eBay cuts strike price for Skype deal

ONLINE auction site eBay has cut as much as A$1.36 billion off the potential A$4.9 billion it agreed to pay for VoIP phenomenon Skype when it acquired the company in 2005 because of under performance of the unit.

The write-down in the Skype sale prices came as the company restructured senior management at the VoIP unit, with Skype co-founder Niklas Zennstrom stepping down as CEO of the eBay Skype unit.

The management changes and cost write-downs are seen as an admission of the lackluster performance of the Skype acquisition.

eBay announced that it had paid about US$530 million (A$600 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 US$1,700 million (A$1,925 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 (A$600 million) payment is reasonable given the progress and anticipated rapid growth of Skype's active user base,” the company said in a statement.

Having stepped down as Skype CEO, Mr Zennstrom will become non-executive chairman of the Skype board of directors, while eBay chief strategy officer Michael van Swaaij will become Skype’s acting CEO until a permanent successor is found.

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Warezov now targets Skype users

ROGUE net users have created a new variation of Warezov/Stration malicious code that is currently spreading through the Skype network, attacking Skype users’ machines, security specialists have warned.

WebSense Security Labs issued a warning that Skype users receive a message that says “Check this up”, with a URL containing a hyperlink.

Although the code itself is not self-propagating, when it runs, a URL is sent to all users within the user's contacts list.

When users click on the link, they are redirected to a site that is hosting an .exe file that users are prompted to click. WebSense notes that there is no vulnerability within Skype itself, but if the users runs the .exe file, several other files are automatically downloaded and run.

Once the computer is infected it can be accessed by the attacker and the Trojan will start propagating by sending the rogue message to everyone in the users contact list.

Skype has warned users against opening the malicious .exe file. The company said users should be careful before opening any attachment in general.

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Skype links to Paypal to offer money tranfers

INTERNET telephone leader Skype will soon offer a money transfer service through the online payment service PayPal that lets users send money to other Skype users, cofounder Niklas Zennstrom said.

The Skype chief executive told a technology conference in Silicon Valley the company was working with PayPal on the design of the new service, which will effectively make Skype a competitor to companies like Western Union.

Many of the 171 million Skype users use the system to reduce costs in keeping contact with overseas friends and family, a group seen as strong potential users of international money transfer, Mr Zennstrom said.

The payment service, which is called Send Money, is expected to be formally unveiled in about a month. The tie-up makes sense – both Skype and PayPal are subsidiary units of online auction goliath eBay.

PayPal is already the most common way Skype users pay for premium services (like making calls to traditional phones).

Overseas observers are saying the money transfer service is likely to be one of a growing number of applications to be offered through Skype.

Third-party software developers are understood to have been encourage to look at Skype as a platform where voice is just one service. The company wants developers to build other services on top of the system, and has already announced a series of premium business services to be offered.

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VOIP to ‘rob’ telcos of $20 billion by 2011

NEW communications players like Skype and Google are set to ‘rob’ traditional carriers of US$18.2 billion (A$23.2 billion) in revenue by 2011, according to new research from UK-based Analysys.
Companies like Skype and Google were successfully fostering novel forms of communication among online communities and potentially posed a major threat to core communications revenue, the report said.

Skype and similar voice over IP services could account for 5.4 per cent of the global fixed line telephony market in 2011.

Though growth among these VoIP providers had been seen as incremental, they would increasingly substitute for traditional communications services, the “Opportunities for Non-traditional Players in Communications Markets” report said.

“Online communities and portals create a market for communications that occupy a middle ground between one-to-one and one-to-many interactions,” the report’s author Stephen Sale said in a statement.

“The success of many of these services calls into question established ideas of user behaviour and suggests alternative means of addressing the communications market,” he said.

“Non-traditional players can capitalise on their presence online and in end-user devices to make inroads into telecoms companies’ core revenues.”

The market for content aggregation of on-demand video by online retailers is likely to be about US$820 million by 2011.

It also found that online players would fend off competition from direct-to-consumer portals – and the mobile sector – to take more than 60 per cent of the music aggregation market worth US$4.3 billion by 2011.

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