EBay to sell majority stake of telecom service Skype for $2 bn

EBay is trading control of the online telecommunications service Skype for about $2 billion,reversing a 2005 acquisition that many analysts considered a head scratcher from the beginning. The company,famous for its online marketplace,said on Tuesday it is selling a 65 per cent stake in the business to a group of private investment funds for $1.9 billion in cash and a $125 million note,while retaining a 35 per cent stake.

EBay said the deal values the company at $2.75 billion. EBay said earlier this year that it would spin off Skype,which lets people make free or cheap voice and video calls on computers and cell phones,after struggling to justify its 2005 acquisition of the company for $2.6 billion.

EBay hoped the service would catch on with users of its auction site,but it never became a popular way for buyers and sellers to connect. The company took a $900 million write-down on Skype in 2007,tacitly acknowledging it had overvalued the business. Still,Skype itself remains popular,particularly among people who regularly make international calls.