car or two, but at the end of the day I promise you, I never lose my Google hits, just my underwear," the actress says in the video.

Cisco Buys Tidal Software

Buttressing its move into servers in search of a new revenue stream, network equipment maven Cisco is buying privately held Tidal Software for roughly $105 million in cash and retention incentives, hardly a rounding error for the wealthy Cisco.

Cisco says Tidal's intelligent application management and automation solutions will advance its data center aspirations and let it dangle operating savings in front of customers.

Tidal manages SAP, PeopleSoft, Oracle E-Business Suite, .NET and Java applications and schedules database and CRM workloads. Tidal's recent development deal with SAP to integrate Tidal with SAP's Solution Manager lifecycle management is evidently important.

Cisco says Tidal will let it follow transaction flow, which it can already analyze on the network, into the application and ultimately optimize solutions by determining if hiccups are network-, system- or application-related.

Tidal has a boutique-set of specialized or edgy skills that are nowhere near the systems management abilities of a BMC, which is partnering with Cisco on its newfangled Unified Computing System (UCS) or, come to think of it, a CA or IBM Tivoli, all of which can be integrated with Tidal.

In a statement the company said, "Tidal Software's intelligent solutions will bolster Cisco's data center strategy by providing timely, accurate and cost-efficient management and automation of application performance across entire business operations, from the server through the network to the desktop."

Google releases Android 1.5 SDK preview

Though Google's Android platform for mobile devices is widely considered to be the most significant competitor to the iPhone, my review of January 2009 concluded that Android was promising but in need of a hefty coat of polish. On Tuesday, Google announced a preview version of the Software Development Kit for Android's first major update, 1.5.

Based on a branch of the Android Open Source Project code-named "cupcake," version 1.5 aims to smooth many of the rough edges in Android's inaugural release. The update not only polishes existing functionality, but also adds a number of new features, including major additions like support for stereo Bluetooth using the A2DP profile, an on-screen software keyboard, and video recording and playback.

The Android 1.5 update clearly positions the platform as a solid competitor to Apple's iPhone. Though some of the new features—video playback and an on-screen keyboard, for example—are capabilities the iPhone has sported since launch, others, such as stereo Bluetooth, are due to arrive on Apple's platform in the forthcoming iPhone 3.0 update. But some, such as video recording and the ability for users to add third-party keyboards, are capabilities that Apple has made no mention of adding to its device.

In addition to beefing up what Android can do, it appears that Google has spent some time correcting many of Android 1.0's niggling deficiencies. For example, Android now supports rotating the screen into landscape mode using an accelerometer (the G1 only flipped its screen into landscape when you slid the screen out to reveal the device's physical keyboard). Google also says it has added a layer of polish to many of the included applications and has fixed some performance issues, such as the atrociously slow camera load-time and slow scrolling in the Web browser. There are also under-the-hood improvements, like the latest versions of WebKit and JavaScript engine Squirrelfish, and an updated Linux kernel at the heart of the OS.

Google warns that the SDK is not yet finalized and that APIs could still be subject to change, so developers shouldnot release applications for distribution on 1.5 as of yet; the company says that the final release of the Android 1.5 SDK is due out at the end of the month, but it as unknown when the software update will reach consumers.

The increased functionality and polish offered by Android 1.5 could turn it into a serious competitor for the iPhone, especially if it ends up being released prior to the iPhone OS 3.0 update, which is expected sometime this summer. The release of another major iPhone competitor, the Palm Pre, is also due sometime in the next few months, suggesting that this summer could be a very contentious time for the smart phone market, indeed.