eBay Sells Stake in Skype

eBay is selling an approximately 65 percent stake of Skype to an investor group led by Silver Lake and includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board for $1.9 billion. The deal values Skype at $2.75 billion. eBay will retain an approximately 35 percent equity investment in Skype. The transaction is expected to close in the fourth quarter of 2009. EBay acquired Skype for $2.6 billion in 2005, but the business has been dogged by management turmoil and a thorny legal dispute with Skype founders over its key technology. EBay wrote down Skype's value on its books by $1.7 billion. EBay said it had been planning an IPO for 2010, but the legal dispute with the founders likely complicated a public offering.