Lawsuit May Delay Skype Spin Off

Dispute over technology ownership could lower Skype's market value and disrupt service to millions of users.

by staff writer
- Jun 30, 2009

A legal dispute between eBay and the founders of Skype could delay the initial public offering of the international calling service.

eBay brought the lawsuit against Skype founders Niklas Zennstrom and Janus Friis, who still own part of Skype's software, after the pair threatened to pull their technology. This would make the service unavailable to the 443 million people who currently use it, according to reports.

"If eBay can't reach an agreement over that piece of technology, that could certainly turn the Skype acquisition into a much larger debacle," Jayanth Angl, an Info-Tech Research Group analyst, tells Bloomberg.

Zennstrom and Friis threatened to pull their technology after eBay breached a licensing agreement, they say. The trial schedule could prevent eBay from carrying out its plan to spin off Skype next year, and could lower the amount eBay gets for the company, The Boston Globe reports.

eBay acquired Skype in 2005 with the intention of incorporating it into the auction site to allow buyers and sellers to talk about large purchases. But integrating the company proved difficult and eBay announced its intentions to spin off Skype by mid-2010, saying Skype was a "great stand-alone company."

Skype asked the London judge presiding over the case to accelerate the trial, but that request was denied, which means it will probably not be heard until early 2010.

The dispute could also decrease the service's popularity if Zennstrom and Friis pull their technology, shutting down Skype temporarily, because eBay would have to attract users back to the service.

"The market hates uncertainty, because you can't price around it," lawyer Randolf Katz, who is not involved in the case, tells Bloomberg.

About the Author

Auctiva staff writers constantly monitor trends and best practices of those selling on eBay and elsewhere online. They attend relevant training seminars and trade shows and regularly discuss the market with PowerSellers and other market experts.

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