Skype Litigation Settled; Sale by eBay to Investors to Proceed

Authored by Mark Hefflinger on November 6, 2009 - 8:35am.

San Jose, Calif. - Skype parent company eBay (NASD: EBAY) announced on Friday that litigation between an investor group looking to acquire Skype and the creators of the Internet telephone service has been settled, and that its sale of a majority stake in Skype will now proceed. As a result of the settlement, the acquisition deal has been restructured, and Skype creators Niklas Zennstrom and Janus Friis will now join the investor group, led by Silver Lake, and make a "significant capital investment" in exchange for a 14% stake in Skype.

In total, the investor group -- which also includes Andreessen Horowitz and the Canada Pension Plan Investment Board, will hold 56% of Skype, while eBay will retain 30%.

The deal will still see eBay receive about $1.9 billion in cash, and value Skype at $2.75 billion.

The investor group will notably no longer include Index Ventures, whose recently-added partner Mike Volpi was sued by Zennstrom and Friis.

The Skype inventors, who also developed Web TV service Joost -- alleged that Volpi used his knowledge of Skype-related technology as former head of Joost to boost the investor group as previously structured's chances of a winning bid for Skype.

Related Links:
http://www.ebayinc.com/news#20091106005379

http://snipurl.com/t3rxz (DMW previous coverage)

http://news.cnet.com/8301-1023_3-10392242-93.html