Skype: Great Trade for Marc Andreesen

This past week, Microsoft bought the internet phone company Skype for $8.5 billion. Did they overpay? Was it a good buy?

That remains to be seen. Skype continually loses money and Ebay gave up on integrating it. But, I think they may have some success if they combine Skype with Xbox and, especially, Communicator.

Many corporations (including the bank I work for) use Microsoft Communicator internally for chats. If Microsoft embeds Skype into Communicator, they could capture a big share of the voice business.

But, one thing for sure is that a big winner is Marc Andreesen (founder of Netscape) and his investment firm, Andreesen Horowitz.

Ebay bought Skype for $3.1 billion in 2005 and sold it to a group of investment firms (headed by Silver Lake and Andreesen Horowitz) for $2.8 billion in 2009.

Now, 18 months later, they sold it to Microsoft for $8.5 billion.

That's a great trade - a 204% return in a year and a half!