# eBay Is Doing WHAT With Skype?

By [Continuations](https://continuations.com) · 2009-09-01

skype, ebay, index ventures, andreessen horowitz, silver lake partners

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So I took today off to go to a water park with the kids ([Mountain Creek](http://www.mountaincreekwaterpark.com/), not far from NYC and based on today’s visit highly recommended).  Apparently, [eBay](http://ebay.com)’s management was also out today, because the company [decided to sell](http://finance.yahoo.com/news/eBay-Inc-Signs-Definitive-bw-1217268098.html?x=0&.v=1) [Skype](http://www.skype.com) to a syndicate of investors led by Silver Lake and including [Index Ventures](http://www.indexventures.com/) (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](http://www.doubleclick.com) being sold to [Hellman & Friedman](http://www.hf.com/) [in April 2005 for $1.1 billion](http://www.bizjournals.com/sanfrancisco/stories/2005/04/25/daily3.html) and then sold by Hellman & Friedman to [Google](http://google.com) in [April of 2007 for $3.1 billion](http://www.bloggingbuyouts.com/2007/04/13/google-buys-doubleclick-for-3-1-billion-from-hellman-and-friedman/).  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](http://gigaom.com/2009/04/14/will-joltid-turn-ebay-dream-of-skype-ipo-into-a-nightmare/) turns out not to go away.  As my friend Etienne says, “[you never know when you had a good day](http://continuations.com/post/33711353/msft-yhoo-you-never-know-when-you-had-a-good-day).”

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*Originally published on [Continuations](https://continuations.com/ebay-is-doing-what-with-skype)*