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from The Great Debate:

Can sleeping giant Skype reinvent itself?

eric_auchard_thumbnail2.jpg -- Eric Auchard is a Reuters columnist. The opinions expressed are his own --

Do once-hot Internet start-ups who miss a date with destiny ever truly get a second chance? History says no, even for once-great names like Netscape, AOL and MySpace.

Skype hopes to be the exception. On Tuesday, a group led by top Internet financiers in Silicon Valley and Europe agreed to pay eBay $1.9 billion in cash for a 65 percent stake in the one-time web calling sensation.

The deal values Skype at a face-saving $2.75 billion, well above the $1.7 billion at which it has been valued on the ecommerce giant's books. Ebay also stands to keep a 35 per cent stake in the company.

But that overlooks the humiliating $1.4 billion eBay has written off on the original deal. Four years ago, eBay promised to pay up to $4.3 billion for Skype, but it later scaled back the total payout. All told, it makes Skype one of the biggest value destroyers of any Internet merger since the last days of the era.