eBay sells off Skype stake in $1.9 billion deal

Online auction specialist eBay tonight sold a 65% stake in internet telephone company Skype for

The deal, which has valued the whole of Skype at $2.75 billion, sees eBay retain a 35% stake in the company.

It came four years after eBay paid $3.1 billion for Skype in what has subsequently become viewed as one of the worst technology deals of the decade.

eBay bought the company from its entrepreneur founders Niklas Zennström and Janus Friis in 2005, but has since admitted that itoverpaid and been forced to write off $900 million of Skype's value.

The new investors who bought in were led by US private equity group Silver Lake Partners backed by JP Morgan, Barclays and RBC Capital Markets.

The group included West End private equity firm Index Ventures, the Canada Pension Plan Investment Board, and Andreessen Horowtiz, a new venture capital group led by Netscape co-founder Marc Andreessen and his long-term business partner Ben Horowitz.

John Donahoe, eBay president and chief executive, said: "This is a great deal, unlocking both immediate and long-term value for eBay and tremendous potential for Skype. We've acted decisively on a deal that delivers a high valuation, gives us significant cash upfront, and lets us retain a meaningful minority stake.

"Selling Skype now at this great valuation, while retaining an equity stake, makes sense for the company.

"As a separate company we believe that Skype will have the focus required to compete effectively in online voice and video communications and accelerate its growth."

Skype chief executive John Silverman said: "We are extremely fortunate to have such a talented and seasoned group invest in our company.

"This is a group of investors and industry veterans that have a strong track record of taking the technology companies they own to the next level. With their knowhow helping to guide our vision, Skype is poised to enter the next phase of its growth and development."