EBay Skype to sell stake in Skype for $1.9 billion in cash

EBay Skype to sell stake in Skype

SAN JOSE, Calif. — EBay Inc. said Tuesday it has reached an agreement to sell most of its stake in Skype in a deal it says values the online telecommunications service at $2.75 billion.

San Jose-based eBay says it will get $1.9 billion in cash and a $125 million note from the buyer.

EBay said earlier this year that it would spin off Skype, which provides voice and video connections via the Internet, after struggling to justify its 2005 acquisition of the company for $2.6 billion.

EBay hoped buyers and sellers on its auction site would use the service but it never become popular on the flagship site. It took a $900 million write-down on Skype in 2007, tacitly acknowledging it had overvalued the company.

An investment group led by the private equity firm Silver Lake including Index Ventures, Andreessen Horowitz and the Canada Pension Plan Investment Board will take a 65 percent stake in the company.

Ebay will retain a 35 percent stake. It expects the deal to close in the fourth quarter of this year.