Skype Founders Reportedly Close to Settlement with eBay

    November 2, 2009
    Chris Crum

Update 3: Skype and eBay may be close to resolving their issues. Om Malik reports:

The ongoing legal scuffle between Skype, a division of eBay, and its founders, Janus Friis and Niklas Zennstrom, may soon see a resolution, according to someone familiar with the situation. The parties are in discussions to resolve the various issues. The talks are described to be at a sensitive stage and can break down without any conclusion.

Update 2: 
At the Summit this week, eBay John Donahoe said that despite lawsuits, the $1.9 Billion deal will still close.

Update: The Skype founders filed another lawsuit today, complicating matters even more. Reuters reports:

The founders of Skype on Friday filed a new lawsuit against Index Ventures and one of its partners, Michelangelo Volpi, accusing him of misappropriating trade secrets to help broker the sale of the Internet phone service owned by eBay Inc.

Original Article: eBay is being sued by the founders of Skype for no less than $75 million per day. Skype founders Janus Friis and Niklas Zennstrom now own a company called Joltid. They have asked for an injunction to stop Skype from using a piece of software it owns in a filing in a US district court in San Francisco, according to Bloomberg.

Joltid alleges that eBay has been showing the source code for the software to third-party developers without their permission. Joltid claims that peer-to-peer technology of the software is being used in Skype, although they demanded to retain the rights to it back when eBay purchased Skype in 2005. Now, they want $75 million for every day the source code continues to be shown.


eBay says the Skype founders’ claims are "without merit," but according to Bloomberg, eBay says it may shut down Skype if the dispute is not resolved, although they claim to be developing an "alternative technology."

The companies that are planning to buy Skype have also been named in the lawsuit.

eBay recently signed a deal to sell most of Skype, while retaining a 35% stake. The deal valued Skype at $2.75 billion. According to the deal, an investor group led by Silver Lake, which also includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board would control about a 65% stake. eBay is supposed to receive approximately $1.9 billion in cash upon the completion of the sale.

You have to wonder if the acquisition will go through at all after this mess. This was probably a little more than these investors bargained for.

Related Articles:

The eBay-Skype Deal Hits Roadblock

eBay Finds Buyer For Skype

eBay Sells Skype, Which is Worth $2.75 Billion