Risky Andreessen investment pays off

By Laurie Bennett

May 10, 2011 at 9:02am

Netscape founder Marc L. Andreessen has hit paydirt. Again.

Andreessen’s venture capital firm, Andreessen Horowitz, was a big investor in Skype, which has been acquired by Microsoft.

The $8.5 billion cash deal, the biggest acquisition ever by Microsoft, was announced Tuesday morning.

“Skype is a phenomenal service that is loved by millions of people around the world,” CEO Steven Ballmer said in a statement. “Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

Om Malik reports on GigaOM that Andreessen Horowitz will make a $205 million profit on its initial investment of $50 million.

As Kara Swisher writes in All Things Digital, the acquisition will mean short-term losses for Microsoft. Skype’s debts total $686 million.

But the idea is so much bigger than the ledger.

Andreessen has many detractors among rival investors because of his willingness to pay top dollar for stakes in promising tech companies. But as he told the Wall Street Journal: “Hate away.”

Andreessen and Ben Horowitz, Loudcloud co-founders, launched their Sand Hill Road venture fund in 2009.

Their many connections in Silicon Valley have helped land investments in such web darlings as Twitter, Foursquare, Groupon, Zynga and Facebook.

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