Maybe the best heist ever: everything you need to know about the EBay Skype sale

It has been a fairly humiliating experience for EBay. When the auction-site bought VoiP giant Skype for $3.1 billion back in 2005, it quickly became hailed  as one of the worst purchases of the millenium. Ever since, EBay has been trying to get rid of Skype. Today, it finally leaped the last hurdle. What has caused them so many problems?

What’s the story?

When EBay bought Skype in 2005, it had some vague plans to use it for allowing buyers and sellers to talk to one another for cheap on-line. But EBay users tend to prefer keeping things anonymous, and it found it had a service that it couldn’t make money from. EBay itself lamented the “limited synergies” that existed between the two companies.

Fast forward 4 years, and GoMo News reported at the start of September how a group of private investors were pooling their resources to take Skype off EBay’s hands. Their asking price was $2 billion, putting EBay at a distinct loss. But the complete failure of EBay to monetise Skype meant that it was more than happy to recoup at least some of its losses.

But there was a big problem.

Skype doesn’t own the technology it runs on. A company called Joltid created the peer-to-peer technology that Skype uses. Skype just licenses it. The issue is that when EBay bought Skype, it didn’t pay Joltid a single cent. EBay never acquired the license that was essential for Skype to keep running! Legal issues arose from the patents and licensing issues, and Skype and Joltid ended up in court with Jolid trying to pull the license. Through legal wrangling, Skype managed to get the decisions put off until June 2010 - which still meant that Skype might suddenly find itself without an engine next year.

What was the solution?

It boils down to these basics:
- Skype gains ownership of the Joltid technology, so it’s safe from sudden collapse next year.
- the Skype founders get to join the consortium of private investors who are buying it, thereby gaining back a 14% share in the company they sold off 5 years ago.
- EBay gets to regain a little money, and never do anything like this again.

What we think?

“But wait?” you might say “what do the guys from Joltid get?” And that’s the really great part about this entire story. You see, the founders of Joltid, , Niklas Zennstrom and Janus Friis, are also the founders of Skype. That’s right: when EBay “bought out” Skype for three billion dollars, they allowed its owners to keep ownership of Joltid and therefore the license for Skypes’ underlying technology. And Zennstrom and Friis have used that as leverage to pull in a vast amount of extra money from what should have been a straightforward deal between EBay and the consortium. Well done, you clever bastards! It’s the heist of the century!