Niklas Zennstrom has left his role as CEO of Skype, the VoIP firm eBay purchased in September 2005, and eBay will eat a substantial charge to push him out the door.
Skype Paid Off, And Zennstrom Departs
Way back when eBay made its big bid for Skype, which Zennstrom and Janus Friis created after building Kazaa, eBay put some big bucks on the table. In addition to the $1.3 billion in cash and another $1.3 billion in stock, eBay would pay “certain Skype shareholders” up to $1.5 billion more, provided certain financial targets could be met by 2008 or 2009.
Something must have gone wrong with that deal, as eBay announced Zennstrom would step down from his CEO post at Skype, in favor of Michael van Swaaij, eBay’s Chief Strategy Officer, who will serve on an interim basis.
Instead of that $1.5 billion payday, eBay will pay $530 million to those “certain Skype shareholders” previously noted but not named, to settle that agreement. That $530 million will contribute to a $1.43 billion hit eBay will take in its third financial quarter.
Zennstrom will hang on as chairman of Skype for a time, but his co-founder Friis sounded ready to move on to focusing on video site Joost and their venture capital firm, Atomico:
Earn-outs are inherently difficult creatures, but we are happy with the result of this one. We are approximately half way into the earn-out period and the settlement amounts to one-third of the total possible earn-out amount.
Looking at the future, the excitement does outweigh the nostalgia.
Skype’s future could be outside of eBay. If it has missed its projections to the point where eBay CEO Meg Whitman believes paying off Skype early is a better strategy than waiting, perhaps Skype will end up in a “Buy It Now!” auction soon too.
