So I took today off to go to a water park with the kids (Mountain Creek, not far from NYC and based on today’s visit highly recommended).  Apparently, eBay’s management was also out today, because the company decided to sell Skype to a syndicate of investors led by Silver Lake and including Index Ventures (the original Skype backers) and Andreessen Horowitz (Marc Andreessen and Ben Horowitz’s fairly newly minted fund).  Come again?

I bought a bunch of eBay shares at $14 earlier this year because I felt that the valuation did not account at all for the value of Skype.  I was assuming that eBay would eventually spin Skype off in an IPO and that existing eBay shareholders would wind up with shares.  Wrong!  Instead, the spoils will now go to a bunch of new private investors with eBay getting mostly cash and a 35% continued equity stake as a consolation price (last time I checked eBay was already sitting on about $3B in cash).

This reminds me of another transaction: Doubleclick being sold to Hellman & Friedman in April 2005 for $1.1 billion and then sold by Hellman & Friedman to Google in April of 2007 for $3.1 billion.  The only way I can think of (at least in my current state of annoyance) that this is going to end badly for the new investors (and turn out to have been a good deal for eBay) is if that pesky patent fight with the Skype founders turns out not to go away.  As my friend Etienne says, “you never know when you had a good day.”