With parent company eBay announcing Tuesday that it was spinning off its Skype internet telephone company, speculation is beginning to mount that the online auctions giant might also shed its StubHub division.
There is no official indication that the company will sell off StubHub, which eBay bought in early 2007 for $307 million. StubHub is the nation’s leading secondary ticket company, according to TicketNews’s exclusive industry rankings, and it only trails rival Ticketmaster Entertainment as the largest overall ticketing company.
But, with the secondary market under siege by Ticketmaster and Live Nation executives, who are talking down the industry in hopes of bolstering their potential merger, now could be an optimal time for eBay to dispose of the business. Ticketmaster Entertainment CEO Irving Azoff has said that he would consider selling its TicketsNow secondary ticket division, which has come under fire in both the U.S. and Canada for alleged unfair practices during the year since Ticketmaster bought it for $265 million.
StubHub officials referred any questions on the issue to eBay, but an eBay spokesperson did not return messages seeking comment.
According to press reports, eBay plans to spin off Skype in an initial public offering sometime in 2010 when it hopes financial markets will have improved.
In a piece on the All Things D Web site, Jeffrey Lindsay of Bernstein Research was quoted as saying, “It seems that eBay is going right back to basics, and is dispensing with the `we are an auction company’ ethos that got them into so much trouble. We see StubHub as coming out of that era. We think the market in tickets is changing rapidly and there is a chance to sell StubHub at the very top. They might well take it and pursue a much more pure play retail/second hand portfolio and go back to geographic expansion of the marketplaces/PayPal core.”
One ticketing executive who spoke to TicketNews but requested anonymity said he doubts eBay would unload StubHub because it has been a successful fit for the company. “Frankly, eBay might be looking at acquiring more businesses like StubHub in other sectors because of what it has learned from it. I’d be surprised if they sold it.”