Money Matters - Simplified

EBay selling Skype

San Jose, Calif. -- U.S. Internet auction house eBay Inc. says it has agreed to sell about two-thirds of the online phone service Skype Internet for $1.9 billion.

EBay said it would retain 35 percent of Skype, selling the rest to the investment group Silver Lake in a deal that values Skype at $2.75 billion.

EBay purchased Skype for $3.1 billion in a bidding war with Google and Yahoo! in 2005, The New York Times reported Tuesday.

In a statement, eBay said Silver Lake, which includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board, expects the deal to close by the end of the year.

In April, eBay announced intentions to launch the division with an initial public offering.

But eBay President and Chief Executive Officer John Donahoe said the divestiture "achieves our goal of short- and long-term value to eBay and its stockholders without the possible delays and market risk of an IPO."

Silver Lake Managing Director Egon Durban called Skype "an innovative, next-generation company that has changed how people and businesses communicate with each other."

Copyright 2009 by United Press International.

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