Ebay Sells Off Majority of Skype for $1.9 Billion

By Geoff Duncan September 1, 2009

Ebay Sells Off Majority of Skype for $1.9 Billion

it’s been a long time coming, but online auction giant Ebay has inked a deal (PDF) to sell of 65 percent of its VoIP operation Skype for $1.9 billion in cash. The buyers are a group of technology investment houses led by Silver Lake, with investors including Andreesen Horowitz (a new venture capital firm from Netscape co-founder Marc Andreessen), Index Ventures, and the Canada Pension Plan Investment Board. The deal values Skype at about $2.75 billion; eBay will retain a 35 percent share of the company.

“This is a great deal, unlocking both immediate and long term value for eBay and tremendous potential for Skype,” said eBay President and CEO John Donahoe, in a statement. “We’ve acted decisively on a deal that delivers a high valuation, gives us significant cash up front, and lets us retain a meaningful minority stake with talented partners.”

The deal lets eBay shed operations and management of the Skype business—which had never been a very good fit with the company—and focus its energies on both its online auction business and its PayPal online payment processing system.

eBay bought Skype back in 2005 for a whopping $4.1 billion; at the time, the company planned to continue operating Skype as its own business, but also integrated Skype capabilities into its online auction business, enabling buyers to contact sellers via voice and video and, in theory, put a human face on the otherwise largely anonymous world of eBay. However, the businesses weren’t a good fit; in 2007 eBay admitted it overpaid for Skype, and earlier this year announced plans to spin Skype back off into a separate company. The new deal with Silver Lake represents a bit of a compromise: eBay gets cash immediately for its coffers, and if the new operators are able to turn Skype into a massive revenue-generating machine, eBay will reap some of the financial benefits of that via the 35 percent stake it plans to retain. eBay is also engaged in litigation over the peer-to-peer technology at the heart of Skype; Skype’s original founders are accusing eBay of breaching their license agreement to the technology.

The deal is expected to close in the fourth quarter of 2009.

Former Digital Trends Contributor

Geoff Duncan writes, programs, edits, plays music, and delights in making software misbehave. He's probably the only member…

Smart Home

Are robotic pool cleaners worth it?

The Airper Seagull SE robotic pool cleaner at the bottom of a swimming pool.

The worst part of owning a swimming pool is taking care of it From filter maintenance and skimming debris from the surface to managing chemicals and more, you'll likely find yourself hanging out around the water more often than you're actually in the water. Robotic pool cleaners are designed to alleviate this pinch point of pool ownership by giving you back your time and automating most of your tasks.

But are robotic pool cleaners worth it, or are they a gimmick that still require heaps of manual input? Here's a closer look to help you decide if one would be a good addition to your backyard.
Budget-friendly devices are often a hassle

Smart Home

Best Buy cut this air fryer’s price in half, down to just $25

The Bella Pro Series 3 Quart Air Fryer near food.

If you want your food crispy all over without having to deal with draining a ton of oil, your best bet is to use an air fryer. They're never too expensive and there are always great air fryer deals going on, but you'll rarely find one with a price like this. Right now, the Bella Pro Series 3 Quart Analog Air Fryer is half off, moving its price from $50 to $25. To pick yours up today all you need to do is tap the button below. If you're interested in our take, however, be sure to keep reading.

Why you should buy the Bella Pro Series 3 Quart Air Fryer
The Bella Pro Series 3 Quart Air Fryer holds up to about 2.5 pounds of food, heats up to 400 degrees, and has easily-removable dishwasher-safe parts. If you notice it is "analog" that is because it has a 60 minute shut off timer to give you peace of mind and an easy way to time your cooking. Of course, this means there aren't a ton of digital options, buttons, and settings. However, this can be a plus for some and possibly you. Not every item in the home needs to be "smart" and less can certainly feel like more.

Smart Home

Revolution Cooking’s high-speed smart toaster is $100 off today

Someone using the Revolution Cooking InstaGLO R180 smart toaster in the kitchen.

If you're thinking about getting a new toaster for your kitchen, why not go with a high-speed smart toaster? Best Buy is currently selling the Revolution Cooking InstaGLO R180 smart toaster with a $100 discount, slashing its price to $250 from $350 originally. There's no telling how much time is remaining before this offer expires though, so if you're interested, it's highly recommended that you proceed with the purchase right now in order to secure the savings.

Why you should buy the Revolution Cooking InstaGLO R180 smart toaster
Are smart kitchen gadgets worth it? The answer is a resounding yes, and the Revolution Cooking InstaGLO R180 smart toaster will show you why. With this kitchen device, you'll no longer suffer from burnt or uneven toasts as it's powered by the brand's InstaGLO heating system. The technology will start toasting your bread in just two seconds without any need for preheating. You'll get bread that's crunchy outside and moist inside every single time, which is a huge upgrade over the inconsistencies of traditional toasters.