Makes sense now: eBay unloads Skype; Gets $1.9 billion in cash and keeps 35% stake

Makes sense now: eBay unloads Skype; Gets $1.9 billion in cash and keeps 35% stake

Summary: EBay has officially sold Skype in a deal that values the telephony company at $2.75 billion. The online auction company will get $1.9 billion in cash and retains a 35 percent chunk of the company.

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EBay has officially sold Skype in a deal that values the telephony company at $2.75 billion. The online auction company will get $1.9 billion in cash and retains a 35 percent chunk of the company.

There was some questioning about whether it made sense for eBay to unload Skype (Techmeme). Given the valuation of the deal and the fact that eBay keeps a stake of Skype, the deal makes a lot more sense now.

An investor group led by Silver Lake and includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board will give eBay $1.9 billion in cash and a note from the buyer worth $125 million. EBay will own 35 percent of Skype when the deal closes in the fourth quarter.

In a statement, eBay CEO John Donahoe called the transaction a "great deal":

We’ve acted decisively on a deal that delivers a high valuation, gives us significant cash up-front and lets us retain a meaningful minority stake with talented partners. Skype is a strong standalone business, but it does not have synergies with our e-commerce and online payments businesses.

Judging from a Silver Lake comment it appears Skype CEO Josh Silverman will stay on board. Silver Lake said the plan is to grow the company by "harnessing the deep technological and company development expertise that resides within the investor group."

Is this a good deal?

I'd say so. EBay gets value for Skype, participates in any upside and takes away any risk related to the IPO. EBay can take its $1.9 billion and almost break even on an acquisition that was a bad idea from the beginning. And its 35 percent stake means it'll get more dough should Skype successfully go public.

Also: eBay finds its Skype exit and it's probably for the best

Topics: Telcos, Banking, Browser, Collaboration, E-Commerce, Legal, Social Enterprise

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Talkback

20 comments
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  • the real question is...

    why ebay needed skype in the first place a few years ago?
    It looks like only a few fat cats from Wall street lined up their pockets with comissions for nothing.
    Linux Geek
    • Also, does this change future direction?

      Skype has been a good cross platform solution for a long time. With the new ownership, is that going to change? Will development continue across all platforms or be limited to one or two now? Are they going to lose some of their talented developers? Those are the questions that really need answers.
      BillDem
      • Has to change future direction, right?

        How would they change their past direction???
        gjl229@...
  • RE: Makes sense now: eBay unloads Skype; Gets $1.9 billion in cash and keeps 35% stake

    My question is: how will this affect the customers! Each time there's a change of hands or a merge of "powers" there are changes attached to it. Sometimes good, but more often not. Either way, it's the customer who ends up paying the price!
    Janly
    • I'd argue it's good

      for customers. You have new owners that are focused on Skype. eBay wasn't going to focus on it because it's non-core.
      Larry Dignan
  • RE: Makes sense now: eBay unloads Skype; Gets $1.9 billion in cash and keeps 35% stake

    lets hope that is good deal and that we as clients get the best of it
    ohv3167@...
  • I wonder...

    how much Oprah made off this deal, after promoting it relentlessly for the last year.
    Darr247
  • John Doughnuthole

    JD is a jerk. Talk about destroying sellers. He didn't need to sell Skype to do that, he's already done it.
    WindowWasher
  • Regardless of who owns it...

    ...as long as it functions so well, so easily and soooo inexpensively, we'll continue to happily use Skype for voicecom when my wife's business takes her overseas.

    From that perspective, we end-users are like fleas trying to comprehend where their host elephant is going... It doesn't really matter 'cause we can't control it anyway, and if the elephant falls we'll find a new host...

    And consider... with any change of ownership in our data-based world, yet another party has gained access to users' information. Bear in mind that privacy, as once known, no longer exists.
    kmp612
  • Good for whom?

    Ebay? No doubt.

    Skype users? You don't say.
    markbn
  • What did they pay for it?

    Looks like a loser to me.
    No_Ax_to_Grind
  • Given the recent spyware code release...

    I'd have to question the intelligence of the buyer in this deal. If word gets around that Skype has been compromised significantly, it could actually turn out to be a liability rather than an asset. Almost $3 billion is a lot of jack for a product that could very easily lose its customer base because of security concerns.
    jasonp@...
  • it really depends on who the buyer is

    If the buyer is ATT, then you can all but guarantee that skype would be getting purchased in order to be liquidated.
    gengstrand
  • RE: Makes sense now: eBay unloads Skype; Gets $1.9 billion in cash and keeps 35% stake

    Doesn't matter to me. Turned in Skype for MagicJack. Many more features, and a free phone number that rings on your house phone.
    eargasm
    • Oh, I forgot to mention...

      ...It only cost $19.99 a year and overseas long distance call cost the same, % of pennies.
      eargasm
  • Porn Pushers Have Discovered Skype

    I'm getting constant unsolicited users automatically added to my contacts list. And unsolicited porn web cam instant messages. This started back in April. The forums have been screaming about it for months and Skype has no fix. They have not even acknowledged the problem. I'm getting ready to toss my paid subscription. Many others are saying the same.

    If anyone knows of a work around please, do tell.
    Telexer
    • Re: Porn Pushers Have Discovered Skype

      I've been using Skype for 4 years now and love
      the product. Yes, this is an issue but I do not
      get much of the activity at all. I have set my
      privacy settings to only allow those in my
      contact list contact me. Still, some riff-Raff
      gets through on occasion and I simply block them
      and report the user for abuse in the block
      process. I see maybe 1 per month if at that...

      I also am using Avast Antivirus which has IM
      protection, this crap seems to be prevailant
      when I disable the protection.

      I love my Skype!
      Uncle Buck
  • RE: Makes sense now: eBay unloads Skype; Gets $1.9 billion in cash and keep

    I wonder how the average Canadian citizens feel about
    investing 1.9 billion of their pension dollars in a risky
    software venture. Skype needs to sell a lot of minutes to pay
    back the monthly pension cheques of those aged Canadians
    mmay
    • Better than Detroit public workers

      Their $2 billion is just gone . . .
      Roger Ramjet
  • RE: Makes sense now: eBay unloads Skype; Gets $1.9 billion in cash and keeps 35% stake

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