San Jose, CA (AHN) – eBay, which entered Tuesday into a definitive agreement with four investors to sell 65 percent of its stake in Skype Technologies for $1.9 billion, plans to offer shares of Skype through an initial public offering next year.

In a filing with the Securities and Exchange Commission, eBay said it plans to offer 57.3 million shares of common stocks which has an aggregate value as of Aug. 5, 2009 of $171 million. eBay had planned the Skype IPO as early as April this year.

Skype is the maker and developer of the Voice over Internet Protocol, which is used by millions of people and companies around the world to make free video and voice calls, send instant messages and share files.

The investor group, made up of the Canadian Pension Plan Investment Board, technology firm Silver Lake, global venture capital company Index Ventures and newly launched venture capital firm Andreessen Horowitz, will buy the 65 percent share from eBay, which will keep the remaining 35 percent holding in Skype.

CPP Investment Board senior vice president Mark Wiseman said in a statement, “This acquisition represents an opportunity to acquire a leader in the rapidly growing Internet telecommunications market and one of the most strategically valuable Internet brands in the marketplace. We look forward to working with our partners to help grow Skype in this accelerating industry.”

The CPP Investment Board has lately been into an acquisition mode for telecom companies. In early 2009, it bought Macquarie Communications Infrastructure Group. Macquarie has a 48 percent hold in Arqiva – an infrastructure provider for television, radio and wireless communications in the U.K. – and owns 100 percent of Broadcast Australia.

Its investment in Skype is deemed a wise decision since Skype earned $551 million in 2008 and has 405 million users as of December 2008. The board has 17 million contributors and beneficiaries in Canada and has a $116.6 billion fund as of mid-2009.

eBay CEO John Donahoe said, “There is no doubt in my mind that the talented players that make up this investment group will enable strong growth of Skype in the years to come?. The management team at Skype is one of the most innovative in the industry, and their talent and innovation will be enhanced through this partnership. For eBay, this transaction allows us to unlock both immediate and long-term value while benefiting from talented partners to help Skype accelerate its growth momentum.”

eBay forecasts Skype’s income to go beyond $1 billion by 2011.

Donahoe added, “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.”

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New York, NY (AHN) – Online auction powerhouse eBay has inked a deal to unload 65% of the voice over IP (VoIP) chat client Skype for $2.75 billion. In April, eBay announced plans to spin off Skype after initially acquiring the company in 2005 for $2.6 billion.

Now, eBay confirmed it has struck a deal with an investor group led by Silver Lake that includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board. The deal includes almost $2 billion in cash and the rest in notes.

“This is a great deal, unlocking both immediate and long-term value for eBay and tremendous potential for Skype,” eBay President and CEO John Donahoe explained. “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,” Donahoe added.

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It made big news in 2005 when eBay bought up Skype to the tune of $2.6 billion with a lot of talk about how it would change how online auction could done. Well here we are four years later and eBay still hasn’t figured out how to wire it into their existing auction business. It has gotten to the point that they are even talking about spinning it out as a separate company on the hunt for an IPO.

Now as smart as that might be there is a great big hitch right in the middle of all this – eBay doesn’t own the core technology that makes Skype work. That still belongs to the original founders of Skype through their company Joltid. It is also the same technology that eBay has been paying licensing fees to Joltid so that they could keep Skype running.

Uhm. Excuse me but just how brain dead is a company that will spend $2.6Billion on a company and its products but not make sure that they end up owning the very core part of that company that actually makes the product work. I’m sorry but that has to the biggest blunder in the world of tech and internet business that I have ever seen.

As it is right now eBay is headed to British High Court to try and force Joltid to let it continue to use the technology. However they are already warning people that there might be a chance that the technology they are developing in-house to replace what they were licensing from Joltid.

eBay is saying that if they can’t come to an agreement with Joltid and their software solution isn’t ready by the deadline they may have to shut Skype down. As well even if they do manage to get their software solution up and running in time Skype users may experience lose of functionality in Skype.

In a quarterly report filed with the US Securities and Exchange Commission, eBay said in no uncertain terms that if it lost the right to use the software it would most likely have to shut Skype down.

eBay said it was working on developing ‘‘alternative software’’ to that licensed through Joltid, but this ‘‘may not be successful, may result in loss of functionality or customers even if successful, and will in any event be expensive’’.

‘‘If Skype was to lose the right to use the Joltid software as the result of the litigation, and if alternative software was not available, Skype would be severely and adversely affected and the continued operation of Skype’s business as currently conducted would likely not be possible,’’ eBay wrote.

In the filing eBay also said that, even if it was successful in developing alternative software, the technical challenge of assuring backward compatibility with older versions of Skype’s technology ‘‘may be difficult to overcome’’

Source: The Age :: Shock threat to shut Skype

Jeez no wonder Meg Whitman ran when she did.

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I totally get that this whole geotarding thing can’t be placed directly at the feet of companies like Hulu and Pandora. I understand that they are having to play nice with rights holders around the world and some of them just don’t want to play nice at all. So it was good to hear today that Hulu looks to be cutting deals with all the players involved in television broadcasting in the UK and hopefully by September those lucky sods in the UK will be able to enjoy a great service.

However this still begs the question – what about the rest of us poor saps who will still find ourselves stuck behind the geotarding wall?

What really gets me riled up is that services like Hulu and Pandora don’t explain in plain English and not some legalese doubletalk as to why the rest of the world can’t use the service. We saw the same thing when Skype said that their App Store application for the iPhone would, or would not, be available in Canada but with limitations, like being able to make outgoing calls over VoIP. The strange part of this is that we can use Skype in Canada on our computers and buy Skype minutes with Canadian dollars.

All we got from Skype was that it was due to patent problems. This is slightly more than we get from Hulu or Pandora, who say it’s because they couldn’t come to copyright agreements. Well you know what? this is all pure and unadulterated bullshit.

We are supposed to be in an era where social media is the great equalizer but it seems sometimes that when it come to issues that cause companies to have to ‘legitimately’ geotard their products the power of social media gets forgotten. Much of the argument around the reasons for geotarding revolves around copyright issues or problems being able to target advertising properly. Well the second issue is just plain stupid and really shouldn’t even be a consideration.

The first though is something that can be changed – if the companies were honest with us as to exactly why they are having to geotard a country; or countries. Say for example the problem with Hulu being able to open up to Canada is due to the CRTC (Canadian Radio and Telecommunication Commission) then tell us that. Or perhaps it’s because the monopolizing television and cable broadcasters are the ones causing the problems then tell us that.

Then bring the so-called power of social media to bear on the problem. Don’t hide behind neatly couched legalese. Call on the people – because I would bet dollars to donuts that if we knew exactly what the problem was there we would be able bring what pressure we can to see changes are made – or at least try our damndest.

Instead we are treated like mindless consumers with no voice in finding solutions to the problems which says a lot about what companies really think about this whole social media thing.

[picture courtesy of Telegraph Online because I live and Canada and wouldn’t be able to get a screenshot of a show playing on Hulu.]

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The center, located in Vancouver, Canada, will shut down by this coming September. eBay calls the move a step in its plan to “consolidate” its customer service facilities.

“It is eBay’s intent to increase the number of employees at its Salt Lake City facility, which currently employs more than 900 customer service agents, and at certain other facilities globally,” the company said in a statement.

eBay just recently announced plans to spin off Skype to get back to the basics of its business. The service’s original founders have expressed interest in buying back the communications company.

eBay just finished a second consecutive weak quarter, with earnings most recently being down 22 percent from the same time one year ago.

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Possible Skype Sale

The duo sold Skype for an end-total of $3.1 billion, including bonus payouts, back in 2005. Now, they seem to be rethinking that decision. The Times quotes someone with “knowledge of their discussions” as saying the two are actively working to generate a billion dollars in financing.

While eBay hasn’t directly commented on the reports, the company’s CEO has apparently indicated in the past that he’d be willing to consider a sale, noting Skype’s “few synergies with [eBay's] core e-commerce and payments businesses.”

A Skype sale would likely happen at a price around $1.7 billion, analysts tell The Times.

Wonder if all the recent attention (and business potential) surrounding the Skype iPhone app release has anything to do with this?

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Skype has launched a new Mac client that adds one particularly interesting feature: desktop sharing.

The new Skype allows call or chat participants to share all or part of their desktops on demand, emulating the core service of Web-Ex and a pile of similar companies.

There’s some other interesting new features as well, Twitter like status messages, WiFi access and better usability, but it’s the screen sharing that is potentially the most disruptive. All of a sudden over 100 million users just got access to a free desktop sharing platform.

A lot of the Web-Ex style services do offer additional features, as does Web-Ex itself, so the comparison isn’t perhaps apples and apples, and some also offer free services as well, so the potential of undercutting existing services on price doesn’t come into play. The killer is simply having this service at hand, on demand, and without the usual hassle of having to set up a share beforehand. There’s also no need for an additional download outside of Skype itself which some services demand; and as I’ve discovered more than once some services are often Windows only where as this available to everyone…well eventually anyway, Windows users can view a Mac shared desktop over Skype now, even if they can’t share their own quite desktops yet.

It’s great to see the Mac version of Skype getting some attention; usually it lags well behind the Windows version for new features, and this continued push forward with improvements and great value ads can only bide the company well if and when eBay tries to sell it later this year.

Disruptive Techonlogy has a demo video that includes the desktop sharing as follows:

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Skype President Josh Silverman points out that all communications companies in China are required to abide by government regulations, which “include the requirement to monitor and block instant messages containing certain words deemed ‘offensive’ by the Chinese authorities.” He also says, however, that Skype had been under the impression that Tom was only deleting messages found to be “offensive,” and not storing them.

“We are now inquiring with Tom to find out why the protocol changed,” he says.

As far as the security breach itself, Silverman confirms that Skype addressed the issue with Tom immediately after learning of it, and that the breach has been fixed. He also notes that only instant messaging conversations were affected, not standard Skype voice-based communications.

“Skype-to-Skype communications are, and always have been, completely secure and private,” he promises.

The promise isn’t reassuring enough to many in China, with some even worrying that those whose conversations were captured could have been imprisoned or “had their lives ruined in various ways” because of the issues.

“This is a big blow to Skype’s credibility, despite the fact that Skype executives are downplaying it as not such a big deal,” Hong Kong University Internet expert Rebecca MacKinnon tells Reuters.

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It’s mainly in China, if that makes you feel any better. A report (PDF), by public interest group Information Warfare Monitor (affiliated with Citizen Lab), found Skype’s China-based service — called Tom-Skype — had been scanning messages for key terms such as “Taiwan independence” and other politically charged phrases. Messages with those terms were being snagged and stored along with the users’ personal information, the group says.

The problem? They were being stored on insecure servers, IWM says, and the key needed to decrypt the data was being stored there, too — so practically anyone could get into them. And we’re not talking small numbers, either: The group found more than 166,000 censored messages from 44,000 different users. The report suggests the Chinese government may somehow be involved with the process.

A Skype statement today indicated the security issue — which it said was related to the Tom servers, not its own — had been resolved. The statement also suggested that the “vast majority” of Skype users outside of China were not affected.

Sure makes you wonder what those messages are/were being used for…

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Jaman movie clips will be played directly within the Skype client, so users may add a video to their mood and share favorite movie trailers from Jaman with their contacts. Viewers will also be able to browse and select movies from Jaman’s library, featuring acclaimed independent comedies and dramas, Kung Fu action movies, cult classics, Bollywood films, art house favorites, provocative documentaries, and a collection of the world’s award-winning shorts.

But please, if you’re making Skype calls, do not watch a video while the other party is talking. Listen. It’s unethical not to.

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