EBay is selling most of its stake in Skype for $2.75 billion to a group of private investors, reversing a 2005 acquisition that puzzled analysts.
The San Jose, Calif.-based company, famous for its online auction site, said it will get $1.9 billion in cash and a $125 million note for 65 percent of the business -- retaining a 35 percent stake.
EBay CEO John Donahoe said the value they got was "well above what most people expected."
"There's never been any doubt in my mind in Skype's potential. It just didn't fit in eBay's portfolio going forward," Donahoe said. "This allows us to sort of have our cake and eat it too."
EBay had been struggling to justify its $2.6 billion purchase of the Internet calling service in 2005.
It hoped buyers and sellers would use Skype on its online marketplace but expectations never took hold on the site. In 2007, the company took a $900 million charge to write down Skype's value on its books, admitting it had overvalued the business.
Still, Skype remains popular -- accounting for 8 percent of international calling traffic last year.
The Federal Communications Commission is currently investigating the opposition for signs of anticompetitive behavior.
EBay expects the deal to close in the fourth quarter of this year, halting a plan to spin off Skype through an initial public offering.
Donahoe said the group of investors -- led by private equity firm Silver Lake and includes a new $300 million fund set up by Netscape Web browser pioneer Marc Andreessen -- approached eBay just as it was ready to submit its IPO registration filing to the Securities and Exchange Commission.
