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EBay to Sell Skype Stake for $1.9 billion - ASHARQ AL-AWSAT English Archive
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NEW YORK (Reuters) – EBay Inc plans to sell a 65 percent stake in its online phone unit Skype for $1.9 billion to private investors including Silver Lake and a venture firm run by Netscape co-founder Marc Andreessen.

Shares in eBay rose 40 cents or 1.8 percent to $22.54 on Nasdaq after the news.

The deal values Skype at $2.75 billion, according to the Internet auction house, which had bought the phone company in 2005 for about $3.1 billion.

The group buying Skype also includes London-based Index Ventures and the Canada Pension Plan, in addition to Silver Lake and Andreessen’s firm Andreessen Horowitz.

The deal lets eBay focus on its PayPal electronic payments service as well as its flagship auction service, the company said.

EBay originally planned to spin off Skype next year. John Donahoe, eBay’s chief executive, said in May that a $2 billion valuation would be low for the growing Internet telephone business.

In 2007, eBay wrote down about $1.4 billion of its investment in Skype, conceding it did not fit in with the rest of its online auction business.

“Skype is a strong standalone business, but it does not have synergies with our e-commerce and online payments business,” Donahoe said in a statement.

EBay expects the deal to close in the fourth quarter. The transaction is not subject to a financing condition.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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