14 DAY TRIAL // The Skype acquisition wasn't one of the smartest moves eBay made. This, despite being one of the few bright spots in its inventory and seeing a 25 percent rise in revenue in Q2 this year. Still, the company plans to spin off Skype as a separate entity in an IPO sometime next year but now there may be another option on the table. TechCrunch reports that several high-profile venture capital firms are banding together to make an offer for the voice chat provider.
Possible investors include the new Andreesen Horowitz fund and Index Ventures as well as some large private equity firms. If a deal were to go through it would be one of the biggest transactions of the year in the tech sector. eBay acquired Skype in 2005 for $4.1 billion, $2.6 billion upfront and a further $1.5 billion to be paid if certain performance markers were met. As it happens, eBay ended up paying roughly one third of the latter sum, $530 million.
Skype made about $170 million in revenue in the second quarter and around $550 million in 2008 with estimates at over $1 billion in revenue by 2011, but eBay is apparently looking to get about $2 billion for it. eBay announced plans to break away the division in an initial public offering scheduled for next year, though there are some complications as the company is currently involved in a lawsuit with Joltid, a company created by Skype founders Niklas Zennstrom and Janus Friis, which provides some of the underlying technology in the instant messaging software.
The lawsuit is thought to last well into 2010 after the proposed date for the IPO, yet eBay says the plans still stand and everything will go on as scheduled. On the other hand, the IPO may be just a ploy to get investors interested, which apparently is working, but actually coming up with the large sum expected will require the involvement of several large investment companies.