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In Kara Swisher's otherwise excellent analysis on AllThingsD of the Skype writeoff's effect on Facebook, there's a string of nonsense that desperately bears correction. Swisher ramblingly suggests that eBay bought Skype for some kind of ability to target ads and premium offerings to the VOIP service's users. Nonsense. It's well-documented that eBay CEO Meg Whitman got the idea on a trip to China, where she saw that users of rival auction sites were using VOIP calls and instant messaging to close sales — a useful feature in a country still getting used to conducting business electronically, rather than face to face. Adding Skype to eBay's auctions in China, she hoped, would boost its market share. No such luck.


Instead, eBay ended up throwing in its lot with a local competitor, Tom.com, late last year. And even that hasn't helped. eBay's market share in China has fallen by more than half this year. I'd argue that Skype's failure to strengthen eBay in China, more than anything, is why the company had to take a writeoff.