Posted on September 17, 2009 at 8:38 AM
Filed under: Acquisitions | Corporate Strategy | Intellectual property
Tagged: eBay , global index , Janus Friis , Mike Volpi , Niklas Zennstrom , Silver Lake , Skype

[ Share ]  [ E-mail ]  [ Leave a Comment ]

Tech M&A may be resurgent, but that doesn't make doing deals any easier. Take eBay Inc.'s (NASDAQ:EBAY) sale of 65% of Skype for instance. Skype co-founders Niklas Zennstrom and Janus Friis have sued eBay and the investor group paying about $2 billion for the VoiP company over an IP dispute that began in March.

Zennstrom and Friis are running Joltid Ltd., which used to license its "global index" software to Skype but terminated that license in March. The Joltid claim states that the company is taking on damages at a rate of $75 million per day. The Wall Street Journal notes the suit claims that since at least 2007, Skype used the global index software "in manners unauthorized by Joltid," such as making the software available to third parties, as well as copying and altering it.

The peer-to-peer technology is seriously vital to Skype, and eBay has said it is developing alternative software. However, if eBay loses the dispute or can't develop alternative software, Skype -- and the stake sale -- could be crippled.

Investors named in the suit include lead investor Silver Lake and Index Ventures (Index general partner and former Joost CEO Mike Volpi is also named), Andreessen Horowitz and the Canada Pension Plan Investment Board. EBay is expected to receive $1.9 billion in cash upon the completion of the sale and a note from the buyer in the principal amount of $125 million.

The e-commerce giant had a tough time making use of Skype, and it looks like it will have a tough time unloading it. - Baz Hiralal

Go to the WSJ story
eBay's Skype sale



Join Corporate Dealmaker's LinkedIn forum

Also From Corporate Dealmaker

• Deal Economy 2010: Morgan Stanley's Smith Barney integration
• JDA waits out storm for i2 buy
• Deal Economy 2010: Cisco's Hooper on M&A strategy
• GlobalLogic adds seasoned dealmaker
• Dell drives in IT services as PC slump deepens

Corporate Dealmaker Home Page

From TheDeal.com

• Tesla ready to drive to public market?
• Deal Economy 2010: IBM's Mendoza on using i-bankers
• Deal Economy 2010: Morgan Stanley's Smith Barney integration
• Peet's raises ante for Diedrich
• Deal Economy 2010: Cisco's Hooper on M&A strategy

TheDeal.com Home

Post a comment

Name:

Email Address:

URL:

Remember personal info?

Comments: (you may use HTML tags for style)

Please only click "Post" once. It may take a few moments to process.