Online auction giant eBay ended a year-long battle with the founders of Skype yesterday, clearing the way to sell off the Internet calling service. Litigation had been flying back and forth among Skype's founders, Niklas Zennstrom and Janus Friis, who sold it to eBay in 2005, eBay, and an investor group led by Silver Lake Partners. Zennstrom and Friis will will get a 14 percent stake in the independent company and two board seats. In exchange, the founders will make a "significant capital investment" in Skype and give the company ownership of crucial software. When eBay bought Skype for $2.6 billion under the direction of then-CEO Meg Whitman, it didn't buy the software from Joltid, a firm controlled by the founders. The software later became the basis of an intellectual-property dispute. One of the buyout firms, Index Ventures, which was caught up in the legal action for a separate issue, withdrew from the investor group. Under the new terms, Silver Lake and other investors, including Andreessen Horowitz and the Canada Pension Plan Investment Board, will own 56 percent of Skype. EBay will retain 30 percent. "Skype will be well- positioned to move forward under new owners with ownership and control over its core technology," said eBay CEO John Donahoe. "At the same time, eBay continues to retain a significant stake in Skype and will benefit from its continued growth."

Originally published by HOLLY SANDERS WARE.

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