Bizarre as it may seem it appears the founders of Skype, Niklas Zennstrom and Janus Friis, are back in the news as a potential purchaser of Skype which they sold to eBay in 2005 for $3.1 billion.
Having scarpered with the money and left eBay to take a massive hit writing down the value of Skype, they’re now considering repurchasing the company. In the last few years they’ve played with Joost and created Atomico, a venture capital firm, but now it appears they want Skype back.
Skype, although it’s attracted reams of bad press through the over-inflated price eBay paid, is hugely profitable adding an impressive $100 million plus a year to eBays bottom line. It’s still a young company, largely still based on users PCs, but the potential for embedding into other devices is almost unlimited. Since the Skype app for the iPhone was released over 2 million iPhone users have downloaded the software and it’s only been available for 11 days. Mobile phone operator 3 is also rumoured to be about to release it’s 3rd generation of dedicated Skypephone handset.
VOIP (Voice over IP) is itself still in it’s infancy, and telco’s around the world are still coming to terms with how it sits with traditional landline and mobile minutes. The EU are currently considering forcing wireless carriers to allow VoIP services such as Skype to run over their cellular networks.
What price Skype may fetch will be interesting to watch, Skype Journal reckons a low ball figure of at least $2 billion. What’s more interesting is the possibility that Zennstrom and Friis could raise about $1 billion and that eBay themselves may stump up another $2 billion in finance to get shot of Skype. The question has to be asked will they then use their latest acquisition, Bill Me Later, to underwrite the deal. That would make it Bill Me Later’s biggest ever deal (by a few billion and change) and be the weirdest business strategy ever.
sorry but I have trouble getting my head round why ebay would want to sell a $100 million profit company.
#BS I have to agree with you – leave it alone in the corner to carry on growing and turning in results that although smaller in magnitude are significantly BETTER than eBay.com
If Niklas Zennstrom and Janus Friis realy wanted Skype back – they would pay.
If I were eBay I would say YES – you can have 90% for US$3 billion, and 1st option to buy the other 10% when we decide to sell it.
The $$ value in Skype is not what it makes now, but what it could make in the future with more appropiate owbership.
I’d love to be a fly on the wall during negotiations:
eBay: So you want Skype back
NZ & JF: Yes please
eBay: Fine, we’re incapable of doing anything with it anyway
NZ & JF: Great we’ll take it
eBay: Price is $3.1bn
NZ & JF: Little steep isn’t it?
eBay: It wasn’t when you flogged it to us and it’s grown since then
NZ & JF: We’ll pay $1.7bn
eBay: Is that all it’s really worth?
NZ & JF: Well it’s what it’s on your books for, tell you what, we still have lots of money left from the final payout you gave us, make it $2bn
eBay: Sounds like a deal so long as you let us lend you the money to buy it 😀
Fast forward to 2016
eBay: We’ve worked out what to do with Skype, can we buy it back again please?
NZ & JF: Yeah, $10bn
eBay: Bargain! Done!
NZ & JF: Snigger in the background at the thought of another writedown
While ebay looses to Amazon, Skype is wining big time in VOIP. Tons of core competencies exist within the ebay group to keep Skype going at steller growth rate (they know how to create “network externalities”)…I would find it hard to beleive that eBay would sell Skype…For ebay it will be much easier to win with Skype in VOIP than with ebay against Amazon in e-commerce.
The Ebay CEO’s comments at the previous 1/4 end meeting and subsequent Investors meeting hung out the Skype for Sale sign.
Can they attract bids for the business that approach their own valuation of the business?
“Ah well 🙁 According to the WSJ, the deal’s going nowhere” –
Early days – but NZ & JF’s court action over IP licensing means they’re likely to be the only party interested in bidding until the case is heard – and that will take months if not years to complete.
If the court finds in favour of NZ & JF, Skype’s 1.7bn valuation in Ebay’s book will look woefully optimistic.
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