A group of well known venture capital and large private equity firms are pooling resources to make a bid to acquire eBay-owned Skype, according to a source close to the deal.
Investors in the proposed purchase may include newly-formed Andreesen Horowitz, Index Ventures (who were early investors in Skype before the ebay acquisition), and one or more multi-billion dollar private equity firms.
eBay, which announced earlier this year that they would be spinning off the company in an initial public offering in 2010, is said to be looking for $2 billion or more for Skype. Companies quite often talk about IPOs (and even actually file) to generate acquisition buzz.
The Andreeseen Horowitz fund can make single commitments of up to $50 million, so it’s clear a large private equity fund (or two) would need to be involved in the deal as well.
It isn’t clear if current Skype CEO Josh Silverman would continue to lead the company after any acquisition. Sources we’ve spoken with have said he is generally well thought of both within Skype/eBay as well as the possible investors.
Skype, under Silverman, grew revenue to $551 million last year, and eBay has said it expects the company to top $1 billion in revenue in 2011.
Presumably, the investor group, if successful in acquiring Skype, would run it privately and eventually prepare it for an initial public offering.
Skype founders Niklas Zennstrom and Janus Friis, were also reportedly in talks with several private equity firms earlier this year to make a bid for the company.
Recent news that Skype is now in litigation with a company controlled by those founders over key Skype technology only complicates the picture further.
eBay acquired Skype in 2005 for $4.1 billion, although about $1 billion of that, an earnout, was never paid.
Update: Confirmation of the deal.
skype is great but it needs support for multi person video conferencing like iChat has. $2billion seems like a good deal if they can IPO this with the intellectual property intact relatively soon. I’m surprised Skype hasn’t laid waste to the land based telecom industry by now, It’s been solid for years now.
So if Skype laid to waste the telecom industry how would they operate? Skype has no network they just piggyback on others.
Skype needs the telecom industry like Remora’s need sharks. Cant kill the host… its suicide
Not to mention that they would have no revenue if all calls were Skype to Skype. In fact, their business model depends on many people not having Skype so they can charge traditional telco pricing to reach them.
I used skype for their B2B model. I still needs a lot of work. We switched to vonage for business which is cool. If they can set up companies with a highly sophisticated phone system via their service, they can really make money. It WILL be the next big thing. Honestly I think siemens or some other pbx phone system company should be heavily investing in skype.
i haven’t had a land line in like 5 years and i cant remember when i called a land line that wasn’t a business. I said “Land line” telecom because while I think your correct in that it needs backbone, that backbone is now cellular and data networks
I have used skype and it is a really cool web app.
Its about time it moved away from ebay and gets a chance to blossom again.
this is a story? (or just another example of how rumour now masquerades as journalism)
What still escapes me how on earth eBay paid 4.1 billion and not acquired every bit of the IP? I am certain there was an army of lawyers working on the acquisition.
No kidding. It’s like VW buying Rolls Royce Motors in 1998 and failing to notice that the company didn’t have the rights to the Rolls Royce brand. Only with real money at stake.
Oversight seems a more likely explanation than the alternative possibility; that eBay knew and just didn’t think it was important.
Exactly! Before anybody talks about doing any type of deal or IPO, Ebay has to get this straighten. Its like the original founders of Skype is holding Ebay hostage. They sold the company for $4B but still control it.
Is it a relevant fact here that Andreesen is an eBay board member? I think it is. Is it a potential conflict of interest? I think yes. This is the difference between journalism and blogs.
Exactly! Before anybody talks about doing any type of deal or IPO, Ebay has to get this straighten. Its like the original founders of Skype is holding Ebay hostage. They sold the company for $4B but still control it.
OH! You’re my new favorite blogger fyi
let’s hope skype can be wrangled away from ebay. ebay hasn’t figured out what to do w/ skype since they bought it. Skype is a great technology but in the wrong hands. Sell it to AOL and then really sink it.
IPO!!! IPO!!! I wonder hwo the market will react with all these IPO’s.
Skype is awesome for a free tool. But they do need to add features if they ever want to play as an enterprise tool. First, they need to open up the platform. They have started some of this already but they need to do more. Second, they need to add multi-party video (as described above). Third, they need better security (as shown in today’s announcement re malware enabling outsiders to records VoIP calls). Fourth, they need to consider the day when they will stop requiring downloads and a separeate browser and UI for Skype (why can’t they work in a std browser). This would enable them to become a service w/i a service. Last, allegedly their widget on eBay users auction pages were not big winners, but should be re-considered. Skype has languished as an eBay company. It will be fun to watch them take off w/o the parental restrictions.
If Skype really is for sale, they’ll need a very large PE partner. That’s prob a short list: TPG, Silverlake, Elevation…
Elevation would be interesting especially if they can make a tie-in with their Palm deal.
Techcrunch I think you should of looked at this story before you posted this story. Due to eBay is thinking about dumbing the program all together if there lawsuit is not won – http://bit.ly/c2nNd
i think Skype Joking with all over the world’s investors lolzzzzzzzzzzzzzz
http://live-point.net