Skype Sale Confirmed

The NY Times is now confirming our report last week the sale of Skype to an investor group led by Andreessen Horowitz is imminent. The deal will be announced Tuesday, says Brad Stone and Claire Cain Miller, citing unnamed sources (perhaps people that…read our post last week).

As we reported, Index Ventures is also participating in the acquisition. And the unnamed 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.

eBay (EBAY) announced earlier this year that they would be spinning off the company in an initial public offering in 2010. These announcements are often made to generate acquisition offers from potential suitors.

The Andreeseen Horowitz fund can make single commitments of up to $50 million.

It isn’t clear if current Skype CEO Josh Silverman would continue to lead the company after any acquisition. Sources we’ve spoken with have said he is generally well thought of both within Skype/eBay as well as the possible investors.

More from our post last week:

Skype, under Silverman, grew revenue to $551 million last year, and eBay has said it expects the company to top $1 billion in revenue in 2011.

Presumably, the investor group, if successful in acquiring Skype, would run it privately and eventually prepare it for an initial public offering.

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.

Recent news that Skype is now in litigation with a company controlled by those founders over key Skype technology only complicates the picture further.

eBay acquired Skype in 2005 for $4.1 billion, although about $1 billion of that, an earnout, was never paid.

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Comments

[buyforeclos...:]

..I am confused. I thought ebay bought it for 1 billion and just sold 65% for 1.9 Billion? If that is true then they made a very good deal...if your right they got screwed ..which is it?

Sep 01 10:19 AM

[Philip Cohen:]

I though they had bought it for 2.6 billion (or more?) ...

Anyway, they sold it just in time to prop up the books for the coming dusaster in the September quarter ...

Should make interesting listening, John "Queeg" trying to spin his way out of his circling back over and cutting his own tow line, again ...

I've set my alarm clock to wake me up again on 21 October; don't want to miss the fun of John spoon feeding his nonsense to the dopey analysts ... ...

Sep 02 08:38 AM