FORTUNE -- Yesterday I took issue with eBay's claim that its 2009 Skype sale was a "competitive process with multiple bidders including several financial and strategic buyers." Namely, because I can't find any evidence that strategic buyers actually submitted bids -- in large part due to litigation risks related to Skype's underlying intellectual property. Instead, the only two formal offers came from a pair of private equity consortia: One led by Silver Lake (which won) and one led by Skype co-founders Niklas Zennstrom and Janus Friis (who lost).
A process was launched to divest Skype. Challenges were widely reported in media, including IP litigation and other issues faced by Skype. eBay explored an IPO and a sale of Skype, contacting multiple financial and strategic buyers. In September 2009, after an exhaustive process, eBay sold a majority stake in Skype to an investor group led by private equity firm Silver Lake. Other investors included the Canadian Pension Plan Investment Board. The deal valued Skype at $2.75 billion, more than the company had paid for Skype in 2005.
Notice the change there? No longer are "strategic buyers" classified as "bidders." Instead, the "strategic buyers" now were just contacted about making a bid. Subtle, but important, difference.
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I've spilt a lot of digital ink on the saga of Yee Lee, a former Skype employee who lost his vested options upon leaving the company voluntarily. My initial post argued that the Skype arrangement was intentionally confusing, while a follow-up suggested that private equity and Silicon Valley work together but speak separate languages.
Throughout, I've been engaged in an email conversation with an attorney not engaged by either Skype or MOREDan Primack - Jun 28, 2011 1:08 PM ET
A controversy about Skype's stock options policy reflects a deep gulf between the types of private investment firms operating in Silicon Valley.
On Friday, I blogged about Yee Lee, a former Skype employee who is claiming he was swindled out of vested options by both Skype and its private equity sponsors (namely, Silver Lake Partners). To be clear, this is not a legal claim. Upon initial employment, Lee signed an agreement that gave MOREDan Primack - Jun 27, 2011 10:03 AM ET
Last week, Skype took heat for firing three executives just weeks before the company's $8.5 billion acquisition by Microsoft (MSFT) is expected to close. That was bad, albeit more optical than unethical. What we learned today, however, might have crossed that line.
Yee Lee, a former Skype employee, charged the company and its private equity investors with effectively cheating him out of vested options. Not in court papers, but via his blog.
Lee MOREDan Primack - Jun 24, 2011 3:49 PM ET
Skype is being hailed as one of the decade's best private equity deals, following Microsoft's agreement to buy the company for $8.5 billion. But that doesn't mean that the PE firms didn't take an unnecessary risk.
It may sound counterintuitive, but private equity is all about debt. Private equity firms typically borrow more than 30% of a deal's value from banks, and then use that leverage to juice returns. And when MOREDan Primack - May 16, 2011 3:42 PM ET
A Skype board member looks back at the last two years, and why the company today is worth $8.5 billion to Microsoft.
By Ben Horowitz, contributor
All these b$%^&#s and n@#$%s still hatin' I used to be ballin', but now I'm Bill Gate-in —Lil Wayne, Bill Gates Shortly after we started Andreessen Horowitz in mid-2009, we, along with our partners at Silver Lake Partners and Canada Pension Plan Investment Board, bought majority ownership of Skype MOREMay 10, 2011 10:36 AM ET
So much for that Skype IPO.
Fortune has confirmed that Microsoft (MSFT) has agreed to buy the voice-over-Internet company for $8.5 billion, including the assumption of debt. Expect a formal announcement within the next hour.
There had been reports last week that Skype was in acquisition or partnership talks with both Microsoft and Facebook.
Skype will become a new business unit within Microsoft, to be run by current Skype CEO Tony Bates. He MOREDan Primack - May 10, 2011 7:34 AM ET
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