Irony Alert: Marc Andreessen Talks About Microsoft Forking Over $8.5B for Skype
I guess it’s finally time to declare that Marc Andreessen’s bruising and life-altering battle with Microsoft is officially over.
That would be $8.5 billion over.
From the software giant anti-trusting his first company, Netscape Communications, into oblivion, to the software giant paying up to buy Skype today, it is tech’s version of karma.
Andreessen was one of the Internet telephony company’s key investors and his venture firm, Andreessen Horowitz, had invested $65 million in it in 2009 at a $2.75 billion valuation.
“Oh, I don’t know about that,” said Andreessen in an interview this morning, about the irony of getting paid so much by the Redmond, Wash., tech company. “Microsoft was LoudCloud’s first and most important partner 10 years ago.”
The longtime Silicon Valley legend was referring to his second act company after Netscape, which sold to Hewlett-Packard in 2007 for $1.6 billion.
But this transaction, with Andreessen playing the VC from his perch at the Silicon Valley venture firm, is a much bigger deal.
It might not have occurred, said Andreessen, given Skype was on track to go public.
But that IPO had been delayed when CEO Tony Bates was brought in from Cisco.
“We brought Tony on board and wanted him to get his hands around it and figure out what he wanted to do,” said Andreessen.
While Andreessen declined to talk about others, sources said there were no serious ones beyond initial flirting, except for Microsoft.
Not Google and not Facebook.
When the massive all-cash deal was tendered, said Andreessen, the offer was too good to pass by for its private equity investor, Silver Lake Partners.
“We were happy to wait for an IPO and were also thrilled by this outcome,” he said of Andreessen Horowitz.
For Microsoft, Andreessen said that Skype is the key property to own voice and video across the Web.
“It was an expression of Microsoft’s seriousness,” he said. “And it was a virtue for Skype to get all these touchpoints Microsoft can provide.”
As for his firm’s theories on Skype and others, he noted the sale proved out the idea to be in key companies in a big way.
“Every year, there are only a few companies created that are critically important in the tech industry,” said Andreessen, noting only 15 out of a 4,000 count. “Our strategy is to have a major investment in all of those.”
He added that, “Skype is a perfect case study in that…it is a software company and the best in the world at what it does.”
And, today, that’s true for Andreessen Horowitz, which will likely distribute the Skype winnings to its investors.
Followed quickly by making more investments with is massive fund.
“There is a huge shift happening now and the smartphone phenomena is really hitting its stride,” said Andresseen, who also said he likes the e-commerce arena too these days.
In a partner meeting yesterday before the deal was announced, he said it is “amusing” that so many trends he talked about when starting out two decades ago are now finally here.
“Back then, it was frustrating, since we were living in the future [with advanced technologies] that others lacked,” he said. “We were living in the future and you could see this coming.”
Well, maybe not this chapter.