Sun, Apr 12, 2009 - Page 11 News List

Skype founders may seek to buy it back from eBay


The European duo who created Skype and sold it to eBay for billions of dollars may have another trick up their sleeve: buying it back.

Niklas Zennstrom and Janus Friis, the founders of Skype, have approached several private equity firms and are pooling their own substantial resources to make a bid for the Internet calling service, several people with knowledge of their plans said.

The two men sold Skype to eBay in 2005 for US$2.6 billion, and later received bonus payouts that increased the final price to US$3.1 billion. Since then, Zennstrom, a native of Sweden, and Friis, of Denmark, have created the venture capital firm Atomico and backed the online video service Joost, both based in London.

Skype has more than 405 million registered users, up from 53 million when eBay bought it, and the service had US$145 million in revenue in the fourth quarter last year. Calls are free between Skype users, and rates are a few pennies a minute for international calls to non-Skype users; the low cost has helped the company gain 8 percent of the world’s international calling minutes, said TeleGeography, a market research firm.

Skype also has one of the most popular applications for Apple’s iPhone and has said it is developing software for the BlackBerry, which is expected next month.

EBay has admitted, however, that Skype has few synergies with its core e-commerce and payments businesses. In addition, John Donahoe, eBay’s chief executive, has repeatedly signaled his willingness to sell Skype for the right price.

Zennstrom and Friis did not respond to requests for comment, and it was unclear if they were actively engaged in negotiations with eBay. But one person with knowledge of their discussions said they were trying to raise about US$1 billion in equity from private investors, and were discussing one case in which eBay itself would put up the rest of the financing in the form of a seller’s note to complete a deal worth more than US$2 billion.

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