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eBay close to Skype sale

Hanging up on VoIP

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eBay is close to getting shot of Skype - the VoIP phone service it paid $2.6bn for in 2005.

The deal didn't make sense at the time, and eBay has never managed to integrate the technology into its core auction business. Meg Whitman's claim that the combination of the online tat bazaar and PayPal and Skype would "create an unparalleled engine for ecommerce and communications around the world" never really materialised.

Including payouts to the founders, the bill went over $3bn and eBay was forced to write off almost a billion of this valuation.

The VoIP business will be sold to a posse of private equity firms, including Silver Lake Partners and Netscape founder Marc Andreesen's investment business. Index Ventures also gets a mention in the New York Times. The paper reckons the sale could be announced later today.

Any deal will have to wrestle with an ongoing legal dispute between eBay and a company run by Skype's founders called Joltid which provides the Voip firm's encyrption technology. In July eBay told financial regulators it was looking to create technology to replace Joltid's, but that such a process would be expensive and might ultimately fail. ®

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