Although cell phones are favored by college students as they make their way around campus, Skype offers a better overall value particularly for long distance and international calls made through personal computers. Acquired by eBay in 2005, the service has been a drain on the online auction company’s business, a mismatch in business operations if there ever was one.
Yesterday, eBay announced that it was selling a 65% stake in the internet telephony company to a group of private investors. Valued by eBay at $2.75 billion, the freeware company (with paid options) is now controlled by a group led by Silver Lake Partners who paid $1.9 billion for their share of Skype. The deal is expected to close in the fourth quarter of 2009.
“This is a great deal, unlocking both immediate and long-term value for eBay and tremendous potential for Skype,” said eBay Inc. President and CEO John Donahoe. “We’ve acted decisively on a deal that delivers a high valuation, gives us significant cash up-front and lets us retain a meaningful minority stake with talented partners. Skype is a strong standalone business, but it does not have synergies with our e-commerce and online payments businesses. As a separate company, we believe that Skype will have the focus required to compete effectively in online voice and video communications and accelerate its growth momentum.”
So, what does this deal mean for you? Well, speculation abounds but the most important aspect of Skype – its open source coding – may no longer be proprietary. In other words, the new owners may let Skype work with other open source programs which would allow it to be incorporated with other services in various ways.
Some analysts have said that Skype’s long term success will depend on the company’s willingness to work with other internet telephony systems and devices, but that would also mean that Skype would need to rely more on advertisers as well as add-on services in order to make money.
Oh, by the way, that freight train you hear barreling down the track is Google Voice, a telecommunications service owned by Google who happens to be one of the largest ad giants in the world. Once Google Voice hits the market, all bets are off on how Skype will fare.
Source: eBay, Inc.
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