paidContent - eBay's New Plan To Get Around Skype Litigation

This story was written by Joseph Tartakoff.
eBay insisted as recently as last week that the “separation” of Skype remains on track—and behind the scenes its trying to find a way around litigation that could put the deal in jeopardy. eBay has been mired in litigation with Joltid, a company started by Skypes founders that licenses the peer-to-peer technology behind Skype to eBay (NSDQ: EBAY). In its quarterly SEC filing, eBay says it’s now working to “develop alternative software to that licensed through Joltid.

eBay better hurry. A trial in the case is scheduled for June 2010, but it has said it hopes to spin off Skype in the first half of next year. Considering it also acknowledges in its filing that it “wouldn’t be able to continue to operate Skype unless it can resolve the legal problems,” the litigation is likely to get in the way of the spinoff.

It might actually be easier for eBay to sell Skype than to spin it off, considering the litigation. Possible buyers include Skype (and Joltid) founders Niklas Zennstrom and Janus Friis, who reportedly were trying to line up money to buy back the company earlier this year. Presumably, they would have no problem licensing the Joltid technology to Skype, if the calling service was back in their hands.

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By Joseph Tartakoff