eBay paid 2.6 billion dollars for Skype in 2005 and sold it on Friday for a bit more.
Why did eBay sell? I think that in 2005, eBay planned to use Skype to allow sellers and buyers to communicate by voice. Apparently, Skype’s founders retained rights to Skype’s underlying file-sharing software, named FastTrack P2P. I suspect that eBay’s lack of ownership of all of Skype’s source code prevented eBay from securely integrating Skype with eBay’s transaction data, so they sold it.
Skype’s founders, Janus Friis from Denmark and Niklas Zennstrom from Sweden, originally used FastTrack P2P to create the infamous Kazaa peer to peer file sharing system. They sold Kazaa to Sharman Networks. Next, they used the FastTrack techology to create Skype, which they sold to eBay. They then founded Joost, which shares video using — you guessed it: FastTrack P2P.
I’d like to meet the lawyers who convinced eBay to buy Skype in 2005 without ownership of its underlying technology.
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