eBay settles Skype lawsuits and lose another $137m

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Skype, eBay, Joltid, Joost, Niklas Zennström and Janus Friis have settled their differences and come to an agreement to secure the future of Skype and the underlying technology. Previously it was claimed that Skype was infringing IP rights on technology at the heart of it’s software which it didn’t own but was licensed.

Highlights of the deal are that Skype now takes ownership of the software from Joltid and all litigation ends. The founders of both Skype and Joltid, Zennström and Friis, will take a 14% ownership share as part of the deal. They will also put up a capital investment as part of the deal.

Other investors Silver Lake and other investors including Andreessen Horowitz and the Canada Pension Plan Investment Board (CPPIB) will hold 56% of Skype. Index Ventures and Mike Volpi (formerly CEO of failed video startup Joost, also founded by Friis and Zennström) are out of the deal.

eBay’s share of Skype is taking a hit – previously they intended to walk away from the deal with a 35% stake in Skype, but their share in the company will be reduced to 30%. They will however still get the $1.9 billion in cash with the deal expected to close before the end of the year.

The deal values Skype at $2.75 billion so that 5% lost is a hit of some $137 million in retained value. Hopefully that draws an end to eBay’s write-downs on Skype and everyone can now get on with making money and continuing to make Skype a great service.



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