Sunday, September 30, 2007

Zennstrom Steps Down as CEO of Skype, eBay Takes Impairment Charge

Niklas Zennstrom has stepped down as CEO of Skype but will become non-executive chairman of the Skype Board of Directors. Michael van Swaaij, eBay's Chief Strategy Officer, will become acting CEO until a permanent successor is found.

eBay also announced that it has paid €375 million (approximately $530 million) to settle all of its future obligations under the earn-out agreement signed with certain Skype shareholders when eBay acquired Skype in 2005. The earn-out agreement provided for payments of up to approximately €1,200 million (approximately $1,700 million) based upon specific active user, revenue and gross profit targets that were to be achieved in 2008 and the first half of 2009. eBay believes that the €375 million payment is reasonable given the progress and anticipated rapid growth of Skype's active user base.

eBay expects that the €375 million payment (approximately $530 million), together with an additional amount of €630 million (approximately $900 million), will be taken as an impairment charge to be recorded as part of its Q3 financial results.

  • Skype was founded in 2002 by Niklas Zennstrom and Janus Friis.

  • The eBay + Skype acquisition was first announced in September 2005 for approximately $2.6 billion in up-front cash and eBay stock, plus potential performance-based consideration.

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