Ebay Finally Dumps Skype

In a move that should have all of us (heavy Skype users) quaking in our boots - Ebay is going to sell off its Skype subsidiary. EBay Inc. said Tuesday it will sell a 65% stake in its Skype Internet phone business to private investors in a deal that marks the end of an unhappy tech marriage.

San Jose, Calif.-based eBay said it will get $1.9 billion in cash and a $125 million note from the buyer, an investment group led by the private equity firm Silver Lake including Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board.

The group will take a 65% stake in the company, while Ebay will retain 35%.

In 2005 eBay acquired all of the outstanding shares of privately-held Skype for a total up-front consideration of approximately €2.1 billion, or approximately $2.6 billion, which was comprised of $1.3 billion in cash and the value of 32.4 million shares of eBay stock, which was subject to certain restrictions on resale.

Interestingly Silver Lake is also an investor in Sabre. So there is a travel industry connection here.

Lets hope that the new chaps do the right thing with Skype and keep it true to its roots. However I don't see them being altruistic. Current Skype revenues are pretty meaningless. Today also Boingo dumped Skype as a partner for its Skype Zones service.

I guess I may just have to move to Google (UGH) or Gizmo.

Cheers