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The founders of Skype agreed to join the investor group buying the Internet-calling service from EBay Inc. and to drop litigation that had threatened to shut down the company.
Niklas Zennstrom and Janus Friis, who sold Skype to EBay in 2005, and their company Joltid Ltd. will take a 14 percent stake in the company alongside a group led by private-equity firm Silver Lake, San Jose, California-based EBay said today in a statement. They also will drop lawsuits filed against Skype and the investor group in London, California and Delaware.
The settlement resolves questions about how Skype would operate in the future. The founders, who owned the underlying software code to the Web-calling service, had accused EBay of breaking a licensing deal and sued the investor group in September. EBay said in July it was trying to develop alternative software for Skype. The settlement removes a key distraction for EBay Chief Executive Officer John Donahoe.
Index Ventures, which helped orchestrate the deal, will no longer be part of the investor group. Skype will own the service's software code.
The fight for Skype has been building for more than a year. Soon after Donahoe became EBay's CEO last year, he said he would evaluate whether Skype was a good fit for the company. In April, EBay announced plans to hold an initial public offering for the phone service, saying it had little to do with the online retailer's other businesses.
About that time, the battle escalated over the software code that the founders licensed to Skype through their company Joltid Ltd. The pair had accused Skype of altering the code, and Skype sued them in a London court. Skype's lawyers told the judge that if Joltid's claims weren't invalidated, it would be devastating to Skype and it might be forced to shut down.
In September, an investor group led by Silver Lake agreed to buy Skype for about $2 billion. Zennstrom and Friis struck back, filing lawsuits in federal courts in California and Delaware against the group and accusing one member, Michelangelo Volpi of Index Ventures, of stealing company secrets while he was CEO of their Internet-video company Joost NV.
Niklas Zennstrom and Janus Friis, who sold Skype to EBay in 2005, and their company Joltid Ltd. will take a 14 percent stake in the company alongside a group led by private-equity firm Silver Lake, San Jose, California-based EBay said today in a statement. They also will drop lawsuits filed against Skype and the investor group in London, California and Delaware.
The settlement resolves questions about how Skype would operate in the future. The founders, who owned the underlying software code to the Web-calling service, had accused EBay of breaking a licensing deal and sued the investor group in September. EBay said in July it was trying to develop alternative software for Skype. The settlement removes a key distraction for EBay Chief Executive Officer John Donahoe.
Index Ventures, which helped orchestrate the deal, will no longer be part of the investor group. Skype will own the service's software code.
The fight for Skype has been building for more than a year. Soon after Donahoe became EBay's CEO last year, he said he would evaluate whether Skype was a good fit for the company. In April, EBay announced plans to hold an initial public offering for the phone service, saying it had little to do with the online retailer's other businesses.
About that time, the battle escalated over the software code that the founders licensed to Skype through their company Joltid Ltd. The pair had accused Skype of altering the code, and Skype sued them in a London court. Skype's lawyers told the judge that if Joltid's claims weren't invalidated, it would be devastating to Skype and it might be forced to shut down.
In September, an investor group led by Silver Lake agreed to buy Skype for about $2 billion. Zennstrom and Friis struck back, filing lawsuits in federal courts in California and Delaware against the group and accusing one member, Michelangelo Volpi of Index Ventures, of stealing company secrets while he was CEO of their Internet-video company Joost NV.
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