How much gold do you pay pirates?

They came for fortune but were keelhauled and made to walk the plank. Now Skype's founders are back in a small fast ship, ready to sink her if they don't get paid. Do you fight to defend the S.S. Skype? Can you bribe the scoundrels and trust them to leave? Or do you bend, take them on as partners, and suffer them so you can put back to sea?

What do the two sides bring to the parley?

The Captain Z and Mister Friis wield barristers and silver. They sued Skype over the software license, swearing oaths were broken, blood is due, and Skype should be dry-docked until treasure is paid. They sued the new investment team, claiming keys to Joltid's treasure were smuggled from Joost's lockbox to key investors. And they lugged a treasure chest of cash and promises for outright ownership.

eBay and the Capitalists race to safer waters. Skype's quartermasters slaved for months to replace Skype's sails with sheets of their own making. Skype's lawyers dispute each scurvy claim and denounce them. It looks like prevailing winds for Skype's lawyers but fate, the courts, and codemongers are uncertain. 

Can eBay buy their absence cheaply this winter? Are you better off swashbuckling until a verdict comes next summer? Would you throw the Index Capitalists overboard, making room for the Dane and Swede at the Captain's Table? Could you ever turn your back once they were aboard?

The tale comes to this. Would you make a deal with the Devil himself to save your ship a battle? Or can you chart a course for open seas that leaves the pirates adrift in your wake?

Bonus Clue: Are the pirates on retainer in a grander scheme? Who benefits if Skype fails? Who would pay two billion dollars to shut Skype down?

tags: skype, joltid, joost, pirates, piracy, litigation, ebay, $ebay, $skype

Call me at +1-510-316-9773, Skype me, follow @skypejournal and @Phil Wolff.
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Pop quiz: What kind of Pirate are you?

BusinessWeek Book review: Piracy as Innovation Strategy: Can illegal copies provide inspiration? "Matt Mason, a former London deejay and the founder of RWD, a popular British magazine, argues for piracy as a business model rather than a threat. In his new book, The Pirate's Dilemma, he discusses the history of piracy--and how it drives innovation"

"The founders’ offer fell on deaf ears"

From the WSJ.com Deal Blog [links and emphases mine]:

A group including KKR, Warburg Pincus, Providence* and Elevation Partners recently teamed up to back the founders of Skype in an attempt to buy back their free Internet calling service from Ebay, according to people familiar with the bid.

Founders Niklas Zennstrom and Janus Friis originally approached Ebay about repurchasing Skype, which acquired the service for $2.6 billion in 2005. Ebay encouraged them to make an offer, and the Scandinavian billionaires rounded up a group of private-equity firms to back them, the person familiar with the bid said. News of the Skype’s founders’ offer was earlier reported in the New York Times, but names of the private-equity firms have not yet been reported.

The proposal involved private-equity firms contributing some $1 billion to the deal, according to people familiar with the situation, though a full deal price could not be learned. The transaction also involved Ebay providing financing for the deal.

The founders’ offer fell on deaf ears, as it was well below the price at which Ebay was willing to sell the business. The two sides are far apart and at this stage a deal involving the private-equity firms is unlikely to be completed, said people familiar with the matter.

*I suspect it was Provident Bankshares, not Providence; Provident is about to be purchased by KKR.

So this gets back to valuation. Survey: What's a fair price for Skype?