14 DAY TRIAL // EBay acquired Skype in 2005, planning to integrate it with its auctions site to provide communication tools to sellers and buyers. It didn't quite turn out as planned, though the service is making decent amounts of money, and now eBay wants to spin off the company in an IPO, but those plans may be derailed by a lawsuit filed by the founders of communications software. eBay representatives are confident though and say that the IPO will go through no matter what.
The software uses an underlying peer-to-peer technology, which it licensed from Joltid, a company owned by Niklas Zennstrom and Janus Friis, the founders of Skype. eBay and Zennstrom haven't had the most pleasant past, with the company firing the then CEO of Skype and paying him only about a third of the possible earn-out. If this had anything to do with the case or not can only be speculated but it certainly didn't help either. The two companies are now involved in a legal dispute over the right to license the technology and the Internet giant has detailed some of the aspects of the lawsuit in a regulatory SEC filing.
“Skype licenses peer-to-peer communication technology from Joltid Limited pursuant to a license agreement between the parties. The parties had been discussing a dispute over the license. In March 2009, Skype Technologies S.A. filed a claim in the English High Court of Justice (No. HC09C00756) against Joltid Limited,” the filing read.
“Following the filing of the claim, Joltid purported to terminate the license agreement between the parties. In particular, Joltid has alleged that Skype should not possess, use or modify certain software source code and that, by doing so, and by disclosing such code in certain U.S. patent cases pursuant to orders from U.S. courts, Skype has breached the license agreement.”
The filing led to speculation that the company was worried that the IPO, planned for 2010, would be in danger, which eBay was quick to dispute, with spokesman John Pluhowski claiming that there was no change of plans in the spin-off but declining to further comment beyond what is already available in the filing.
However, the company said that it was working on a new software module to replace the Joltid technology if the courts ruled against them but warned that the solution might not be perfect or might not work at all, considering the scale of the problem, and that in any case it would be very expensive. Still, Skype was one of the highlights of the otherwise gloomy second quarter financial results for the company.