SKYPE FINDS A HOME

Former eBay CEO Meg Whitman took plenty of heat for the $3.1 billion purchase of Internet calling service Skype in 2005, since the business proved to have little in common with online auctions. Now her successor is clearing the slate. On Sept. 1, eBay said it was selling a 65% share of Skype to a group of private investors for $1.9 billion in cash and $125 million in short-term debt. "EBay was able to have its cake and eat it too," says John Donahoe, who became CEO in early 2008. The deal values Skype at $2.75 billion, higher than many Wall Street analysts had predicted, and lets eBay retain a minority stake. Led by private equity firm Silver Lake Partners, the buyers also include Index Ventures, one of Skype's first backers, and Andreessen Horowitz, the venture capital fund launched by eBay board member Marc Andreessen earlier this year.

See "Ebay's Skype Sale Looks Like a Win-Win" businessweek.com/magazine