eBay gets final payday from Microsoft Skype purchase
In what may be the final chapter for Skype as far as eBay is concerned Microsoft have bought the company for $8.5 billion. Both Google and Facebook were reported to be in the running to buy Skype, as well as the intended initail public share offering scheduled to take place this year but Microsoft stumped up enough cash to seal the deal.
eBay retained a 30% share of the company when they sold Skype to an investor group led by Silver Lake for for $1.9 billion. Skype was at this time valued at around $2.75 billion.
eBay played a typical face saving tactic in retaining a share of Skype whilst unloading most of the company – they recouped their investment but in the unlikely event that Skype (who lost $7 million last year and have never made a profit) turned into a money spinner they’d still reap a sizeable benefit.
Now the Microsoft deal values the 30% share at somewhere in the region of another $2.55 billion revenue for eBay – not an amount to be sniffed at for an acquisition that investors hated and eBay failed to find a use for.
The big question is what will Microsoft do with Skype, which they’ve said will be run as a separate business unit? The most obvious approach is integration into Microsoft’s Office suite of products to allow direct calling from Outlook and into their gaming platform, the xBox, to allow players to talk and video conference online. Skype is also a contender to be embedded into future Windows operating systems.
Without a doubt part of the reason for Microsoft to buy Skype was to prevent it falling into the hands of their competitors such as Google but even so the $8.5 billion price they paid appears to make little sense to anyone other than the Silver Lake investors who have tripled their money and eBay who at last have made an unlikely profit from Skype.