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March 27, 2006

Skype Founders Getting Skyped by Morpheus!

posted by MR WAVETHEORY at 3/27/2006 03:37:00 PM
The founders of Skype always seem to be getting into trouble. They are a magnet for trouble. Or are they just trouble itself?

This time, Nikklaus and Janis are getting sued by Mike Weiss of Streamcast. The story of Skype is incredible. Mike hired the dynamic duo to build Streamcast's Morpheus client - which they did. Mike launched the product. It became an instant hit reaching over 20 million uniques in several months. And that's when the plot thickened. The two miscreants had built a backdoor into Morpheus without telling Mike. (A backdoor is a secret way of controlling a piece of software.)

Not content to see Mike's success and their meager consulting fee for all that work, the duo used the backdoor to disable Morpheus and shut it down - on over 20 million desktops - overnight. Yes. Overnight! What a plot? Huh? It gets better.

So Mike's overnight success was shutdown overnight. To add insult to injury, Nikklaus and Janis launched Kazaa and they updated the entire based of Morpheus users into Kazaa users. The rest as they say is history. The duo sells Kazaa to Sharman Networks, use the P2P technology they developed to launch Skype and sell it (or unload the legal liability) upon eBay for a cool $2 billion.

Someone should make a movie of this story.

Mr Wave Theory

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Anonymous marc freedman said...

A lawsuit target with deep pockets like eBay is a slam dunk for Michael Weiss ... assuming the suit has some merit. Not that that's required. Another motivation - Streamcast has been seeking its next round of funding for a legal P2P network. Perhaps the VC reception was so chilly it forced Streamcast to make this desperate play.

Given that Streamcast will settle with RIAA, the $2 billion question is how much of the eBay settlement does RIAA get?

Now let's go full circle. Tie this into the rumored eBay Music Store. That's expensive music. Thousand dollar songs, anyone?


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