eBay starts undoing bad acquisitions: Sets StumbleUpon free

eBay starts undoing bad acquisitions: Sets StumbleUpon free

Summary: StumbleUpon is a startup again as the original founders and a few well-heeled investors bought it back from eBay. The next question: When will Skype leave the eBay fold?

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StumbleUpon is a startup again as the original founders and a few well-heeled investors bought it back from eBay. The next question: When will Skype leave the eBay fold?

In a statement (blog), StumbleUpon said its two year run as a subsidiary of eBay is over. StumbleUpon founders Garrett Camp and Geoff Smith and investors such as Ram Shriram of Sherpalo Ventures, Accel Partners and August Capital are buying the company back. Camp will be CEO. Terms of the deal weren't disclosed. 

Why the breakup? Camp said:

"We realized there were few long-term synergies between the two businesses. It is best for us to part ways and focus on our respective strengths."

The good news for eBay is that it only blew $75 million on StumbleUpon. That sum is basically a rounding error for eBay. Way back in May 2007 eBay thought StumbleUpon would "provide eBay with in-depth exposure to a fast-growing community-based service with approximately 2.3 million users." 

However, when you check out eBay's list of acquisitions StumbleUpon never made much sense. Most of eBay's purchases were e-commerce related, but StumbleUpon was a browser plug-in. Meetup is another head scratcher, but the biggest detour had to be Skype. That e-commerce meets VOIP concept never made a lot of sense. 

Next up for eBay is figuring out what to do with Skype. The New York Times reported that Skype founders Niklas Zennstrom and Janus Friis were in talks with private equity groups to raise about $1 billion to buy Skype back from eBay. eBay bought Skype in 2006 for $2.6 billion and tossed in another $500,000 later. 

Om Malik outlines why it makes sense for eBay to sell Skype back to its founders and a big reason is a pending lawsuit. Look for eBay to sell Skype back to its founders too. I wonder if this could be a new model for entrepreneurs. Start company, sell out to eBay and then buy it back for less than you sold it for. Not a bad gig at all.

Topics: CXO, Banking, Collaboration, E-Commerce, Social Enterprise

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