14 DAY TRIAL // EBay is on track to sell Skype despite the mounting legal issues, eBay CEO John Donahoe said. Earlier this month the company announced that it had reached an agreement with several private equity investors to buy a 65 percent stake in the VoIP company for $1.9 billion. Skype has been involved in a lawsuit with a company owned by its founders and two more related suits were filed recently.
Despite this, Donahoe told the audience at the annual conference held by Shop.org that "this deal is going to close," according to Reuters. He believes that Skype could become a very successful company with the new ownership structure. The CEO also claims that the deal is progressing and there have been no "show stoppers" so far.
Skype is facing a lawsuit in the UK and recently another one in the US from Joltid, a Swedish company owned by Niklas Zennstrom and Janus Friis, Skype’s cofounders. The two companies had a licensing agreement in which Skype used a peer to peer networking component developed by Joltid. The component is crucial to Skype's operations but the Swedish company claims that there was a breach of contract which should lead to its termination. Recently the company also accused Skype of copyright infringement in a new lawsuit claiming that the latter had shared and altered the p2p component's source code, which wasn't covered in the licensing deal.
Meanwhile, eBay is focusing on its other operations especially as its core auctions business has been slowing in recent years. There is currently a plan to reverse the trend within three years as the site focuses more on retail and less on the auctions system that made its fortunes. Donahoe believes that eBay will recover from its current slump and should reach a yearly revenue of $10 billion to $12 billion by 2011. With the sale of the majority in Skype, which is expected to reach $1 billion in revenue within a few years, the burden will fall on the marketplace, which should see a turnaround, but mostly on eBay's payments unit PayPal, which has been seeing some very healthy revenue and growth figures in recent years.