Nope, this isn’t just a super confusing rehash of yesterday’s story about StumbleUpon buying itself back from eBay—turns out the online auction site’s other confusing acquisition has also been seeking to free itself from its parent and reestablish itself as an independent company.
The WSJ reports that eBay welcomed Skype’s effort to raise its independent funding:
Founders Niklas Zennstrom and Janus Friis originally approached Ebay about repurchasing Skype, which acquired the service for $2.6 billion in 2005. Ebay encouraged them to make an offer, and the Scandinavian billionaires rounded up a group of private-equity firms to back them, the person familiar with the bid said. . . .
The proposal involved private-equity firms contributing some $1 billion to the deal, according to people familiar with the situation, though a full deal price could not be learned. The transaction also involved Ebay providing financing for the deal.
However, unlike StumbleUpon’s repurchase, ultimately the deal was not to be. The ten-figure price tag wasn’t quite what eBay was looking for, according to the WSJ, leaving “the two sides . . . far apart and at this stage a deal involving the private-equity firms is unlikely to be completed.”
Back in 2005, eBay bought Skype for $1.3B in cash and $1.3B in stock. The deal could actually pay out even more (for a maximum total of $4B), provided the telephony service met certain goals by 2008.
However, by Q307, eBay took a $1.4B impairment charge on Skype. Rumors have long circulated that eBay would sell the site, which never seemed to align with its strategy in the first place. These rumors culminated most recently last month—probably around the time Skype was shopping for VC funding to buy itself back?
Is eBay asking too much for an acquisition that they’ve continually struggled to integrate with the rest of their products? Or are they just trying to cut their already sizeable losses on the purchase?