Ebay auctions off Skype

ONLINE AUCTIONEER Ebay has decided it no longer needs online telephony outfit Skype to complete its plans for world domination, and has flogged off a large chunk of it to the highest bidder.

A 65 per cent controlling interest in Skype has been snapped up by a group of private and public investors steered by the California technology equity firm Silver Lake, leaving Ebay with the rest of the stock.

Silver Lake will hand over $1.9 billion in cash, valuing the entire company at $2.75 billion, a rather tasty $750 million above the majority of pre-sale estimates from analysts and bystanders.

Ebay, which originally brought Skype from its developers Niklas Zennstrom and Janus Friis for $3.1 billion, hoped the company's Voice over Internet Protocol (VoIP) and online chat functionality would add to the Ebay experience by enabling buyers and sellers to better communicate. Way back in September 2005, an overexcited spokesperson insisted that the recent acquisition would create "an unparalleled e-commerce and communications engine".

Unfortunatley, the legal bods at Ebay forgot to read the small print and didn't realise that the deal they had signed didn't include a chunk of underlying technology, without which Skype is pretty much worthless. Ownership of that little golden nugget was retained by a tiny company called Joltid which is owned and run by... Niklas Zennstrom and Janus Friis. Ker-ching.

It's not at all clear how the new consortium intends to overcome the legal and technical hurdles imposed by the missing software code, but Skype CEO Joel Silverman said, "This is a group of investors and industry veterans that have a strong track record of taking the technology companies they own to the next level. With their know-how helping to guide our vision, Skype is poised to enter the next phase of its growth and development."

Skype generated revenues of $551 million in 2008 and is reported to be attracting thousands of new users daily.

Trading in Ebay initially spiked on the back of the announcement but has settled at around three per cent up today. µ

L'Inq
Silver Lake