24/7 Wall St. TV: eBay (EBAY) Shares Hurt By Skype

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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.

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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

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Executive Producer: Philip MacDonald