I Become A Noble in England

If Barron could reject Apple's acquisition of FingerWorks without hesitation, then he would need some courage to reject another acquisition.

This is what eBay offered for Skype!

At the very beginning, DS Capital invested $10 million and helped its founders to resolve the lawsuit against them in the California court, and obtained 60% of its shares - in fact, $10 million is not high, but in order to resolve the lawsuit against the founder of Skype in the California court, it is more difficult.

To this end, Barron not only used his connections and asked Mr. "Terminator", the governor of California, to act as a middleman, but also paid $15 million to the copyright holders who filed the lawsuit to reach a settlement.

That is why Skype's founding team is very grateful to Barron.

Later, through continuous capital increase, DS Capital's shareholding in Skype had reached 75%; another 10% of the shares were held by O2 Telecom - O2 Telecom later also invested in Skype and entered into strategic cooperation with it to counter Yahoo Messenger, which was cooperated with other telecom companies including BT.

In the end, Skype's founding team still holds a 15% stake in the company and is responsible for its innovation and operations.

Just recently, the American e-commerce giant eBay set its sights on Skype and offered an irresistible price in the hope of acquiring the Internet phone company.

The price is $2.5 billion in cash plus eBay stock and corresponding options. If Skype's team can achieve the performance growth required by eBay in the next few years, then with these options, the total transaction price will reach $4.1 billion!

It has to be said that this price is really attractive.

As for why eBay wants to acquire Skype?

One is e-commerce and the other is Internet telephony, which don't seem to have much in common.

The main reason is that Skype's current development is indeed very smooth. As of now, Skype has 55 million free phone users and approximately 3 million registered pay phone users in 225 countries and regions around the world.

And its free users are also increasing at a rate of 150,000 per day...

When users are using Skype, calls between Skype users are free; but if Skype users need to call other landline or mobile phone users, a certain fee will be charged. Among them, calls to O2 Telecom users have the lowest fee - this is of course because O2 Telecom is its shareholder and the two parties have a strategic partnership.

In terms of revenue, Skype's revenue in 2004 was only $7 million, but in 2005, its revenue has reached $35 million so far. It is expected that Skype's revenue in 2005 will exceed $60 million!

By next year, Skype's revenue will exceed $200 million!

Therefore, for eBay, Skype's nearly 60 million users are really attractive.

In addition, eBay believes that integrating Skype into eBay will improve the communication efficiency of its users, thereby providing impetus for eBay's business growth.

At this time, eBay had already acquired the payment system Paypal, and there was a large overlap between Skype's paid members and Paypal's users. Combining eBay, Paypal and Skype would produce more chemical reactions, thereby increasing eBay's overall revenue.

In fact, Baron knew that in his previous life, eBay did not do a good job of integrating Skype after acquiring it. This acquisition was even rated as one of the top ten most far-fetched acquisitions in the technology industry many times.

However, eBay did not lose money on this acquisition, because in 2011, Microsoft became the buyer and acquired Skype for $8.5 billion...

eBay made more than $2 billion from the purchase and sale (eBay did not sell Skype directly to Microsoft, but had previously sold 65% of Skype's shares to a consortium led by Silver Lake Capital for $2.75 billion in 2009).

If this is the case, why did Barron let eBay be the "middleman"...

And for now, Skype is not useless to his industry.

Therefore, although they weighed the pros and cons, they ultimately rejected eBay's acquisition proposal.

Of course, eBay's purchase this time is still useful...

Some media outlets "accidentally" obtained this news and began to report it extensively.

eBay is still very powerful now and is a well-known e-commerce giant. They are willing to pay a high price of US$4.1 billion to purchase Skype, a seemingly "ordinary" Internet telephone company.

This topic, as expected, exploded on the Internet, which greatly increased Skype's popularity and became a hot topic in the media during this period. It also brought Skype a huge amount of traffic, causing its user growth curve to take off directly...

It seems that it is not impossible for Skype to continue to develop, not following the original path of time and space, and to go public directly through an IPO at the right time.

Speaking of which, according to the information Barron obtained, Skype's founding team was also tempted by eBay's high-priced acquisition.

After all, they still own 15% of Skype's shares. According to eBay's bid of $4.1 billion plus equity incentives, they can get more than $600 million!

It can be said that with this, those who were originally hiding from court lawsuits can immediately achieve financial freedom.

But the key point is that DS Capital has the most say in whether Skype should be sold now.

However, their founding team is still needed to run Skype, so in order to appease them, Barron also asked DS Holdings CEO Amber Sheehan to paint a rosy picture for them.

"Young people should not be blinded by short-term interests. Just hold on a little longer, run Skype well, and wait for the right time to go public through an IPO. By then, Skype's market value will be, if not hundreds of billions of dollars, six or seven billion dollars. Aren't you better off than selling yourself to a local tycoon? Blah blah blah..."

Anyway, the final effect was good. The members of Skype's founding team were like chicken blood, and began to study how to optimize the software and win more paying users...

Of course, this cannot be said to be a simple pie in the sky, but it is really possible to achieve.

Does that mean that eBay has a lot of stupid people and a lot of money? Then wouldn't Microsoft also have a lot of stupid people and a lot of money?

The fact that they are willing to pay this price only shows that Skype has such value.

Prices are shouted out, well, more than just shouted out, they are bought out.

If someone is willing to pay this price, then everyone will really think it is worth this price. So as long as Skype continues to develop steadily and when it goes public, as long as the data is greatly improved compared to now, then its market value at that time will inevitably be much higher than eBay's bid at that time.

That's the capital game.