eBay(EBAY) Shares Down On Skype Suit

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By Douglas A. McIntyre Updated Published

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eBay (EBAY) shares are trading down about 2% at $23.96 on news that a company owned by Skype’s founders has filed a filed a copyright suit against the VoIP company, according to The Wall Street Journal.

The firm the founders own is called Joltid and it has a patent on peer-to-peer technology that is used in Skype’s software.

eBay has agreed to sell about two-thirds of Skype to a group of investors for $1.9 billion in cash and $125 million in debt.

The founders say that damages may be running as much as $75 million a day.

The group buying Skype might see it as a way to get out of what may not be a very good deal. The public company proxy for the VoIP industry is Vonage (VG). When the Skype deal was announced shares in Vonage rose to $2.63, but quickly collapsed to $1.40.

VoIP market share in the US is still dominated by the large cable companies, particularly Comcast (CMCSA) and Time Warner Cable (TWC) which bundle the services with broadband and TV products.

Skype’s main service is free of charge. The company has tried to upgrade users to paid services, but its success has been modest

Douglas A. McIntyre

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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