Skype sale moves forward, patent disputes settled

eBay is inching closer to selling it’s popular internet telephony service Skype after reaching an agreement with Joltid and Joost M.V. over patent infringement litigation.

The settlement did not come cheap. Skype founders Niklas Zennstorm and Janus Friis have given up a lot of equity, bringing their total stake in the company to 14-percent, in order for Joltid to drop litigation and to pass all rights to the questioned underlying VoIP technologies to Skype.

 eBay will sell Skype to private investment group Silver Lake (among other investors such as the massive Canada Pension Plan Investment Board (CPPIB), among other investors.

Previous investor Index Ventures is no longer part of the deal. The fund wished Skype the best and said today, “Although Skype has the potential to be a great investment, the deal terms changed for Index such that it no longer matches our investment criteria,”

eBay will get $1.9 billion in cash and other equity, valuing Skype at about $2.75 billion under the acquisition.

eBay will still retain 30-percent equity in Skype. eBay CEO John Donahoe said today, “eBay continues to retain a significant stake in Skype and will benefit from its continued growth.”

The company hopes to have sold Skype by the end of this year.

The news hasn’t really had any significant impact on the eBay stock price.

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Peggy holds a Bachelor Arts degree with honors in Economics from York University in Toronto, Canada. She is a Certified Management Accountant (CMA). She has also passed Level I of the Chartered Financial Analyst (CFA) Program. She is also a realtor. Write to [email protected]
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