Skype founders Janus Friis and Niklas Zennstrom are dropping suits against eBay, to whom they sold Skype in 2005, and against a consortium of private finance companies trying to buy Skype from eBay. The founders had accused both groups of intellectual property theft. They're dropping those lawsuits in exchange for 14 percent of Skype.

But former Wall Street Journal reporter Kara Swisher reported last night on Dow Jones' All Things D website that the founders would get not 14 percent but up to 13 percent of the company — 10 percent outright and an option to buy another 3 percent. Sacrebleu! Rob Wauters of rival TechCrunch was quick to rub Swisher's face in the minor error, writing that the founders "are getting 14 percent of Skype back for rights to the... technology their company... controls... and not 10% like previously reported by other media" (emphasis from original). Meow!

The press release issued by Skype actually confirmed Swisher's reporting that the founders had to put in money to get some of their shares. Swisher later acknowledged that the figure was 14 percent, just one percent higher than she had written. But she also engaged in a lengthy Twitter fight with Wauters and his colleague Erick Schonfeld (see below) over their public nitpicking and fact-bending. Maybe everyone involved in this fracas needs to take the next couple of days off. Oh, look at the calendar!

(Top pic via)

Skype founders Janus Friis and Niklas Zennstrom (pictured) appeared to have it made before the computer wizardly was allegedly stolen. They had eBay, to whom they sold their internet phone-call service in 2005, on the ropes. The online auction company was trying to sell Skype, but Friis and Zennstrom's barrage of software-licensing and copyright lawsuits against eBay scared off potential buyers like Google. eBay, it seemed, would be forced to accept Friis and Zennstrom's own lowball offer to buy back Skype.

Then a consortium of private finance companies swooped in with an offer — ultimately accepted — valued at a cool $2.8 billion. It just so happened that one of the buyers, Index Ventures, employs a guy named Mike Volpi, who used to work for the Skype founders. One of Volpi's tasks for Friis and Zennstrom, according to their suit (embedded below), was to learn how to replace the "Global Index" software code at the heart of their various internet communications software, including Skype. Being able to remove this software would potentially moot many of Friis and Zennstrom's Skype lawsuits, thus making Skype much more valuable to its owner — the company Volpi now works for.

Friis and Zennstrom are alleging that ex-employee Volpi stole secrets from them, and breached his fiduciary duty as chairman of one of their companies, online video company Joost. In so doing, they are not only kicking off an epic, $2 billion nerdfight, they are also cementing their reputations as among the most litigious entrepreneurs in tech. In addition to suing eBay in both U.S. and British courts, and Volpi, they've also filed three separate lawsuits against the investment banker who represented them in their sale of Skype, according to the New York Times.

For a couple of guys whose product is revolutionizing global communication, Friis and Zennstrom have a distinctly old-fashioned way of sending a message.

Joost lawsuit

Coverage elsewhere: VentureBeat, TechCrunch

(Top pic by Steve Jurvetson)

But hey, Joost's plugin adds a social layer and RSS feeds! What, nothing for Facebook or the iPhone?

If you're going to placate disgruntled investors like Viacom CEO Philippe Dauman with technology buzzwords, try to pick something they might have heard of. Cofounder Niklas Zennström might want to stick to yachting, because at least that enterprise is a winner.

Kate Larkin emailed a colleague — on her BlackBerry, so we know there was some urgency to it — about a "pending Joost story on Valleywag." When I told her that I didn't know of one, she went back into positive-spin mode: "We've got lots of great stuff going on. Deals closing, browser version coming, etc." (Too bad about the browser version — that might have been timely four years ago.) My experience with PR people — sorry, Kate, "comms directors" — tells me that they only reach out like this when they're trying to defuse a ticking time bomb of bad news. Any idea what got Larkin in a lather this morning? We're ready to soap up.

We come at Joost or other platforms from the point of view that we cannot predict—nor did we in that case or any other case—predict which ones are going to be hugely successful, moderately successful, which won't work.

I worked with Dirk-Willem van Gulik at Joost, and I've got to say I'm surprised it took them this long to fire him, the guy is an arrogant, condescending jerk who has a demoralizing effect on anyone that must work with him. In a 20 year career, I don't think I've ever met someone I enjoyed working with less.

For example, in conversation he would pretty-much concoct terms and acronyms on the fly, and then act like you are a moron for not knowing what they mean. On later research you discover that Google has never heard these terms either.

He is the type of guy that non-technical people find convincing, and even if you are reasonably technical, it can take a while before you realize he is full of crap, but eventually you will.

The people here are livid that he was obviously lining up a new gig when he should have been doing his job here, hence going public about the involuntary nature of his departure.

I feel sorry for those at the BBC who must work with him now, but I have one tip — next time he casually throws out an unfamiliar term or acronym to convince people he is smarter than you, Google it, you will
probably find it is wholly or partially made up.

The BBC's Future Media and Technology Group appointed van Gulik chief technical architect this afternoon.

That news apparently surprised Joost. Joost PR first told NewTeeVee that van Gulik would continue as a consultant for the company. On a second call, the flack told the blog that van Gulik had been "terminated."

What could have caused their story to change so fast? Here at Valleywag, we're on the case, actively searching the Internet for a photograph of van Gulik's girlfriend's boobs or at least a shot of the CTO ripping a bong hit. Because why else does anybody get fired around here? You could, of course, let us know.

H.264 makes it possible for dramatic quality improvements in Internet video, it's true. However, most loser-generated content is still being produced with crappy cameras, on home computers with cheap editing software. The update to Flash will not create a tidal wave of better content. It only removes one of many roadblocks.

And, needless to say, a more advanced algorithm won't improve the subject matter of Web videos. YouTube will remain just as inane and crappy as before. The difference between professional and amateur content, however, will become more and more distinct. We'll still be inundated with videos of dressed-up pets and teenagers lip syncing two feet away from the camera (always original and entertaining). We'll just be more aware that we're watching crap.

For Adobe, it's a timely move. Content producers were beginning to eschew Flash video's universality for higher-quality download formats; startups like Joost were hoping to develop alternative video delivery mechanisms by emphasizing better image resolution; and Microsoft thought it saw an open door to compete with Flash through Silverlight, its competing multimedia platform which supports another HD-video format. Adobe just closed the door on competitors and cemented its control of online video for the foreseeable future. And if it renders people's home videos that much more tiresome, all the better.

Digg, of course, was infamously profiled in BusinessWeek last August, which assigned the company a value of $200 million. Most of Silicon Valley found that number spurious, but the credulous executives who run big media companies actually believe what they read in magazines. With Rose launching Pownce, a new Twitter-like file- and bookmarks-sharing service, and Adelson increasingly focused on Revision3, now would be a good time to offload Digg, whose noisy community of users is just getting more and more fractious.

Then there's Marc Andreessen and Gina Bianchini, the chairman and CEO, respectively, of Ning. Ning, long an ill-defined Web 2.0 startup, has found its purpose in life — making Facebook apps and other social-networking tools easier to build. Along with the purpose came $44 million in funding, in a round orchestrated by Allen & Co. And hence the invite. It's a bit early for Andreessen to sell, so we'll bet he'll content himself with hawking his build-your-own-MySpace tools to everyone besides Rupert Murdoch.

Why build when you can buy, though? Facebook, the former college-kid social network which has been growing spectacularly since it opened its doors to everyone last fall, has all the buzz right now, prompting Murdoch himself to diss MySpace. Facebook, of course, has been showing every sign of wanting to go public. The IPO option gives CEO Mark Zuckerberg, rumored to be attending Sun Valley this year, more leverage in any negotiation.

Rounding out the tech corps: Bill Gates of Microsoft; Yahoo CEO Jerry Yang, CFO Sue Decker, and even the gone-but-not-gone Terry Semel; and Mike Volpi, the former Cisco executive who's now running online-video startup Joost. Oh, and the usual old-media suspects.

There's one puzzling omission on the guest list, if reports are true: Quincy Smith, president of CBS Interactive. Smith is himself a former Allen & Co. dealmaker, which makes his absence curious indeed. Anyone know why people are saying Quincy won't show?

(Photo by briancaldwell)