Skype Future Owners Jolted by Joltid

(MoneyWatch)  Having been involved in due diligence during M&A myself, I understand that it's a critical activity. And for that reason I have to shake my head at eBay as well as some of the companies taking over Skype: private equity firm Silver Lake and VCs Index Ventures and Andreessen Horowitz. And it all comes down to how ineptly they have dealt with an IP licensing scheme that should have been nailed down literally two years ago.

That's when eBay bought Skype in 2007 and Skype founders Niklas Zennstrom and Janus Friis left. Zennstrom and Friis, who own Joltid, retained ownership of some technology that is key to how Skype works.

Just a few weeks ago, eBay announced that it was selling Skype for $2.75 billion, which was a bit more than it had paid. Not a bad deal ... except that there had been a public snag. Joltid had been in a row with eBay since March, claiming that the auction site owner overstepped the bounds of its license to the key technology and that it had withdrawn the license.

Skype has noted in SEC filings that it "is confident in its legal position," but, really, what high tech company acquires another for a customer base and product line and then agrees to license, not to own, some of the technology that it key to the operations? You'd have to be nuts. I don't care how airtight the license seems to be. This is presumably one of those "key competency" issues. How can you let that sitting in the vault of another company?

eBay paid $2.6 billion for the company. What, it wasn't enough money to buy everything? Then maybe the deal shouldn't have been done. And how could the investors who are buying Skype not recognize how tenuous an arrangement this was? Who was doing the due diligence, Hank Greenberg of AIG?

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