Investor says Microsoft "stole" Skype from eBay

Microsoft's announcement back in May that it was spending $8.5 billion to acquire the Internet phone company Skype was considered by many to be a bit of a game changer for Microsoft.

In the past the company had not spent that much money in terms of buying other companies or technologies. Now, a major venture capital investor and a co-founder of one of the companies that previously owned Skype before Microsoft's deal claims that Microsoft "stole" Skype in terms of paying a lot less than perhaps what the company is worth.

CNBC.com reports that Roger McNamee, the founder of venture capital firm Elevation Partners, said of the Microsoft deal, "They bought the last global, integrated telecom company left for half the value of Sprint." He added, "There should be a war crimes trial about that deal." eBay previously bought Skype but then sold it off to Silver Lake Partners in 2009 for $2 billion.

At the time of Microsoft's Skype purchase announcement back in May, Microsoft said that it planned to integrate Skype with a number of Microsoft's product including the Xbox 360 console, its Kinect motion controller camera, the Windows Phone operating system and more. Since the announcement Skype launched a deal with the social networking service Facebook to offer video chat features. Microsoft has said that it will continue to support Skype for a wide variety of platforms. While the US's Federal Trade Commission has approved of the Microsoft-Skype merger it is still awaiting approval from European nations. Microsoft hopes the purchase of Skype will be final by October.

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35 Comments

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ahhell said,
What a tool! There is no way that Skype was worth $17B. LOL.

Honestly, there is no way it's worth even the $8.5B they payed for it…

I have no idea what was written there.. eBay sold it with 2Billion and Microsoft bought it with 8.5Billion - how is that stealing(paying less?) by Microsoft?

no matter what he thinks it was worth, a business is really only worth what someone is willing to pay for it. I think someone failed economics 101

FMH said,
This may send MS stocks up, a bit more.

Because they're about to face a war crimes trial? </sarcasm>

I dunno about any of you... but I'd stay away from the venture capital firm called Elevation Partners. It's clear their "founder" is a complete moron by comparing an IT merger deal to war crimes stating, "There should be a war crimes trial about that deal." That is completely absurd and clearly this guy has little grip on reality.
If he really wants to talk war crimes, we're gonna have to ask who he voted for from 2001-2009 and what he thinks about those results....

Ebay and Paypal are evil and expensive anyway. I wish you could easily transfer cash around the net for free. For every £5 donate to my site they take £0.37 if I get 30 people doing that, £11.10 is away to paypal.

Gaffney said,
Ebay and Paypal are evil and expensive anyway. I wish you could easily transfer cash around the net for free. For every £5 donate to my site they take £0.37 if I get 30 people doing that, £11.10 is away to paypal.

Paypal has fees to pay too. Their end of the bargain isn't free for them at all.

shinji257 said,

Paypal has fees to pay too. Their end of the bargain isn't free for them at all.

This. What if no-one payed you for your job to cover your expenses? Doubt you'd be happy. Don't be a stinge.

shinji257 said,

Paypal has fees to pay too. Their end of the bargain isn't free for them at all.

Absolutely true, but their fees are still excessive for credit card processing (And down right criminal for bank withdrawals and such when you have a professional account)...

Enron said,
What a coincidence! I stole some food from the grocery store today. It only cost me $46.

HAHAHAHA This one for the win!

Enron said,
What a coincidence! I stole some food from the grocery store today. It only cost me $46.
You should be on trial for war crimes!

NPGMBR said,
Huh, I was under the impression Microsoft purchased Skype!

Right? I guess that whole $8.5 billion dollars means nothing.

Art3x said,
You mad bro...

Seriously though, if Ebay sold it for that then that's their bad. Don't be hating on MS

I read that as him complementing Microsoft, not being mad at them.

geoken said,
I read that as him complementing Microsoft, not being mad at them.
You read the assertion that there should be a "war crimes trial" about the deal as a complement? I'm not sure you were reading the same article as me.

theyarecomingforyou said,
You read the assertion that there should be a "war crimes trial" about the deal as a complement? I'm not sure you were reading the same article as me.
I agree with geoken. I took that sentence as sarcastic and a compliment to Microsoft for buying it for that low (in that guy's opinion)...

FMH said,

Yup! eBay was more like trying to get rid with it.

No kidding. Not too long ago everybody was saying that eBay overpaid for Skype and that they'd never get their money back, and it was all going to turn out to be a billion dollar loss for ebay.

In the end, I'm pretty sure they're quite ecstatic about getting $8.5B for somebody to take Skype off of their hands.

_dandy_ said,

No kidding. Not too long ago everybody was saying that eBay overpaid for Skype and that they'd never get their money back, and it was all going to turn out to be a billion dollar loss for ebay.

In the end, I'm pretty sure they're quite ecstatic about getting $8.5B for somebody to take Skype off of their hands.


eBay bought it for $2.5B and sold it to Silverlake investment group for $2.75B.
So Silverlake is the real earner here.

Venture Capitalists always think things are worth more than they're really worth.

But he inadvertently makes a good point. Sprint would have been a better acquisition than Skype. (Although Microsoft would have had to assume $18 billion in debt, in addition to paying $13 billion + premium for the stock. Clearly the VC has never taken M&A 101.) Sprint is in the worst financial condition of the four national wireless companies, but Microsoft AAA bond rating would quickly alleviate a lot of Sprint's interest expenses.

Think about what Microsoft could do with Sprint. Lower the fees for data plans, drive down the carrier subsidy, and make *every* phone on Sprint a smartphone. A Windows Phone, earning ad revenue for Bing, with fast rollout of Windows Phone updates.

Best part of it is that the T-Mobile deal gives Microsoft antitrust cover.

With AT&T making empty promises, Microsoft could actually come in with a real plan to improve wireless broadband in the US. Google has been doing gigabit broadband and bidding for spectrum. Why's Microsoft lying down and taking the marketplace as it is?

TomJones said,
Sprint would have been a better acquisition than Skype.

Except that Sprint doesn't have the same technology as Skype, which is what Microsoft wanted. That's sort of like saying that someone who wants to buy a boat would be better off buying a car.