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Showing posts with label ebay srells skype. Show all posts
Showing posts with label ebay srells skype. Show all posts

September 1, 2009

Ebay Ejects Skype for $1.9 billion,to retain minority control

EBay (EBAY), the giant online auctioneer,announced plans to sell its Internet phone service Skype to a group of private investors, including Marc Andreessen, the billionaire co-founder of Netscape.

In a statement, eBay said it will receive $1.9 billion in cash for Skype ,which is expected to earn revenue of $600 million this year -- and retain a 35 percent equity investment in Skype. EBay said the deal values the company at $2.75 billion, and expects to close the deal in the fourth quarter of this year.

EBay's 2005 acquisition of Skype has come to be seen as one of the worst high tech deals in recent history. The giant auctioneer was never able to integrate Skype, an Internet phone service, into its business plan and was ultimately forced to write down the value of Skype by $900 million.Skype reported 405 million users by the end of 2008, a 47 percent increase from 2007.

Techcrunch reports that the private equity firm is apparently Silver Lake Partners, who is likely supplying the bulk of the capital needed to pay the $2 billion price tag.

Skype's CEO Josh Silverman, grew revenue to $551 million last year, a 44 percent increase compared to 2007. and eBay has said it expects the company to top $1 billion in revenue in 2011.

Skype founders Niklas Zennstrom and Janus Friis, were also reportedly in talks with several private equity firms earlier this year to make a bid for the company.

The deal values Skype at $2.75 billion, leaving eBay with a 35% stake in the venture.As part of an eBay revitalization effort, CEO John Donahoe said in April that Skype would be better off as an independent entity.

"Selling Skype now at this great valuation, while retaining an equity stake, makes sense for the company. And it allows us to focus all of our energies on the opportunities in front of PayPal and eBay," Donahoe said in a press release.