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Skype’s Fight With Founders Said to Be Nearing an End (Update1)

By Joseph Galante and Edward Robinson

Nov. 3 (Bloomberg) -- A group of investors that agreed to buy Skype from EBay Inc. are close to a settlement with the company’s founders that may be announced as soon as this week, according to two people familiar with the matter.

Under the proposed agreement, Skype’s founders, Niklas Zennstrom and Janus Friis, will join a buyout group led by private-equity firm Silver Lake, said the people, who requested anonymity because the negotiations are private. Michelangelo Volpi, a partner at Index Ventures who helped orchestrate the deal, may drop out of the transaction, the people said.

The founders, who sold Skype to EBay in 2005, own the software code that powers the Internet-calling service and have accused EBay of breaching a licensing deal. In September, the founders’ company, Joltid Ltd., sued EBay and the investor group planning to buy Skype. Volpi, a former chief executive officer at one of the founders’ other companies, had a falling-out with Zennstrom and Friis.

“It’s highly unusual for a deal organizer to get booted and for the deal to then go forward,” said Scott Cleland, founder of telecommunications consulting firm Precursor LLC in McLean, Virginia.

The founders have accused Volpi of stealing company secrets to orchestrate the Skype deal. Volpi was CEO of Joost, which Zennstrom and Friis founded after Skype. Joost built an Internet video service using the same underlying technology as Skype.

Not Final

The terms of negotiations may still change, said the people. The founders will get at least one board seat, said one person. It isn’t clear what stake they will hold or whether they’ll assume executive duties, the people said.

It also hasn’t been determined if the founders will continue licensing the software code to Skype or give it to them outright, the people said.

EBay is focused on closing the sale of Skype and doesn’t have further comment, said John Pluhowski, a spokesman for the San Jose, California-based company. Joltid declined to comment. Jamie Moser, a spokeswoman for Volpi, didn’t immediately return calls seeking comment.

EBay rose 7 cents to $22.51 today in Nasdaq Stock Market trading. The shares have gained 61 percent this year.

The agreement was reported earlier today by the New York Times and on the GigaOM blog.

To contact the reporters on this story: Joseph Galante in San Francisco at jgalante3@bloomberg.net; Edward Robinson in San Francisco at edrobinson@bloomberg.net

Last Updated: November 3, 2009 18:57 EST