eBay sells Skype stake for $1.9bn

Online auction site eBay has sold its 65% stake in internet telephony service Skype to an investment consortium for $1.9 billion.

eBay purchased Skype in 2005. The new deal will see it receive $1.9 billion in cash from an investment consortium and keep a 35% stake in the business.

It announced in April that it would be selling off Skype after admitting that the company was a bad strategic fit.

The investment consortium includes private investment group Silver Lake; UK firm Index Ventures; venture capital firm Andreessen Horowitz; and the Canada Pension Plan Investment Board (CPPIB).

Skype lets users make free video and voice calls, send instant messages and share files with other users.

John Donahoe, eBay Inc. President and CEO, said: “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.

“Skype is a strong standalone business, but it does not have synergies with our e-commerce and online payments businesses. As a separate company, we believe that Skype will have the focus required to compete effectively in online voice and video communications and accelerate its growth momentum.”

Egon Durban, managing director at Silver Lake, said: “This transaction benefits all parties involved and will allow Skype the opportunity to accelerate the growth of its business by harnessing the deep technological and company development expertise that resides within the investor group.”