Skype founders want to buy back company from eBay

It looks like a serious bid to buy Skype from eBay is coming to the table from co-founders Niklas Zennstrom and Janus Friis. The duo have reportedly talked up several private equity firms to put together a multi-billion dollar offer for Skype.

Reports say eBay wants at least the $1.7 billion current book value of Skype, while Zennstrom and Friis are trying to raise a billion in private cash with eBay possibly putting a seller’s note together for another $1 billion. Given Skype had revenues of $145 million in Q4 2008, setting up a financing instrument for the purchase of a company expected to generate more than $500 million in 2009 shouldn’t be that tough.

Skype was originally sold to eBay in 2005 for $2.6 billion and bonus payments increased the final price to $3.1 billion, so both Zennstrom and Friits are also likely good for a large chunk of cash on a repurchase effort.

Since buying Skype, eBay has been confused as to what to do with the company, ‘fessing up that the communications company hasn’t blended well with its core competencies of e-commerce and payments businesses.

Other buyers for Skype may be scared off/locked out of discussions due to low-key intellectual property discussion between eBay and Skype founders. In a recent regulatory filing, Joltid, which – surprise — was founded by Zennstrom and Friis – has terminated eBay’s license to Joltid’s peer-to-peer technology at the heart of Skype. The lawsuit is currently in a British court and also begs the question as to why eBay didn’t get exclusive rights to Skype’s peer-to-peer technology in the first place when it shelled out the original $2.6 billion.

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Google Cuts 200 Jobs in Sales and Marketing

Google has announced another round of layoffs, this time for about 200 people in sales and marketing. The move comes two months after the search giant said it would scale back hiring of recruiters.

"Just under 200 were affected with about half those working in North America," said Matt Furman, a Google spokesperson. "Everyone affected was told yesterday. Each person will be given a chance to find another job at Google and if they can’t or they choose to leave, they will be given severance."

The company also offered the affected employees outplacement support.

Second Round

In January, Google said it would scale back its engineering efforts by reassigning positions. The company closed offices in Texas, Norway and Sweden and moved engineers to other offices.

The announcement of the cuts sent a chill on Wall Street and throughout the industry, signaling that even Google was feeling the brunt of the weakening economy and the worst may be yet to come.

Google in January also said it would scale back recruitment efforts. The company said it would continue hiring, but at a reduced rate.

Google began by scaling back all its contracts with external contractors and vendors that were providing recruiting services. Then the company decided it needed deeper cuts and reduced the overall size of its recruiting business by 100 positions.

Google said the job cuts are a result of the company’s fast growth in a short period of time. Since 2001, Google has acquired 53 companies. While most of its growth was between 2005 and 2007, with 36 acquisitions, the company continued to acquire businesses in 2008, despite the ailing economy. Companies acquired in 2008 were Omnisio, an online video company, and Tatter and Company, a blogging-software company.

Making Mistakes

"When companies grow that quickly, it’s almost impossible to get everything right — and we certainly…

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Video Games Continue Strong Sales in February

The video-game industry is one of the few bright spots in an otherwise grim economic environment. According to figures compiled by market research firm NPD Group, sales of games and hardware were 10 percent higher in February compared to a year before, bringing in a robust $1.47 billion in revenue.

That good news follows a similar increase in January, when U.S. retailers reported a 13 percent rise. Altogether, the industry has generated nearly $3 billion in sales in the first two months of this year.

In an e-mail to media late Thursday, NPD Group analyst Anita Frazier said that despite the tough economy, "the U.S. video-game industry continues to post strong year-over-year comps. Unit sales increased even more than dollar sales did, reflecting a slightly lower average retail price for all categories as compared to last year."

Wii Remains Ahead

The leader of the pack in the game-console battle once again was Nintendo, which sold a remarkable 753,000 Wiis in February alone. The company was also strong in the handheld market, selling 588,000 DS devices.

Microsoft finished in second place for the month, moving 391,000 Xbox 360 units, while Sony once again brought up the rear with 276,000 PlayStation 3 sales.

Taken together, hardware sales increased slightly more than the video-game sector as a whole, rising 11 percent over the same period last year.

Sony’s solid position at the back of the console pack has lent credibility to rumors that the company is planning a price reduction (estimated to be $100 off the PS3′s $399 price) to regain market share. News on whether the company will go through with a price drop and how much it will be is expected at the end of next week.

America Getting in Shape?

Nintendo also took top honors in the software segment — the Wii Fit with Balance Board sold 644,000…

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Barnes & Noble Sales Drop But Remains Profitable

Barnes & Noble reported its Q4 and full year results for the period ending January 31st today, and the company was profitable despite substantial sales declines. CEO Steve Riggio laid it out. “While 2008 proved to be the most challenging year that the company and the industry have ever experienced, we are proud of our financial results in light of the macro retail environment,” he said.

Net earnings were $81.2 million for the quarter and $75.9 million for the year (after a couple of Q4 charges) despite an over-all sales decline of 6% for the quarter and 3% for the full year. Sales were $5.1 billion for the year.

Inventories were reduced by 11%, certainly no surprise to the publishers who were seeing the returns and order reductions that those inventory cuts represented.

The company is forecasting a 6% to 9% reduction in Q1 sales, and a 4% to 6% reduction in full year sales for its Barnes & Noble stores this year.

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Electronic Arts Cuts 10% of Its Staff

Electronic Arts said Friday that it would cut 1,000 jobs, representing 10% of the company’s workforce, by March.

In October, the Redwood, Calif. game publisher said that it would cut 6% of staff. Today’s announcement is an upward revision of that number. Electronic Arts also said today that it would close or consolidate nine of its game studios, including Black Box, the Vancouver studio that produces the Need For Speed and Skate games. Black Box employees will move to another EA development studio in British Columbia.

Skate 2 (pictured) is scheduled to be released in January on Xbox 360 and PlayStation 3.

“EA is implementing a plan to narrow its product portfolio to focus on hit games with higher margin opportunities,” reads today’s statement. Hard to blame them, these days.

Source: GameLife

Barnes & Noble Experiencing Declining Graphic Novel Sales

The nation’s largest book chains are feeling the pain of the financial crisis and passing it on to their suppliers, with a tough holiday season and 2009 ahead. Graphic novel buys for November and December have been cut 30% to 60% by the two largest book chains, according to one major graphic novel publisher.

Leonard Riggio, chairman of Barnes & Noble, said that the chain was “bracing for a terrible holiday season” in an internal memo to employees published by the Wall Street Journal. “Never in all the years I’ve been in business have I seen a worse outlook for the economy,” the memo said. “And never in all my years as a bookseller have I seen a retail climate as poor as the one we are in. Nothing even close.”

Barnes & Noble has been experiencing year over year same store sale declines for the first time ever for the chain.

Riggio emphasized in the memo that B&N was well-positioned, as a profitable company with no bank debt and access to credit if needed. But he painted a very pessimistic picture of the retail environment overall, predicting that “many once famous retailers will shut their doors” in a “Darwinian” environment in which “only the fittest will survive.”

Riggio didn’t name any other retailers, but Borders, which is smaller and under considerable debt pressure (see “Borders Unlikely to be Sold”), is certainly in a much worse position than B&N going into this difficult period.

While the cuts in graphic novel buys for the holidays are deeper than the anticipated sales decline, with reorders expected, their magnitude is staggering, and indicative of a very difficult holiday season for specialty retail chains.

Source: icv2.com