Skype CEO, Zennstrom Steps Down To Concentrate On Joost; eBay Having Cognitive Dissonance?

Posted Oct 1, 2007

After Niklas Zennstrom recently stepped down from his position as Skype’s chief executive to pursue other entrepreneurial ventures, eBay began to question whether their investment was really worth it. “He could have continued to run the company, but he wanted to focus on new opportunities. He’s an entrepreneur at heart,” stated eBay spokesperson, Hani Durzi.

eBay will be shelling out $1.43 billion for Skype-related payments this quarter. About $900 million will be for a write-down of Skype’s valuation and $530 million will be used to settle future obligations. The $900 million is based on impairment, meaning that eBay overvaluated Skype when they acquired the company in 2005 as part of a $2.6 billion agreement.

Michael van Swaaij, eBay’s VP for European operations will take over as the Skype CEO until a replacement is found. Russell Reynolds Associates was hired by eBay to find a replacement.

As Zennstrom steps down, he continues to defend Skype’s growth through an interview. “Very few companies can claim to match the growth trajectory Skype is on and continues to be on,” stated Zennstrom.

“Beyond creating a business, Skype literally touches millions of lives and this is something to be proud of,” added Zennstrom.  “I would like to think that we have contributed to making the world a little bit flatter.”

Zennstrom is now going to strictly concentrate on Joost for product and content strategy. Coincidentally, Joost opened to the public today too. Niklas Zennstrom studied in Sweden, but spent his final year of school at University of Michigan-Ann Arbor (U of M).  Larry Page also studied at Univ. of Mich. Ann Arbor, where a Google AdWords office opened recently.