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23/11/2009 - eBay completes sale of Skype

At long last, eBay has completed its sale of Skype. The deal, valued at $2.75 billion, sells a share to an investor group led by Silver Lake Investment group including Joltid Ltd. (the founders of Skype) and affiliates like Canada Pension Plan and Andreesen Horowitz. The deal gives the new investors 70 percent of the company while eBay will retain the remaining 30 percent.

The major win of the deal for Skype as a company is it now has full ownership of the Joltid peer-to-peer software that makes its core service possible. The deal settled a bunch of litigation that had the company tied up and it healed a rift between the service and its previous owners.

Skype founders Janus Friis and Niklas Zennstrom originally sued eBay and the consortium of investors that were purchasing a 65 percent stake in the VoIP calling company for copyright infringement over the use of the underlying technology in Skype, which was held by the Friis-Zennstrom entity, Joltid. The founders also filed an injunction against Mike Volpi and Index Ventures who were part of the consortium to block them from participating while derailing the purchase. Volpi allegedly had made-off with a computer containing Joltid source code. It seems like these legal maneuvers paid off for the founders after all. In the end, Volpi was removed from the investment group and the Skype founders joined it to finalize the deal.

For more:
- read this release
- read this Skype blog post

Related articles
Let's make a deal: Skype founders are back and now own 14%
Founders use injunction hoping to foil $2.75 billion Skype deal
Where is Skype going with its business play?
Skype secures deal with Lenovo
SIP to save Skype?


09/11/2009 - Skype and eBay Settle with Joltid

Skype and eBay announced they has reached a settlement agreement with Joltid and Joost N.V. that gives Skype ownership over all software previously licensed from Joltid.

It also ends all litigation currently pending against the investor group and eBay at the closing of the acquisition (the investor group led by Silver Lake had previously entered into a definitive agreement to acquire a majority stake in Skype from the company).

As part of the settlement agreement, Joltid and Skype founders Niklas Zennström and Janus Friis will join the investor group, contributing Joltid software and making a significant capital investment in exchange for a 14 percent stake in Skype.


05/11/2009 - Skype founders may have a deal

According to GigaOm, Niklas Zennstrom and Janus Friis, the founders of Skype and now Joltid, are on the verge of an agreement with Silver Lake Partners and eBay that will allow the sale of Skype to go through and settle the grievances the two had with the company. Friis and Zennstrom had sued eBay and the consortium that recently purchased a 65 percent stake in the VoIP calling company for copyright infringement over the use of the underlying technology in Skype, which is currently held by another Friis-Zennstrom entity called Joltid. The founders recently filed an injunction against Mike Volpi and Index Ventures in an attempt to derail the purchase.

As part of the deal Zennstrom and Friis will probably get board representation at Skype while the investors they've had issues with will not be allowed to participate in the purchase of the 65 percent share in Skype. Originally the founders were angry with eBay and Mike Volpi, former CEO of Joost and part of the Index Ventures investment company, for allegedly not paying royalties on the underlying technology that allows Skype to make VoIP calls. As part of the agreement, Volpi won't be able to be part of the investment group buying the company while Skype will get to use the Global Index software that Skype runs on and the two founders own.

For more:
- read this GigaOm article

Related articles
Founders use injunction hoping to foil $2.75 billion Skype deal
Where is Skype going with its business play?
Skype secures deal with Lenovo
SIP to save Skype?


15/10/2009 - Skype may buy peer-to-peer VoIP startup Gizmo5

According to the Washington Post, Skype may soon purchase peer-to-peer VoIP startup Gizmo5 for around $50 million. The purchase is part of a back-up plan to ensure code base for the online VoIP provider in the event that it's lawsuit with Joltid results in the company not having access to the underlying code Skype uses to make VoIP calls. Currently the code base is licensed to Skype by its original founders who now run Joltid and are suing the company and eBay over intellectual property rights among other things (like getting the company back).

Currently Skype is developing an internal project called Gecko which is meant to replace the Joltid code to make SIP based peer-to-peer calls in Skype. The problem is that development is not going fast enough and Skype is looking for a third alternative to the Joltid code base--purchasing an unscaled, but proven peer-to-peer VoIP provider that they can combine with Skype. Gizmo5's six million user strong SIP-based P2P VoIP service seems to fit the bill nicely.

Read more:
- check out the Washington Post article

Related articles

Where is Skype going with its business play?
eBay and Skype win patent fight with Peer Communications
eBay sells 65% stake in Skype for $2B
Skype founders want to buy back company from eBay


15/10/2009 - Founders use injunction hoping to foil $2.75 billion Skype deal

Skype founders Janus Friis and Niklas Zennstrom have added another layer to their previous lawsuit against eBay and Silver Lake Partners over copyright infringement. They are seeking an injunction against Mike Volpi and Index Ventures in an attempt to derail the purchase of the Internet voice company from eBay. At the beginning of September, eBay agreed to sell a majority stake (65 percent) in Skype to a consortium of investors led by Silver Lake for $2.75 billion. Index Ventures was one of the members of that consortium.

According to GigaOm, the complicated story basically boils down to the Skype founders who now run Joost and Joltid allege that former Joost president and now Index Ventures partner Mike Volpi ran off with his Joost-company computer containing source code from Skype that he allegedly hopes to reverse engineer and circumvent the use and licensing fees of Joltid's peer-to-peer software. The Skype guys are upset because those royalty checks are made out to them and they wouldn't mind buying Skype back for themselves.

If the injunction works it will mean the purchase deal cannot go through if Index Ventures and Mike Volpi are part of the purchasing party.

For more:
- read GigaOm's article here
- and their previous article on the purchase

Related articles
Skype sale faces legal challenge
eBay sells 65% stake in Skype for $2B
Skype founders want to buy back company from eBay


08/10/2009 - eBay and Skype win patent fight with Peer Communications

eBay and Skype are off the hook again. A federal appeals court found eBay and Skype did not infringe on two patents held by Peer Communications. After initially winning a patent case against Peer Communications in August 2006 in U.S. District Court for the Eastern District of Texas, the case went to the U.S. Court of Appeals for the Federal Circuit.

The two patents petain to a user interface for network access that enables network agents to access multiple network services.

According to PC World, Peer Communications is a part of Acacia Technologies--a company specializing in licensing and enforcing its portfolio of patents. In 2008, Verizon Wireless settled a suit involving an Acacia patent on electronic address list management technology.

For more:
- read the PC World article

Related articles
Verizon settles lawsuit with Acacia Technologies
Skype sale faces legal challenge from co-founders
Skype adds 37M more users, revs jump to $170M in Q2
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17/09/2009 - Skype sale faces legal challenge from co-founders

Skype's co-founders Janus Friis and Niklas Zennstrom have sued eBay and the consortium that recently purchased a 65 percent stake in the VoIP calling company for copyright infringement over the use of the underlying technology in Skype, which is currently held by another Friis-Zennstrom entity called Joltid. The suit, which seeks significant damages for the operation of Skype by the new investors, was filed in U.S. District Court in Northern California, and it comes as no surprise, according to IP communications veteran analyst Om Malik.

Friis and Zennstrom sued eBay in London on similar grounds after their interest in reacquiring Skype was rebuffed by the online auction powerhouse, which, for some reason, didn't acquire the underlying Skype technology from Joltid in the original $3.1 billion purchase. In his article, Malik harkens back to a blog post he did at the time of the acquisition raising just that point, and if it occurred to Om, it is a little baffling why it didn't occur to eBay leadership, too.

Business Week speculates that the lawsuit could cause the investor group to retract its bid for Skype, which would open the door again for eBay to relent to Friis and Zennstrom. But in August, Phil Wolff of the Skype Journal offered several reasons that the lawsuits might not affect Skype as much as thought. As for eBay, it tweeted that the "allegations and claims are without merit and are founded on fundamental legal and factual errors. We remain on track to close the transaction in the forth quarter of 2009." 

For more:
- see the BusinessWeek article on the legal brouhaha here
- see the GigaOm post on the situation here 

Related articles
eBay sells 65% stake in Skype for $2B
Skype founders want to buy back company from eBay
Joltid case might not affect Skype as much as predicted


28/08/2009 - Report: Mark Andressen, others aim to purchase Skype

Skype, which corporate parent eBay has said it will spin off in an IPO in spring 2010, may be subject to a private offer from Netscape founded Marc Andressen's new venture capital firm and other private equity groups, according to a TechCrunch report. Andressen Horowitz, Andressen's new firm, would have to join with other firms to raise the $2 billion Skype is seeking for the unit.

Skype currently is facing a legal challenge from Joltid, a separate company still owned by Skype co-founders Janus Friis and Niklas Zennstrom, over the underlying software that powers Skype. The court case has been speculated to be potentially devastating to Skype, but others disagree. It's also possible that the Joltid case is a leverage tool to bring the company back to the cofounders, who already have expressed their desire to buy Skype back from eBay. Perhaps they could even join with Andressen's group to bid on the VoIP company.

Either way, despite claims that Skype's reported figure of 450 million registered users might be bogus, the company is still on track to rake in more than $600 million in 2009, according to eBay financial reports. An eventual Skype IPO will be one of the most publicized and potentially lucrative tech offerings in some time. 

For more:
- see the TechCrunch article here 

Related articles
Skype adds 37M more users, revs jump to $170M in Q2
Skype founders want to buy back company from eBay


03/08/2009 - Joltid case might not affect Skype as much as predicted

Phil Wolff at the Skype Journal documents several reasons why Joltid is not only unlikely to win its case against eBay and Skype, but also is unlikely to affect the VoIP giant's viability if it indeed wins the case. Wolff lists five hurdles Joltid, the P2P tech firm that terminated Skype parent eBay's license to its technology and is suing for breech of contract over continued use of its software, would have to clear to win the case, and a couple of Skype's actions that likely would mitigate the effects of any ruling in Joltid's favor.

Wolff says Skype is working on code to replace the Joltid tech currently, and as the case won't be heard for another 10 months, has plenty of time to perfect it, should a judge order it to stop using Joltid's software.

Joltid, also founded by Skype cofounders Niklas Zennstrom and Janus Friis, has been discussed frequently as a roadblock to the IPO eBay tentatively plans for Skype in early 2010. Skype reported strong Q2 2009 results, and if the Joltid case fizzles as Wolff suggests, the IPO could be one of the biggest, and certainly most publicized tech stock offerings since the recession began. 

For more:
- see Wolff's quick list of problems with Joltid's case here 

Related articles
What's Skype really worth?
eBay plans 2010 IPO for Skype


23/07/2009 - Skype Users Rise by 37m, Revenues up 25% in Q2

Skype's subscriber base just keeps on climbing, with another 37 million people added in the second quarter - taking the total year-to-date increase to 75 million.
Growing subscribers also means growing revenues and the VoIP company saw Q2 revenue jump 25 per cent year-over-year to USD $170 million.

22/07/2009 - Skype adds 37M more users, revs jump to $170M in Q2

Skype's second-quarter revenue increased 25 percent year-over-year to $170 million, according to financial statements released by corporate parent eBay. Skype also saw its registered user base grow to 480.5 million for a staggering 75 million user increase during the first half of 2009.

Skype's second-quarter revenue was up $17 million from Q1, a 9 percent increase, and it also added 37.3 million new users in Q2, slightly less than the 37.9 million it added in Q1.

According to the earnings release, Skype in addition to adding users, the company is also "focused on product strategies to enhance customer engagement."

Another positive quarter of growth for Skype could mean an increased IPO price as eBay gears up to take the VoIP company public in early 2010. That is, of course, if eBay and Skype's cofounders settle a lawsuit over the P2P tech that's at the heart of Skype's client.

For more:
- see the press release here 

Related articles
eBay plans 2010 IPO for Skype
What's Skype really worth?


29/05/2009 - Positive Signs For Interoperability Between VOIP Systems

It would appear that efforts to address problems of compatability and interoperability between the various VoIP protocols, packages and services are making some headway.
For users - and especially small businesses - the issue has been of growing concern as the popularity of VoIP has led to a huge increase in the number of VoIP services.

29/05/2009 - Skype Update With Screen Sharing - and Reinstated Extras

Skype has released a beta version of its software for Windows which includes a screen sharing feature.
The Skype 4.1 release also reinstates some extras that were removed in the previous update - much to the disappointment of many subscribers.

22/05/2009 - Yuuguu Extends Instant Collaboration To Include Skype

Yuuguu has expanded its screen sharing cross network application to include Skype.
The Yuuguu for Skype Beta enables Skype users to screen share and collaborate with one or more contacts.

21/05/2009 - Skype Gets its Own Oprah Show

Skype president Josh Silverman's invitation to appear as a guest on 'Oprah' may not come as much of a surprise to fans of the show.
The VoIP giant has already been featured on the program and Oprah Winfrey often uses it for interviews.

20/05/2009 - Skype For iPhone App Offers 3G Calls

A new app is offering iPhone users a way of making Skype calls using 3G by turning outgoing calls into incoming ones.
Appropriately called Incoming, it connects to any landline or mobile phone over Edge, 3G, and WiFi - whereas the official Skype for iPhone app is limited to WiFi.

29/04/2009 - Truphone Improves iPhone Mobile VoIP App

Truphone has launched a major upgrade to its free mobile VoIP application for the iPhone.
The latest version of the Apple handset's first-ever VoIP app boasts increased ease of use, speed of function response, intuitiveness and simplicity - along with improved voice quality.

23/04/2009 - Skype Revenues Continue Growing in Q1

Its future with parent eBay may be uncertain but that hasn't prevented Skype from continuing to generate revenue.
eBay's Q1 financial statements published this week show the VoIP company is still increasing revenue, minutes and users.

23/04/2009 - Skype Q1 revenues up

To no one's surprise, Skype continues its cash generating ways. eBay's Q1 financial statement released Wednesday reveals the company continues to grow revenues, minutes and users.

For the first quarter of 2009, Skype (well, eBay) reported revenues of $153.2 million; this is up from $145 million in Q4 2008 and puts the company on pace for more than $600 million in revenues for the year.

There are a total of 443.2 million registered Skype users, with 37.9 million added during Q1 2009. Contrast that with collecting 35 million users during Q4 2008.  

As for revenue-generating activity, the company had 2.9 billion Skype Out minutes in the quarter, averaging a little more than 6.5 minutes per user. The increase in minutes represents a 65 percent growth in billable activity on a year over year basis.

For more:
- GigaOm digs out Skype's numbers from eBay's Q1 reports. Post.

Related articles
eBay plans 2010 IPO for Skype
Skype's founders get private equity, but eBay not hearing the right price


15/04/2009 - eBay plans 2010 IPO for Skype

Ebay announced on Tuesday afternoon that it plans to spin Skype off from the company, starting with an IPO (initial public offering) it intends to be completed in the first half of 2010, with specific timing of the event "based on market conditions." Ebay CEO and President John Donahoe pronounced Skype as a "great stand-alone business with strong fundamentals and accelerating momentum," but it has "limited synergies" with eBay and PayPal.

Yesterday's announcement is the latest in the ongoing soap opera between Skype and its parent. After eBay purchased Skype for an initial $2.6 billion in 2005, with bonuses taking the price up to $3.4 billion total, the company has had to write $1.4 billion off the books and has struggled to figure out exactly what to do with the company.

However, such a struggle apparently is not clouding the minds of Donahoe and the eBay executive to get the best deal they can for the company (Hey, it's eBay, it's in the culture). Lots of buyout talk has floated around since Donahoe suggested that Skype was on the block, with a range of suspects citied - Cisco, Google, Microsoft.

The most recent - and apparently the most serious - offer appears to have come from Skype co-founders Niklas Zennstrom and Janus Friis. The two had reportedly lined up about a billion dollars in private equity funding and had asked eBay to provide another billion in debt/self-financing to make the deal happen, but eBay apparently wasn't impressed with either the amount and/or the terms.

Wall Street analysts have been quick to dog eBay for purchasing Skype and have made calls for the company to get rid of it, but eBay seems to realize that a company that generated $551 million in 2008 with margins of around 21 percent isn't something you unload at a fire sale. Skype is expected to top a billion dollars in revenue in 2011.

Readers should be cautious that eBay's Skype IPO announcement is most certainly not the best and final offer we'll hear on the matter. Zennstrom and Friis may try to line up a better, more lucrative offer, and other players may be waiting in the wings to snatch up Skype prior to a public offering. Stay tuned.

For more:
- eBay's Skype IPO statement. Release.

Related articles
Skype's founders get private equity, but eBay not hearing the right price
Skype founders want to buy back company from eBay
Will Ebay auction Skype? - FierceVoIP
Skype for sale? (Again) - FierceVoIP


15/04/2009 - Litigation Issues May Hamper Ebay's Skype Spin-off

eBay today announced it plans to spin Skype off as a stand alone publicly traded company in the first half of 2010.
Action at last. But surely the VoIP provider's parent company has to resolve legal issues centred around its core P2P technology - and involving Skype's founders - before the planned Initial Public Offering (IPO) can take place?

14/04/2009 - Skype's founders get private equity, but eBay not hearing the right price

In the latest twist on efforts by Skype's founders to rebuy their former company from eBay, four private equity companies have been named as willing to contribute a billion dollars to the deal.  However, eBay appears to be balking at a low-ball price and is standing pat.

KKR, Warburg Pincus, Providence and Elevation Partners are listed as the private equity supporters in Niklas Zennstrom and Janus Friis' quest to repurchase Skype from eBay. The Bay encouraged them to make an offer, and the firms agreed to bring around $1 billion to the deal. Ebay was asked to provide financing for the balance.

However, Zennstrom and Friis' offer turned out to be "well below" the price for which EBay is willing to sell Skype, reports the WSJ.  With the two sides "far apart," it looks like the latest talk of a Skype sale was indeed the most realistic to date.

For more:
- Wall Street Journal blog.

Related articles
Skype founders want to buy back company from eBay
Will Ebay auction Skype? - FierceVoIP
Skype for sale? (Again) - FierceVoIP


12/04/2009 - Skype founders want to buy back company from eBay

It looks like a serious bid to buy Skype from eBay is coming to the table from co-founders Niklas Zennstrom and Janus Friis. The duo have reportedly talked up several private equity firms to put together a multi-billion dollar offer for Skype.

Reports say eBay wants at least the $1.7 billion current book value of Skype, while Zennstrom and Friis are trying to raise a billion in private cash with eBay possibly putting a seller's note together for another $1 billion. Given Skype had revenues of $145 million in Q4 2008, setting up a financing instrument for the purchase of a company expected to generate more than $500 million in 2009 shouldn't be that tough.

Skype was originally sold to eBay in 2005 for $2.6 billion and bonus payments increased the final price to $3.1 billion, so both Zennstrom and Friits are also likely good for a large chunk of cash on a repurchase effort.

Since buying Skype, eBay has been confused as to what to do with the company, 'fessing up that the communications company hasn't blended well with its core competencies of e-commerce and payments businesses.

Other buyers for Skype may be scared off/locked out of discussions due to low-key intellectual property discussion between eBay and Skype founders. In a recent regulatory filing, Joltid, which - surprise -- was founded by Zennstrom and Friis - has terminated eBay's license to Joltid's peer-to-peer technology at the heart of Skype. The lawsuit is currently in a British court and also begs the question as to why eBay didn't get exclusive rights to Skype's peer-to-peer technology in the first place when it shelled out the original $2.6 billion.

For more:
- NY Times reports on Skype buyback talk. Article.

Related articles
Skype iPhone restrictions stir up lobbying to Europe, FCC
Skype for iPhone: One week, 2 million downloads


30/03/2009 - Skype Announces iPhone App,Video Calling Coming Soon?

Skype is now available for the iPhone - and will be coming to BlackBerry in May.
The VoIP app on the iPhone will only work over Wi-Fi and not 3G. It will allow iPhone subscribers to use phone numbers in their existing iPhone address book - without the need for duplicate lists.
As always, it allows free calls between Skype users and charges for calls to landlines or mobiles.
UPDATE: Since being released on Tuesday it has emerged that Skype on iPhone does works over 3G, despite being intended only for use with WiFi.


25/03/2009 - Gizmo5 CEO Challenges Skype For SIP

The CEO of Gizmo5 Michael Robertson has responded to last week's announcement of Skype for SIP by posting a comparison (see below) of the new service and his own company's OpenSky.
While welcoming Skype's initiative, he described it as a "vaporware announcement" with "murky pricing details".

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