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.

AT&T has changed their mind about disallowing iPhone VoIP applications. Now VoIP applications will be able to run on AT&T’s 3G network. This includes Vonage and Skype. Before Skype and Vonage were only allowed to operate on WiFi hotspots. This limits where you can use the applications.

One of the reasons why AT&T may have decided to let down their guard is because the FCC is investigating why Google Voice has been rejected multiple times. Will this make it more likely for Google Voice to be approved? Nope.

Apple did not reject Google Voice for VoIP reasons, but because it “appears to alter the iPhone’s distinctive user experience by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls, text messaging and voicemail.”

Will AT&T end up paying less? Perhaps the telecommunications company will require customers to have minimum contracts to make sure that they don’t lose too much money from allowing VoIP services.

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.

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.

Anyone that has used Skype knows that the service is a good alternative to using international calling cards, but using headsets aren’t clear.  This is why the eBay subsidiary company has designed a headset of their own called the FREETALK Everyman.  The headset is USB-powered.  The device does not cost much: $22.88 and it ensures good Skype sound quality.  To buy the headset, click here.

[via TechCrunch]

Skype for the iPhone was released back in April and now the application has been updated.  The new version of the Skype iPhone application allows users to send SMS messages and check voicemail.  One of the desired features that are lacking in the newest version of the application is push notifications.

“Skype iPhone is kinda useless with no push notifications so 1.1 still kinda useless. Why even include IM capability without it, what are people supposed to do – send me an email that we should skype chat?” wrote a commenter on the Skype Blog.

Push notifications are the ability to inform the iPhone there are incoming messages and incoming calls without the need for the application to be running at the time.  AOL has successfully implemented this feature for their AOL Instant Messenger software on the iPhone.

“We’re concentrating on providing the very best experience possible on the iPhone. Your feedback is important – it’s why we’ve included SMS and voicemail in this release. But we can’t do everything at once, unfortunately,” wrote Skype blogger Peter Parkes.

Despite an offer that KKR, Warburg, Providence, Elevation Partners, and the original founders of Skype proposed, eBay Inc. (NASDAQ:EBAY) decided to keep the VoIP company they acquired for $2.6 billion about four years ago.  Instead eBay will spin off Skype as its own company in 2010 and will file it to go public.

“Skype is a great stand-alone business with strong fundamentals and accelerating momentum,” stated eBay President and CEO, John Donahoe. “But it’s clear that Skype has limited synergies with eBay and PayPal. We believe operating Skype as a stand-alone publicly traded company is the best path for maximizing its potential. This will give Skype the focus and resources required to continue its growth and effectively compete in online voice and video communications. In addition, separating Skype will allow eBay to focus entirely on our two core growth engines—e-commerce and online payments—and deliver long-term value to our stockholders.”

Below are some of Skype’s stats:
- 2008 revenue: $551 million, 2007 revenue: roughly $382 million
- Number of Skype users: 405 million by the end of 2008
- 2011 expected revenue: $1 billion
- Josh Silverman will now be the head of Skype.

Recently Skype created an iPhone application and millions of people were downloading it as soon as it came out.  Over 1 million people downloaded it within the first 36 hours.

[via eBay press release]

Om Malik spoke with Skype CEO Josh Silverman if the company was planning to launch an iPhone application with their VoIP service.  Skype has been downloaded over 405 million times.  But now its been confirmed.  Skype is almost ready to launch on the iPhone possibly next week at the CTIA Wireless mobile event in Las Vegas.  Skype already has a Windows Mobile supported version of their service.

[via GigaOm]

Mozilla will be supporting the Electronic Frontier Foundation to push for the legalization of iPhone jailbreaking with the U.S. Copyright Office.  Mozilla CEO John Lilly stated that “choice is good for users, and choice shouldn’t be criminalized.”  Jailbreaking an iPhone means that the device can accept software that is external from what is offered on iTunes.  Apple believes that accepting any external software is a violation of the Digital Millenium Copyright Act (DMCA).

“This is not us criticizing Apple,” stated Mozilla CEO John Lilly. “But it’s the principle of the thing. Choice is good for users, and choice shouldn’t be criminalized. The Internet is too important for all of us for that.”

Some of the popular applications available on jailbroken iPhone applications include tethering applications.

Mozilla may have a bias against Apple because developing a browser for the iPhone would require them to use the Webkit rendering engine used for Safari.  “Given the choice, would we work on a platform where the sole company controlling it makes us unwelcome, or would we work on a platform, like Linux, where we are welcome? The answer is going to be easy for us,” Lilly stated in an interview with Computerworld.

Even if the U.S. copyright office grants jailbroken iPhones from being legal, Mozilla is still unlikely going to develop a browser for the iPhone.  This is the same case with Opera Software ASA.  It was reported earlier that Apple blocked Opera’s web browsing application from being added to the iTunes App Store.  Other companies supporting the EFF include Skype and Cydia.

As you may remember from back in 2005, Skype was bought out for $2.6 billion by eBay Inc. (NASDAQ:EBAY).  eBay has been struggling to find ways to integrate Skype into eBay, but has found that it is making pretty good revenues anyway.  Skype’s user base is growing at a rapid pace as other VoIP companies are struggling to compete.  The latest figure is that Skype is growing by more than 4 million users every 12 days.  About one-third of Skype’s users have it for business purposes including Pulse 2.0.

Skype has recently achieved a milestone by finding that at one point there were 15 million users online concurrently according to the Skype blog.  This was made possible by the 405 million users worldwide.  Everyday 380,000 new users are being added.  This is just in time for the release of Skype 4.0.

In terms of finances, Skype made about $550 million in revenues last year.  This revenue was earned by subscribers paying for the low cost Skype Out software.  Skype allows free calling between subscribers, but charges for Skype Out.  Skype Out is for subscribers that want to call other landlines and mobile phones.  In the last quarter of 2008, abuot 2.6 billion SkypeOut minutes were used, growing at 61% every quarter.

The new version of Skype touts higher quality audio and a bandwidth manager to make video streaming more seamless.  “There has never been a better time than now for enterprises — particularly small to medium businesses — to consider switching to Skype for their communications,” stated Dan Neary, Skype’s new VP and General Manager of Asia Pacific.

“In this type of environment people are looking for cost savings wherever they can find them, they are looking to ‘recession-proof’ their businesses,” added Neary. “They don’t want to fly from A to B, they want to do video-conferencing. More and more, this offering is becoming applicable for people in business.

[via PCWorld]

The Pirate Party is a political party that has been spreading across Europe.  The party works on reforming laws that revolve around invasion of privacy, intellectual property, copyright, and patent protection.  The Pirate Party leaked documents belonging to the government of Bavaria, Germany which revealed that they were attempting to contract out the development of a trojan in order intercept encrypted Internet communication.  This includes wiretapping Skype.

The Bavarian government was attempting to contract this software to a company called Digitask.  The first document was an inquiry about whether Digitask can put it together and a list of suggested monthly prices to pay them.  The second document that was leaked included an outline of how Digitask would deploy the solution.  The malware that Digitask would build was referred to as the “Skype Capture Unit.” 

The Skype Capture Unit would be in the form of an executable file delivered to a target machine according to Ars Technica.  This file would then transfer unencrypted conversations to a Skype Recording Server.  This server can record 10 Skype conversations at once and then send it to another party. 

Some VoIP software that is available on the market already has wiretapping built-in.  VoIP open source software generally makes it hard to tap conversations.  Currently Skype doesn’t have wiretapping built-in so your conversations on the software are safe for now.

Mendeley is a start-up based in London.  The idea for Mendeley came about when the founders discovered that there isn’t an easy way of sharing their collection of research papers while pursuing their PhDs.  This turned into a business opportunity for them. 

The Mendeley desktop software also complements the research-sharing website.  Mendeley Desktop software is compatible with Windows, Mac, and Linux.  The software extracts text from PDF files and integrates it into a user’s profile.  Other users will be able to find specific research papers through the form of search and tags. 

“As the database of Mendeley Web grows, you will be able to view statistics about emerging research topics in every academic discipline, and readership statistics for each individual paper” stated Victor Henning, co-founder of Mendeley. “Soon we will also include a recommendation engine. Basically, it’s like a Last.fm for research.”

Stefan Glänzer, a seed investor and executive chairman of Last.fm was intrigued by the concept.  Stefan Glänzer joined Mendeley as executive chairman and then brought in the founding engineers of Skype to help out with building Mendeley.

“There are plenty of websites that want to become ‘the Facebook for researchers’” stated Eileen Broch, an investment director at Ambient Sound Investments (ASI).  “Mendeley, however, is not just another social network. It’s a truly valuable integration of software and web technologies that solves some of researchers’ day-to-day problems – which is why we decided to invest.”

ASI is the investment group that was created by the four founding engineerings at Skype.

Related Links:
1. Mendeley
2. ASI
3. OpenPR

“UDC has a monolithic team that can guarantee fast growth and be successful in putting all pets in the world to the web.”
-Tauno Tats, CEO of ASI

United Dogs and Cats, Ltd. (UDC) made a call to the Skype founders for an investment. And Ambient Sounds Investments (ASI), the company formed by the 4 engineers behind Skype answered the call. Ambient invested about $235,000 into the pet social network company recently. United Dogs and Cats runs UnitedDogs.com and UnitedCats.com, a couple of social networking companies for pet owners.

Between both sites, there are only 40,000 users. This is not a whole lot. The design of the homepage is pretty sloppy too. If I was United Dogs and Cats, I’d hire a user interface expert. UnitedDogs and UnitedCats has profiles, blogs, and photo sharing.

United Dogs and Cats will be opening a new platform and languages over the next few weeks.  UDC also has a Facebook Application and allows users to find each other via Google Maps if interested.

Ragnar Sass is the CEO of Estonian-based UDC.

Competitors include Dogster, Catster, My Dog Space, and My Cat Space, Petster, Pawspot, Fuzzster.

Information Source:
[1] UDC Blog: Pet Owner’s Social Network Secures Additional Funding from ASI by Ragnar Sass
[2] TechCrunch: Skype Co-Founding Engineers Invest In Pet Social Network by Duncan Riley