EBay today announced the sale of a 65% stake in VoIP phenomenon Skype to private equity at a price of $1.9B. The buyers are led by Silver Lake, Index Ventures, Andreessen Horowitz, and the Canada Pension Plan Investment Board. Ebay will keep a 35% stake in the company, and thus keep a finger in the pie and stay in the game – just in case they were right all along about buying it, just wrong about how to leverage it. The $1.9M pricetag values the overall company at $2.75B, just slightly up from the purchase price – so it may not have been a great deal for Ebay, but it could havebeen a lot worse.
The sense I get is that the world expects Skype to flourish again as a separate entity. Under EBay the company may not have conquered the world, but the yardstick by which its expected success was to be measured was always much too large. Now, having matured from a free, disruptive technology with no clear business plan into a moneymaking machine, it may finally be ready to fulfill some of its early promise.
How might it do that? I have no idea, and nor does anyone else right now. It’s just that VoIP has become increasingly ‘boring’ since Skype went mainstream. Sure it has its bright spots with some interesting newcomers now and then, but watching the cable companies steadily rack up subscribers gets a bit monotonous. Everyone is hoping Skype’s return will bring back some of the mojo to the whole sector. Google Voice and Vonage now have their third musketeer, hopefully he brought his sword.
If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!
Categories: Mergers and Acquisitions · VoIP
Join Our LinkedIn Group
Here’s a quote from the 2005 purchase that shows you just how clueless the analysts are:
‘JPMorgan analyst Imran Khan said the acquisition was “strategically positive.”
“We believe eBay will leverage Skype’s products to improve both customer service and buyer/seller communication. Also, Skype has various products in its pipeline which we believe will add more efficiencies to eBay’s platform (e.g., video, which could be used for product demos),” Khan wrote in a research note on Monday.’
As I see it, the key for all of these musketeers is to devise ways to assure their users are provisioned properly at the access layer. High-quality communications depends on the availability of unfettered, symmetrical bandwidth, for starters. It’s not inconceivable to me, at least, that any of them, if they elect to bypass the PSTN and its attendant 3KHz constraint, might bring high-def voice and video to new heights. Perhaps if they operate in concert to these ends, far more so. It may well turn out that there’s more to be gained in such a paradigm in the orchestration and provisioning (i.e., integration, especially witin enterprises) of ‘broadband’, than in the actual musketeering applications themselves. In any case, as I see it, those provisions will be critical to their success.
Sound cool to me. I have been using Skype, and I really appreciate the free Skype to Skype calls. I have a family abroad and I thank Skype because it helps me get closer with my family. If selling Skype will benefit everybody, then this is one great news.