As you may remember, two months ago eBay was planning to spin Skype into an independent company. The buyers who would take control of Skype from eBay included Marc Andreessen, Ben Horowitz, the Canada Pension Plan Investment Board, Index Ventures, and Silver Lake. However the founders of Skype interrupted the sale by claiming intellectual property infringement on the VoIP technology. The original founders of Skype started a company called Joltid. And Joltid said that they were suing eBay.

The lawsuit has now been settled. eBay will be selling a majority ownership of Skype to the aforementioned investors for $2 billion. Joltid will be licensing the technology to the new Skype buyers. Skype founders Niklas Zennstrom and Janus Friis will get 14% ownership in Skype as a result. Both Friis and Zennstrom will also make a “significant’ investment in Skype too. eBay will retain 30% in Skype and the rest of the investor group will get 56%.

Friis and Zennstrom also filed a lawsuit back in September against former Joost CEO Mike Volpi. Friis and Zennstrom founded Joost several years ago and sued Volpi because of breach of fiduciary duty. Volpi is currently a partner with Index Ventures which is one of the companies buying Skype. As a result, Index Ventures is no longer one of the buyers in Skype. The acquisition is expected to close by the end of this year.

Back in February Meg Whitman formed an exploratory committee to become a candidate as the Governor of California. Whitman has personal wealth of $1.1 billion, made mostly through her tenure as the eBay CEO. She worked as the eBay CEO from March 1998 to November 2007. During the last presidential election, she personally endorsed John McCain. She served as the national co-chair for the McCain campaign.

Two of the biggest mistakes Whitman made while working at eBay was the acquisition of Skype and failing to compete in China. eBay is trying to sell off Skype, but is being sued by the founders of the company at the same time of patent issues. Below is an excerpt of her speech on her campaign website:

eBay was the culmination of my business career. It’s the place where I tested my years of experience and honed my leadership skills. But it was also much more.
At eBay, I helped millions of people create small businesses in the marketplace. I became intimately familiar with the challenges small businesses face in this country.

I came to understand that job creation is dependent on a fragile mix of circumstances – circumstances all too often disrupted by the intrusive hand of government.
And I came to love the inspired individual – a person set free to pursue his or her dreams by an open marketplace and a free society.

Government does not create wealth in this country – inspired individuals create wealth. Helping those people succeed on eBay was the privilege of a lifetime. My interest in public service blossomed from my years at eBay. It’s an interest that was fueled by my parents, both of whom served their country in the Pacific during World War II. And it’s an interest that was inspired by my long friendships with Mitt Romney and John McCain.

On Friday night, a woman in Alabama won an auction that would allow her to have dinner with Sarah Palin. The woman in Alabama won the auction for $63,500. Cathy Maples of Huntsville will be able to take up to 4 guests with her too. It won’t be just the former governor of Alaska and the VP candidate, but it will also be her husband Todd. The proceeds from the charity auction will go to Ride 2 Recovery, an organization that supports veterans through cycling programs.

“She is, quite simply, one of the most talked-about people in the U.S.,” stated the auction. “Value: Priceless.”

Maples owns a defense contracting company and fully supports the military. Maples said that she would love to see Palin as the future President. The opening bid for the auction was $25,000 and about 61 bids were made. Palin has the right to bow out if the winner fails to meet standards of suitability and professionalism based on their background. The dinner will last about 4 hours or less.

At the beginning of the month, eBay announced that they would be selling Skype to several buyers. The buyers included Silver Lake, Index Ventures, Andreessen Horowitz, and the Canada Pension Plan Investment Board. That sale has been interrupted not by Kanye West, but by the founders of Joost and Skype.

The founders of Joost and Skype started another company called Joltid. Joltid is suing eBay on the basis that Skype is infringing on their technology at least $100,000 times per day. eBay denies the allegations. But Joltid co-founders Janus Friis and Niklas Zennstrom says that their company holds the intellectual property rights to VoIP applications including Skype. Joltid filed the lawsuit against eBay two weeks after the announcement was made that Skype would be sold to the aforementioned buyers.

Today another lawsuit was filed by the Joltid, Skype, and Joost co-founders. Zennstrom and Friis filed a lawsuit against former Joost CEO and Chairman Mike Volpi along with venture capital firm Index Ventures. The lawsuit states that there has been a breach of “fiduciary duty against Volpi, aiding and abetting breach of fiduciary duty against Index, interference with prospective business advantage, misappropriation of trade secrets, breach of contract against Index, breach of confidence, and civil conspiracy.” Volpi had recently quit Joost to join Index Ventures back in July.

Between Index being sued and wanting to buy Skype from eBay, that company is up the creek made out of you know what with no oar. I also think it is safe to say that Friis and and Zennström don’t want to see Index own the company that they built and sold to eBay. Who knows? Maybe the purchase of Skype might be too much of a headache and might the transaction may be aborted. But all the buyers involved have already come to far and won’t go down without a fight.

About four years after eBay acquired Skype for about $4.1 billion, $2.6 billion of which was upfront cash, the company has decided to sell a big chunk of it it off to several investors.  Skype was valuated at $2.75 billion when eBay decided to sell 65% worth of the company to investors such as Silver Lake, Index Ventures, Andreessen Horowitz, and the Canada Pension Plan Investment Board.

eBay will receive about $1.9 billion cash when the deal is complete along with a $125 million note in principal from the buyers.  eBay itself will retain 35% in Skype.  The transaction is expected to be complete by the fourt quarter of this year.

“This is a great deal, unlocking both immediate and long-term value for eBay and tremendous potential for Skype,” stated eBay President and CEO John Donahoe in a press release. “We’ve acted decisively on a deal that delivers a high valuation, gives us significant cash up-front and lets us retain a meaningful minority stake with talented partners. Skype is a strong standalone business, but it does not have synergies with our e-commerce and online payments businesses. As a separate company, we believe that Skype will have the focus required to compete effectively in online voice and video communications and accelerate its growth momentum.”

Back in April, eBay said that they were planning on spinning Skype into its own brand and preparing a separate IPO for the VoIP company.  Now it is assumed these investors that took control of Skype will work together in preparing the IPO.  This gives eBay the ability to focus all of their energy on their own company and on PayPal.

How much money does Skype make?
In 2008, Skype itself made $551 million in revenue which was a 44% increase from the year before.  eBay’s total revenues for 2008 was $8.5 billion.

How many users does Skype have?
By EOY 2008, Skype had about 405 million users which was a 47% increase from the year before.

Several investors are considering making a bid on Skype, the voice-over-IP service owned by eBay.  eBay bought out Skype for about $4.1 billion in September 2005 but failed to find a real way to integrate the service into their system.

Some of the investors considering making a bid includes Andreesen Horowitz and Index Ventures.  Index Ventures was one of the early investors in Skype.  There is also rumored to be another multi-billion dollar private equity company involved according to TechCrunch.

At one point eBay was considering having Skype have their own IPO.  It is unclear whether the current Skype CEO Josh Silverman will still be involved if an acquisition does take place.  While Silverman was running Skype, the company grew to $551 million in revenue this year.  By 2011, eBay expects Skype to hit about $1 billion in revenues.

Niklas Zennström and Janus Friis both started Skype together shortly after KaZaa.  If Skype gets acquired, then the private equity companies and investors would probably work towards an IPO.

Omidyar Network, the investment arm of Pierre Omidyar’s wealth has made a $2 million grant.  Pierre is the founder of eBay and his personal wealth is roughly $3.6 billion.  The Omidyar Network was started in 2004 and there was about $270 million in assets given to the investment firm.

Some of the Internet companies that the Omidyar Network invested in include Digg, Federated Media Publishing, KaBOOM, Seesmic, Linden Lab, and Wikia.  Wikia is another company that was founded by the Wikipedia founder Jimmy Wales.

Wikipedia receives about 300 million monthly unique visitors and is the 5th most visited website in the world.  However Wikipedia runs on donations and does not have any advertising.  At the end of last year, about 125,000 donors invested $6.2 million in helping keep Wikipedia alive.

Of that $6.2 million, $3 million was given by the Sloan Foundation and an anonymous friend gave $286,800. As part of the investment, Matt Halprin of Omidyar will be joining the Wikimedia Foundation board of directors.  Before working at Omidyar, Halprin was the VP of global trust and safety at eBay.

The eBay Mobile iPhone application has just received a major update.  The iPhone app allows you to bid on items, search for items, and answer customer questions.  This is especially useful for those that like to power sell on eBay.

There will even be push notifications to bidders that have been outbid.  To respond to being outbid, there is a “View” button that appears in the message which will take you to the item so you can up the offer.  There is also a “Close” button if you choose to ignore it.

There is also PayPal integration in the new eBay iPhone application.  This makes it easier to pay for items within eBay Mobile without having to go directly to the eBay and PayPal websites.

Another great upcoming feature in eBay Mobile will be the ability to easily sell items that you have taken a picture of on your iPhone.

[via PCW]

Apparently the guy in the above picture had his XBox signed by former vice presidential candidate Sarah Palin and now he wants to unload it on eBay.  The guy had the XBox signed at the a picnic hosted by Palin in Wasilla, Alaska on July 24, 2009.  This event took place two days before she resigned as the governor of Alaska.  The XBox has a 60GB hard drive and is in perfect condition.  Palin is expected to run for President in 2012.

Here’s the catch.  An early anonymous made a bid $1.1 million.  The user name of the eBay user is confidential and they have made only one other transaction on eBay which he or she received positive feedback for.  Considering that this bid was made so early and at such a high amount, I have reason to believe that it is a fake bid and is a scam.

Even a lunch with Warren Buffett that went for about $1.68 million is worth a lot more than an XBox that wasn’t even signed for the eBay buyer.  Shenanigans, I say!

[via Joystiq]

The world has become a complicated place. It was to my understanding that if a bigger company made you a millionaire a few years ago and you did not have to work for them anymore, you’d just take your money and be happy on some island.  Apparently the founders of Skype have decided to give eBay a hard time even though the company bought them out for $2.6 billion in September 2005.  What more could the two founders want?

eBay wrote in their quarterly filing that there is pending litigation over the technology that Skype uses to operate.  Skype uses a technology licensed from Joltid Ltd.  Joltid is a company run by Niklas Zennstrom and Janus Friis. Aside from starting Skype together, Friis and Zennstrom have also built P2P software KaZaa and P2P video streaming service Joost.

Joltid was seeking to have a licensing agreement terminated on Skype.  Skype filed a claim in the U.K. against Joltid’s push for licensing termination.  But Joltid filed a counterclaim reiterating that they hold the rights to the P2P technology used by Skype.  The trial will be taking place in early 2010.  To mitigate the risk of Joltid having too much software power over Skype, eBay has started developing their own P2P VoIP technology.

“Skype has begun to develop alternative software to that licensed through Joltid. However, such software development may not be successful, may result in loss of functionality or customers even if successful, and will in any event be expensive,” stated eBay.

In April, eBay announced that they are planning to have Skype spin off as its own independent company and have an IPO of their own.  Last year, Skype made $551 million in revenues alone.  Skype’s expected revenue for 2011 is about $1 billion.  eBay said that this setback will not hinder their future plans for Skype.

“PayPal is a business that will be bigger than eBay,” stated eBay CEO John Donahoe at the Fortune Brainstorm: Tech Conference earlier this week.  I give Donahoe credit for being honest because I believe eBay has passed its peak and now there are tons of competitors out there.  And PayPal is a rapidly growing business making billions in revenue for eBay.

PayPal made about $1.8 billion in revenue in 2007 while eBay’s total revenues were $7.7 billion.  This means PayPal made about 23.3% of eBay’s 2007 revenues.  Over the last year eBay made about $8.5 billion in revenues and I believe that PayPal made over 25% of that revenue.

PayPal also recently opened up APIs to developers.  Donahoe said that the company is not far off from the day that a restaurant will beam a bill to your mobile phone and gives the consumer the ability to pay using PayPal.

Warren Buffett auctioned a lunch on eBay recently.  The proceeds of the auction would go to charity.  Initially the winning bidder remained anonymous, but now it has been revealed that Canadian wealth management firm Salida Capital was the winner.  The Salida CEO and several other employees will be sharing the lunch which the firm’s partners bought for $1.68 million and 300 dollars.

“We think we will be able to gain invaluable insights from his years of experience and current insights and perspectives,” stated Salida CEO Courtenay Wolfe. “We think lunch with Warren is going to be a once in a lifetime experience.”

The problem with the lunch is that it may take a year to get on Buffett’s calendar.  Salida’s decision to bid on the lunch was at the last second.  The company bid $100 more than the next highest bidder.  The donation will be going to the San Francisco Glide Foundation.

[via WSJ]

Bryan Tate slapped together a custom barbeque grill that is in the shape of the Death Star from the movie Star Wars.  The grill is currently selling on eBay and is bid up to about $150 as of right now.  There is still about a day and a half until the auction is over so if you want it check it out now.

The weapon dish acts as the vent and there is a little Imperial Cruiser handle to carry the BBQ grill around.  The Death Star BBQ grill was made using two Weber grills and barbeque paint for heat resistance on the outside.  The vent on the top was custom made and there is a second vent underneath.

[via Technabob/SlashGear]

About a couple of years ago, a court decision was made that would give manufacturing companies the power to decide what the minimum price for their goods should be.  This could potentially affect online retail companies too.

eBay, the Burlington Coat Factory, and the U.S. Federal Trade Commission are pushing to have the court decision overturned.  The decision ruled that price-fixing is not a violation of U.S. anti-trust laws.

The Supreme Court decision made was in a court case called Leegin Creative Leather Products vs. PSKS.  eBay VP Ted Cohen has been calling on Congress to pass a bill called the Discount Pricing Consumer Act which would prevent vertical price-fixing.

[via PCW]

In the beginning of March, L’Oréal decided to take eBay to court.  Sometimes fake L’Oréal products appear to sell on eBay and this is why the cosmetics company wanted the online auction company to pay for it.

L’Oréal took eBay to court in four countries, but earlier this week they won a victory in France.  Last year, eBay had to pay €38.6million as part of a fine to Moet Hennessy Louis Vuitton group for a similar case.  eBay also won a similar case against the Rolex Group in Germany several years ago. A ruling is expected to be made in the U.K. soon.

L’Oréal claimed that 60% of their cosmetics being sold on eBay were counterfeits, but the French courts ruled that eBay is meeting obligations to combat fake products from selling.

“This is a clear legal victory for eBay and an important victory for consumers. We are delighted that eBay’s meaningful efforts to fight counterfeits online have been recognised by the court. Today 99% of all items listed on eBay are genuine products and we continue to work hard to ensure eBay is a safe and trusted place to shop,” stated Richard Ambrose, the head of trust and safety for eBay UK and Ireland.  “We have always believed that co-operation is the best way to fight counterfeits. Ongoing dialogue and collaboration, rather than litigation, is the only way to effectively identify and remove any counterfeit items which do appear on our site.”