Monday, October 01, 2007

Skype Earnout negotiated at 1/3 of the total

Janus Fris via his blog - is reporting that the eBay/Skype earn out has been negotiated early. According to Janus, Niklas and himself are approximately 1/2 way through the earn out period and they have agreed to a settlement totaling 1/3 of the maximum.

I am not an expert in earn out clauses, but there seems to be a sense of urgency to get this one off the books. Also the fact that only 1/3 of the total amount payable suggests that Skype is not performing even close to what eBay had originally expected. The revolving management door that has been Skype since the acquisition opens up some interesting discussion points.

  • Did they realize what they were buying once they decided to take over?
  • Is eBay going to dump Skype? and was the earn out holding up a pending sale?
The lack of integration between Paypal, Skype and eBay has been pretty apparent. It took nearly two years to just integrate Skype as an IM notification option in eBay options (and it still doesn't work very well). The power of '3' as was discussed at the Skype developer conference 2 years ago, certainly hasn't materialized in any way.

Skype in and of itself is amazing, but its power lies in its disruptive entrepreneurial founders and not the corporate dot the i's culture it currently runs as. I am not sure the same 'startup' passion is still there, not with its partners, developers or employees.