Feeds

Skype pair happy to take the money and run

Joost in time

Top 5 reasons to deploy VMware with Tegile

Skype's founders say they are happy to have shaken down eBay for $530m, despite missing out on the huge payday they would've scored if the service was a bigger success.

The cash is only a third of what Janus Friis and Niklas Zennstrom would have trousered in 2009 if Skype had hit profit targets. In a posting on this blog, Friis gets all misty-eyed and sanguine, and writes: "Earn-outs are inherently difficult creatures, but we are happy with the result of this one.

"Skype has been an incredible adventure and I am proud to have been part of it. Looking back at 2003, at two guys running around with a crazy idea of building a global phone company purely on the internet, moving from one rented apartment to another, still battling a major lawsuit from our Kazaa days, 2003 seems a long time ago.".

As well as paying off the founders, eBay is taking a $900m hit for overvaluing Skype. The total $1.43bn charge will go a long way to wiping out its quarterly revenues, which last time round (three months to 30 June) were $1.8bn. Of course, its huge reserve coffers will absorb the blow easily.

Friis and Zennstrom have both been relieved of executive duties by eBay, and will concentrate on IPTV venture Joost, which came out of an invite-only beta yesterday into version 1.0. After exciting many with the quality of its video, Joost doesn't seem to have signed up any shows worth watching during its months of development.

The writing was on the wall at Skype when eBay boss Meg Whitman delivered her verdict during financial season in January. She said: "The monetisation efforts we outlined at the time of the acquisition are not developing as quickly as we had hoped."

The miss doesn't seem to have sated eBay's appetite for inexplicable cash splashing, however. It recently splurged $75m on StumbleUpon, a niche social bookmarking site with 3.5 million users and negligible revenues.

eBay's investors don't seem too bothered by yesterday's admission of failure, and held its stock price steady in trading on Monday The $2.6bn Skype clanger had already been factored in by Wall Street, it seems. With a monopoly on online auctions in the west, and overall profit margins of more than 20 per cent, eBay can afford a few mistakes, but we'll bet it won't take another Skype-sized punt for a while. ®

Security for virtualized datacentres

More from The Register

next story
You! AT&T! The only thing 'unlimited' about you is your CHEEK, growl feds
Man, we did everything but knock on their doors - carrier
The DRUGSTORES DON'T WORK, CVS makes IT WORSE ... for Apple Pay
Goog Wallet apparently also spurned in NFC lockdown
EE launches 150Mbps '4G+' in the heart of London
LTE-A – Faster phones for Hoxton Hipsters
Watch out, Samsung and Apple: Xiaomi's No 3 in smartphones now
From obscurity to selling 19 million mobes a quarter
Brazil greenlights $200m internet cable to Europe in bid to outfox NSA
Only one problem: it won't make the slightest difference. And they know it
Wanna hop carriers with your iPad's Apple SIM? AVOID AT&T
Unless you want your network-swapping tech disabled for good, that is
Knocking Knox: Samsung DENIES vuln claims, says mysterious blogger is a JOKER
But YES, system does store encryption key on the device
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Protecting against web application threats using SSL
SSL encryption can protect server‐to‐server communications, client devices, cloud resources, and other endpoints in order to help prevent the risk of data loss and losing customer trust.