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EBay plans to offload Skype, as the company has been unable to cash in on the popular VoIP service

EBay yesterday confirmed it has sold most of Skype to a group of investors for $1.9 billion. The investors now own 65 percent of the company best known for its VoIP service, with the following financial breakdown:  $1.9 billion cash, 35% equity investment and $125 million bond -- ends up being just a bit less than the $3.1 billion eBay paid four years ago.

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

EBay will be able to use the money made from the deal for  future acquisitions to strengthen its core auction business.  After successfully beating out Google and Yahoo for the right to purchase Skype, eBay has been unable to integrate its VoIP services into eBay.

There were several rumors the past couple of weeks that an investor group would purchase Skype, but the deal wasn't confirmed until today.  Venture capital firm Andreessen Horowitz, private equity firm Silver Lake Partners, venture capital firm Index Venture and Canada pension Plan Investment Board are several of the investors involved in the purchase.

Analysts are unsure if Skype will be able to grow as an independent company, but the investor groups will likely keep a tight control of the company.

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RE: Wrong Business Plan
By Oregonian2 on 9/2/2009 6:56:46 PM , Rating: 2
I still don't see how buying Skype was ever a good idea for them. There is literally no connection between them besides both being web based.

Once upon a time there was a period when every website in existence (or so it seemed) was putting little icons on their website to "talk to us now". Instant talking to the customer service dept, phone-call like.

Personally I thought it was the dumbest idea possible and exactly the opposite of the whole point of having a webstore (getting rid of or reducing the need for massive customer support folk at the phones to handle orders).

But a huge number thought that was a good idea for some reason, and eBay was one of them. They thought people would want to make "phone calls" to do their business related to eBay and Paypal.

They learned the truth that the answer is "no", people don't want that. But they were stuck with Skype.

That said, my wife (more than me) and I use skype for quite excellent working free national/international calls (audio in my case, w/video in my wife's case). Can't complain that it exists (for free) -- works fine with a great price. But don't use it for eBay or Paypal either.

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