The Social

Sold!

Auction site eBay has, as long anticipated, sold off the Skype telephony service to a group of investors that includes Marc Andreessen's new Andreessen Horowitz group, Silver Lake, and the Skype co-founders' Joltid Ltd. The investor group now holds about 70 percent of the company; eBay retains the rest in a minority stake. Joltid was brought into the investor group as part of the settlement of a copyright suit that the Skype co-founders, Janus Friis and Niklas Zennstrom, filed against eBay over Skype's technology. At one point, that dispute was looking so ugly that eBay was reportedly considering rebuilding Skype's technology altogether.

The sale amounted to approximately $1.9 billion in cash and a note from the buyer in the principal amount of $125 million, for a total of $2.025 billion.

eBay's plans to get rid of Skype, a purchase that had never fit quite well into its auction business, had been well-publicized. Last spring, the company formally announced that it planned to spin off Skype as a publicly traded company in the first half of 2010.

The final $2.75 billion valuation is only slightly higher than the $2.6 billion that eBay originally acquired Skype for in 2005.

eBay wants to spin off telephony service Skype into a separate publicly traded company, but something's standing in the way: Skype's founders are threatening to take back some of the technology amid a licensing dispute.

The auction giant's solution, according to a Bloomberg report on Thursday: build a new one.

This was revealed in a 10-Q regulatory filing with the Securities and Exchange Commission; eBay is not commenting beyond the filing. You can decide whether "Frankenskype" or "Skypenstein" is a better name for the hypothetical creation.

Here's what has happened: Skype's founders have established a company called Joltid Ltd., which still owns the rights to some of Skype's technology. Joltid has made the accusation that eBay doesn't have the right to do everything it wants with all of Skype's code as a result; eBay is suing Joltid to get that technology back. (Is this like the Silicon Valley equivalent of body-snatching?) But the catch is that the trial isn't scheduled until next June, which could put a big roadblock in the way of eBay's plans for a Skype IPO.

So that's why eBay is working on a total rebuild of Skype's software.

There is, however, this little issue. "The new software will be expensive and might not work," Bloomberg's article summarized. "The company said it might have to shut down Skype if the dispute with the founders isn't resolved."

eBay purchased Skype in 2005 for $2.6 billion, but it hasn't proven to be the best fit for the company. Rumors circulated that it was looking to sell Skype, possibly to Google, but then opted to take the company public instead.

Download Skype for Windows | Mac | iPhone | Windows Mobile from CNET Download.com.

Amid stormy economic seas, auction giant eBay has thrown overboard StumbleUpon, the recommendation and "discovery" start-up that it purchased in 2007 for approximately $75 million.

Replacing corny nautical puns with corny alcohol puns, this looks like a symptom of the hangover that followed eBay's acquisition binge during Web 2.0's heyday. Even though many speculated that eBay would use StumbleUpon's technology to power product recommendations, the two companies just didn't find a fit--or a way to make a decent return. eBay's acquisition habits have been more vocally criticized when it comes to Skype, the online telephony start-up that was acquired for $2.6 billion in 2005. It's a well-received product, but never had an obvious niche within eBay and observers have long speculated it would do better on its own.

Financial terms of the StumbleUpon spinoff were not disclosed, but it appears that the company was sold back to the two founders, Garrett Camp (who will serve as CEO) and Geoff Smith, and investors Accel Partners, August Capital, and Ram Shriram of Sherpalo Ventures.

"We are grateful to eBay for its guidance. However, we realized there were few long-term synergies between the two businesses. It is best for us to part ways and focus on our respective strengths," Camp said in a statement. "This change makes it possible for StumbleUpon to continue to innovate and focus on becoming the Web's largest recommendation service."

Last fall, a rumor spread that eBay had hired investment bank Deutsche Bank to help find a buyer for StumbleUpon.

The big question now: Will it do the same with Skype?

Tokoni, a community site for "sharing stories," has formally launched after nearly a year of public beta. It has taken investment backing from eBay as well as the auction giant's founder, Pierre Omidyar, and was founded by former eBay executive Mary Lou Song and Alex Kazim, former president of the eBay-owned Skype. Kazim serves as Tokoni's CEO.

"We created Tokoni to fill the distinct need for an online community where individual stories of life's experiences have a voice and are valued, and where the collective wisdom of the community is celebrated," Kazim said in a release. "The growth of social media has enabled people to control how they create, consume, and share content and personal experiences online; however, participation in the social Web is still daunting to the mainstream. Tokoni makes sharing your own story easy."

Indeed, as an adult-focused "community" site rather than a social network, Tokoni's target audience is one that hasn't caught on to the blogging and Twittering craze, and offers a more Luddite-friendly forum for conversation by encouraging the posting, reading, and discussing of personal stories and experiences. Another site with a similar slant is Gather.

With the U.S. presidential election approaching, Tokoni (which means "help" in Tongan) has partnered with WomenCount.org to provide a forum for women to discuss political issues.

You'd think the parent company of $1,500 Louis Vuitton handbags would be able to tolerate a few fakes on eBay. Not so.

And a French court agreed on Monday, ordering the online auction giant to pay $61 million (38.6 million euros) to luxury goods powerhouse LVMH, according to Reuters. LVMH, along with other luxury-brand groups like Tiffany & Co. and Hermes, has claimed that eBay isn't strict enough about policing the sale of counterfeit goods on its site.

eBay promptly appealed the court decision, saying that LVMH was simply trying to crack down on competition; eBay makes money off any LVMH goods sold on its site, real or fake, whereas LVMH itself does not.

LVMH has an impressive portfolio containing a whole lot of brands that Kanye West has probably name-dropped in multiple songs, like Louis Vuitton, Acqua di Parma, Thomas Pink, Dior, Givenchy, Moet & Chandon, De Beers, and Marc Jacobs.

Monday's ruling encompassed a number of individual cases brought by LVMH brands like Dior Couture, Guerlain, Givenchy, and Kenzo. The 38.6 million euros awarded fell short of the 50 million euros that the luxury goods house had claimed in damages.

This post was updated at 10:34 a.m. PDT.

News Corp.-owned social-networking site MySpace has announced a new initiative called Data Availability, a way for members to share profile data with other social and community sites across the Web.

Co-founder and CEO Chris DeWolfe, Chief Operating Officer Amit Kapur, and vice president of technology Jim Benedetto announced the new development in a press call Thursday. DeWolfe called it "an innovative offering to empower the global MySpace community to share their public profile content and data to Web sites of choice throughout the Internet."

Inaugural partners in the project are Yahoo, eBay, Photobucket (also owned by News Corp.'s Fox Interactive Media), and Twitter. The program, available to MySpace's users worldwide, will be rolling out to a full version in the coming weeks.

"Historically, social destinations on the Internet have operated as independent, autonomous islands," DeWolfe said. "Today, MySpace no longer operates as an autonomous island on the Internet...We're hoping to create a significantly more social experience across the Web."

This is a huge deal.

When rival Facebook, then far smaller than MySpace, opened its platform to developers last year, the bigger social network started to fall from favor among the tech-savvy set. But Facebook has been reluctant to partner with other sites outside of allowing them to create developer applications, only recently allowing RSS feeds from partners like Digg and Yelp into its members' "news feeds." When popular blogger Robert Scoble tested a script that exported his Facebook contact information to a Plaxo address book, Facebook temporarily banned his account.

Facebook still hasn't caught up in user accounts--it has about 70 million, while MySpace is over 100 million--but MySpace was in need of some tech cred regardless. Signing on to "open Web" initiatives could be what keeps MySpace relevant, and it's clear that some engineers over there are tuned in. It was one of the biggest partners when Google announced the OpenSocial developer application standard last year, and one of the "founding partners" along with Google and Yahoo when OpenSocial was spun off into its own nonprofit organization.

"Socially dynamic Web destinations should be portable," DeWolfe said, "and should allow users to import and export aspects of their platform."

Amit Kapur said that Data Availability is "founded first and foremost on allowing users to have comprehensive control over their content and data." Partnerships with Yahoo, eBay, Photobucket, and Twitter will give MySpace access to more than 150 million U.S. Internet users, he explained, with an 85 percent reach in the U.S. Web user market. Smaller sites, as well as other large social networks, are invited to join the program, too.

That public profile information consists of information like photos, videos, and profile content like favorite movies and music as well as friends' lists. Changing data on one profile automatically changes it on the partner sites as well, which users can opt into "connecting" to their MySpace profiles by clicking a button. "This is incredibly powerful and makes an entirely new social experience available to our users," Benedetto explained. MySpace will be rolling out a central control panel to handle it. "A user can update their profile on MySpace and dynamically share that information with the other sites they care about," Kapur said.

All authentication will be handled through OAuth (Open Authorization), and technology director Benedetto said the company is looking at other "open and nonproprietary standards." Currently, OpenID is not supported, but he said that MySpace is exploring the possibility.

MySpace is also officially joining the social-networking project known as the DataPortability Workgroup, which contains members from many other major social sites across the Web.

JavaScript and server-side controls will be released over the next few weeks for partner sites' administrators to have access to public MySpace data. Benedetto said that MySpace will be "aggressive" to make sure that profile data is not exploited by third parties.

The big question: Will Facebook want to be a part of it? "This project is open to any site out there that wants to work with us," DeWolfe said, "so we're happy to work with Facebook if they want to join up with us on this project."

In a tiff over its 28.4 percent share in Craigslist, auction giant eBay has filed suit against the online classifieds site in a Delaware court of chancery. According to Reuters, eBay has accused Craigslist's board of directors of diluting its share.

The court confirmed that eBay filed its complaint Tuesday afternoon but could not provide further details, because the suit was filed under seal.

In a phone conversation, Craigslist founder Craig Newmark said, "We're still trying to digest it," and recommended contacting CEO Jim Buckmaster for further comment. Buckmaster did not immediately reply to an e-mail inquiry.

Newmark, Buckmaster, and the Craigslist company are reportedly named as defendants in the suit, the Reuters article asserts.

This post was updated at 9:45am EDT with comment from Google.

Will eBay sell Skype to Google?

It's no secret that many in Silicon Valley regard eBay's 2005 acquisition of the telephony service as a $2.6 billion misstep. But new rumors, reported late Tuesday night on TechCrunch, suggest that eBay may be negotiating Skype-related partnerships with Google or even selling it outright.

"We do not comment on market rumor or speculation regarding acquisitions," a Google representative told CNET News.com in an e-mail. "Generally speaking we are constantly in discussions about potential partnerships in cases that will be mutually beneficial for users, advertisers, and publishers." Representatives from Skype were not immediately available for comment.

There was very little detail to the rumors, except that Google's "core team" for voice operations is reported to be suspiciously absent from this week's CTIA Wireless trade show in Las Vegas. So at this point, it seems to be Valley gossip at its finest.

But a Google-owned Skype would make a whole lot of sense. Google already operates a voice over Internet protocol (VoIP) service through its Google Talk messaging client and purchased communication management start-up GrandCentral last year. With its open-source initiatives like Android for mobile phones (especially considering Skype's vocal desire to make a splash in the mobile market) and OpenSocial for social networks, Google would be in a much more ideal position than eBay to turn Skype into a "hackable," developer-friendly product.

Henry Blodget of the Silicon Alley Insider figured that Skype could sell for as much as $5 billion to $6 billion.

And while Skype may have seemed like a sweet buy for eBay back in 2005, a $900 million write-down and a CEO resignation later, eBay is in a tight spot, and the Skype purchase has likely grown a little sour.

eBay announced Monday that it has appointed new CEOs to its Skype and Shopping.com properties. At the helm of telephony company Skype will be current Shopping.com president and former Evite co-founder and CEO Josh Silverman; taking his place at Shopping.com will be Andre Haddad, who joined eBay in 2001 when it acquired his start-up, the European marketplace site iBazar.

This continues an extensive management shakeup at the online commerce giant, which saw the departure of longtime CEO Meg Whitman in January. eBay itself has been going through some tough times, with seller dissatisfaction leading to a boycott over fee hikes and new rules.

Meanwhile, many questioned whether Skype was a smart acquisition for eBay in the first place when the company disclosed a $1.4 billion write-down last year to handle Skype-related charges. Skype also suffered a two-day outage in the summer of 2007.

Silverman will replace interim Skype CEO Michael van Swaaij, who was appointed to the post in October when co-founder Niklas Zennstrom (now at the helm of Joost) left the post amid the $1.4 billion snafu.