Tuesday, September 1, 2009

Canada Pension Plan Buys Skype From EBay

EBay is selling a 65-percent stake in Skype for $1.9 billion US. Among the buyers is the Canada Pension Plan, who will acquire a 15% ownership.

Other buyers are private investors including Silver Lake, and a venture firm run by Marc Andreessen (the Netscape co-founder).

Ebay had originally bought Skype for $3.1B but could never really integrate it with its online bidding products. The current deal values Skype at $2.75 billion. EBay originally planned to spin off Skype in 2010. In 2007, eBay wrote down about $1.4 billion of its investment in Skype, conceding "it did not fit in with the rest of its online auction business".

As for the CPP, they state that vo/ip is a growing market and so on. Where have they been? Skype is a great product (I use it daily, and so do tens of millions of users worldwide), but there is a problem that Skype has not been able to make a profit. If they force fees to be paid by all users, users can simply walk away to the many other vo/ip services out there. A possibility is that Skype should show more ads, a likely more palatable alternative by its users.

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