Enter Andreessen, himself a founder (Netscape, Opsware), an eBay and Facebook board member, and a guru to a new generation of tech entrepreneurs. In fact, the moment Silver Lake floated a buyout offer, Zennström, a Swede, and Friis, a Dane, sued all the parties involved.Įgon Durban, the Silver Lake partner who was leading the transaction, realized he needed help with the founders. The problem: The two had been pushed aside after the eBay acquisition and had no intention of throwing a bone to the next guys who wanted to buy their invention. The key to fixing Skype, which eBay (EBAY) struggled to integrate into its auction site, was to win over the company’s mercurial founders, Niklas Zennström and Janus Friis, who actually owned the rights to the software underlying the service - without that intellectual property, it would be impossible to unleash Skype’s potential. “I’m thrilled with the deal but would be equally thrilled if it fell apart.” “We have occasional fantasies of calling up and torpedoing the deal,” quips Marc Andreessen, founder of Andreessen-Horowitz.

Indeed, Skype had long-standing plans to go public, and its backers felt sure it would have thrived on its own.

For many, the Skype deal is seen - along with exuberance for the LinkedIn IPO and sky-high private valuations of companies such as Facebook - as a sign of a fast-inflating technology bubble: What else could explain such a lofty price tag for a company that lost $7 million in 2010 and $418 million the year before? What could have changed in just two years to make Skype nearly three times as valuable?Ī lot, according to the executives behind the transaction, who spoke with Fortune exclusively about the strategic and tactical moves they made to transform the company from a quirky Internet phone service into a sophisticated and growing voice and video communications app.

Skype ceo