The settlement will clear the way for a $2 billion sale, but hinder eBay from selling 65 percent of Skype’s stakes to a group of investors as planned.
Skpye founders Niklas Zennstorm and Janus Friis had filed a law suit to stall the move in September against eBay, which now owns Skype. The reason cited was: eBay was violating the licensing agreement regarding the use of some technologies in Skype’s peer-to-peer network.
The background
Skype allows users to make free calls on computers using the Internet and has a base of 520 million registered users worldwide. It also allows for making calls to mobile phones and landlines for a small fee.
Zennstorm and Friis had sold Skype to eBay in 2005 for $2.6 billion; two years after that they left the company. But through Joltid, a company that they own, they retained the copyrights of a few core technologies used by Skype.
When eBay decided to sell 65 percent of Skype’s shares to a group of investors, Zennstorm and Friis moved to court on the basis of copyright violation of the core technologies. The group of investors that formed a buyer’s consortium comprised of Silver Lake Partners, Andreessen Horowitz, and Index Ventures.
In the legal suit they claimed that Skype, under the ownership of eBay, was using Global Offering technology in manners that are not authorized or approved by Joltid. The use of Global Offering technology by third parties and the option of copying or altering it, which was taking place with Skype, were never permitted by Joltid.
Winners and losers
The legal battle has forced eBay to abandon its plan to sell 65 percent stake in Skype. Under the new settlement, Zennstorm and Friis will hold 14 percent stake in Skype and will have two board member positions. EBay will have a 30 percent stake in the company, and the remaining 56 percent goes to the consortium of buyers.
Index Ventures, represented by Michelangelo Volpi, one of the major players in the buyout plan has emerged as the biggest loser. Now it has completely withdrawn from the scene. Volpi had organized the investors and was named in the suit as one of the defendants.
EBay is not complaining if we go by the statement of John J. Donahoe, eBay’s chief executive, “Skype will be well positioned to move forward under new owners with ownership and control over its core technology.
“At the same time, eBay continues to retain a significant stake in Skype and will benefit from its continued growth. We look forward to closing the deal and focusing on growing our core e-commerce and payments businesses.”
The biggest winners are the founders of Skype as their strategic fight spanning over a year wins them back a sizable chunk of the company stakes and saves their company from being misused.
Perhaps this brings an end to the sour technological deal and the ensuing dramas.
Post new comment