Ebay to spin off Skype with IPO

In September of 2005, Ebay bought Skype for 4.1 billion dollars; a massive amount of money for a company that had many suitors. Even after Ebay won the bid for the company many were left wondering how Ebay would integrate Skype into its services effectively.

The answer to that question is... they couldn't. Ebay has announced that it will spin off Skype with an IPO (initial public offering) to separate the services that were never meant to be meshed together.

The original founders have tempted to buy back Skype but Ebay rejected the offer because they felt Skype was being undervalued. With Ebay removing Skype from its business model it will allow the company to go back to its core assets and no longer have to worry about trying to merge with a product that seemingly didn't fit.

This case will probably be studied by many future MBA students in the future as a merger of two companies that had nothing in common. It's surprising that it lasted this long but the end results were predicted by many.

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