eBay Selling Skype to Investors: A Bad Move?

Picture 14According to the NY Times, eBay is set to announce the sale of Skype to private investors let by former Netscape co-founder Marc Andreessen. Reportedly eBay wants approximately $2 billion for Skype, having written down the value of the investment. Originally the company was acquired almost four years ago this month for nearly $3 billion in cash and other consideration.

At the time of the acquisition then eBay CEO Meg Whitman said the following:

“Communications is at the heart of ecommerce and community,” said Meg Whitman, President and Chief Executive Officer of eBay. “By combining the two leading ecommerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net.”

There were all sorts of visions of PPCall for local merchants as well. In theory it was a great fit but eBay couldn’t make the marriage work. Now, at a time when Skype seems to be building momentum online and in mobile, eBay is unloading it.

Do you think it’s a good move to get rid of the company now — or a boneheaded one?

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Update: eBay signs agreement to sell Skype for $2.75 billion:

The buyer, who will control an approximately 65 percent stake, is an investor group led by Silver Lake and includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board. eBay is expected to receive approximately $1.9 billion in cash upon the completion of the sale and a note from the buyer in the principal amount of $125 million. The company will retain an approximately 35 percent equity investment in Skype. The transaction, which is not subject to a financing condition, is expected to close in the fourth quarter of 2009.

4 Responses to “eBay Selling Skype to Investors: A Bad Move?”

  1. Russell Perkins Says:

    I said it at the time: the eBay acquisition of Skype was indescribably dumb (http://www.infocommercegroup.com/blog/2005/12/musings-on-market-making.html). The rational eBay used for the acquisition could have been used to acquire a satellite company or even an electric power utility. When a company strays this far from its core competencies, it needs to be called on it. PayPal: brilliant; Skype: bonkers.

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  3. Jessica Magert Says:

    I use Skype and I love it. The rates are reasonable too. This situation might be the end of Skype. If these so-called investors are greedy (and they usually are), the calling rates for Skype will no doubt rise and people will abandon Skype for something else. Sadly, this might be the beginning of the end for Skype. (my previous post didn’t “hit” for some reason).

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