Internet commerce juggernaut eBay is unveiling a brand new iPhone application dubbed Deals today, alongside an upgraded version of its shopping app for the iPhone and iPod Touch platform and an enhanced mobile website. And there’s a good reason for eBay to bolster its mobile offering: the company says its mobile GMV (value of goods sold) via its iPhone app and mobile website (m.ebay.com) is on track to top half a billion dollars by the end of this year.

Impressive number, and that’s not the end of the story. eBay also shared that its mobile GMV is growing at a double-digit rate month-over-month, and that approximately half of its 750,000 unique mobile users per month are situated outside the United States. Another interesting tidbit: eBay says 1 item is purchased every 2 seconds through its mobile offering.

Earlier this year, eBay CEO John Donahoe told a conference audience that the value of goods sold through the eBay iPhone app alone would exceed $400 million, and that an upgraded version of the app was imminent. That updated app should now be available, and it gained a little brother, too.

Version 1.5 of the eBay iPhone application (iTunes link), which the company says has been downloaded 5 million times to date, should now be live on the App Store – in 8 languages and in 77 countries. It boasts a streamlined interface that lets buyers and sellers manage their eBay activity and accounts directly from their iPhone devices, Daily Deal access, social media and e-mail sharing options (new), ‘Buy It Now’ capabilities, push notification alerts (also new) and a more powerful integration with PayPal.

The e-commerce giant is today also debuting a new app, called Deals (iTunes link – US store only), that basically gives iPhone and iPod Touch users a way to access the seemingly never-ending stream of bargains among hundreds of millions eBay listings. The app has built-in integration with social networks like Facebook and Twitter, making it easier for buyers to share their shopping activity with other and even build consensus around deals with their friends. Nice touch: you can shake your device to refresh the deals on display.

eBay has released the new app just in time for its ‘12 Days Of Deals’ program, that will commence this Friday, November 27.

Anyone still believe e-commerce via mobile isn’t worth the effort?

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As previously announced, eBay received approximately $1.9 billion in cash and a note from the buyer in the principal amount of $125 million. The company also retained an approximately 30 percent equity investment in Skype.

The company also purchased senior debt securities with a face value of $50 million as part of a Skype debt financing.

The news of the completion of the sale of the successful Internet communication company comes two weeks after Skype founders Niklas Zennström and Janus Friis announced that they had reached a settlement with eBay in return for a 14% stake and board seats, clearing the way for the deal to close after some very public legal quarrels.

As you may remember, Andreessen Horowitz partner Marc Andreessen swiftly deemed Skype one of the most important companies on the Internet after the settlement was reached and announced (and made quite a strong case for it).

TechCrunch was first to report the imminent sale of Skype to the investor group back in August 2009 and shortly after confirmed that the deal would value the company at $2.75 billion. As a reminder and just for reference, eBay bought Skype in 2005 for $2.6 billion, although eBay has since written Skype down to $1.7 billion.

You won’t hear me say it was the smartest acquisition eBay ever made – not buying the actual core IP was downright idiotic – but they did kinda ok with it in hindsight. Let’s not forget eBay still owns a little less than one third of the new Skype either.

In the words of Skype CEO Josh Silverman: say hello to the future.

How much bigger can Skype get on its own two feet?

(Thanks to @YarinHochman for the tip)

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Earlier this morning, Niklas Zennström and Janus Friis settled their lawsuits with eBay and a syndicate of investors in return for a 14 percent stake in the company they founded. The lawsuits were complicating the spin-off of Skype from eBay because the Skype founders still controlled the service’s underlying peer-to-peer technology.

In an interview with me this morning, Marc Andreessen, one of the investors through his new fund Andreessen Horowitz, told me, “The deal was never held up. The money was in escrow and was going to close” even if the lawsuits weren’t settled. The transaction is on track to close later this quarter. The other investors are Silver Lake Partners and the Canada Pension Plan Investment Board. Index Ventures and Mike Volpi are out of the deal. Josh Silverman will continue to be CEO.

Andreessen is glad that the lawsuits are settled and that the “Joltid IP is now owned by Skype,” but was prepared to litigate if it didn’t work out. He explains: “This was a completely known situation going into it. It was one of the reasons the deal was available, because of the situation. We assumed it would be a good idea to bring the founders on board and resolve all the issues, we are very pro-founder. There was some drama along the way, but we came out with everybody in the same boat rowing in the same direction.”

In addition to legal avenues, Skype also had the option to try to switch to a different technology, such as SIP-based Internet telephony. “Had this not happened,” says Andreessen, “there were various technological paths that could have been followed. Now that it is settled, it is not necessary to make any changes. The technology is scaling very well.”

Skype is on a $740 million revenue run-rate and boasts 521 million users worldwide. “Skype is gigantic and yet still a relatively small percentage of international call volume,” notes Andreesen. “This is, and ought to be, one of the most important companies on the Internet.”

Now that the deal drama is over, we’ll get to find out.

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Index Ventures, a historical investor in Skype, is not going to be part of that buying party after all, and its partner Mike Volpi is definitely out of the picture (no surprises there). Marc Andreessen, partner of Andreessen Horowitz, tells us: “Everything is settled—all lawsuits, all IP. The Joltid IP is now owned by Skype. The company is free and clear to execute to its full potential.”

The original Skype founders, Niklas Zennström and Janus Friis, are now back in the game. The Scandinavian businessmen are getting 14 percent of Skype back for rights to the Global Index P2P technology their company Joltid controls (which is key to the Skype software) – and not 10% like previously reported by other media. In addition, Friis and Zennström gain representation on the board of the new entity. The two men are also putting in a ’significant amount of capital’ of their own in exchange for the stake in the new company, presumably through their Atomico Ventures fund.

Marc Andreessen, General Partner of Andreessen Horowitz, tells us: “Everything is settled—all lawsuits, all IP. The Joltid IP is now owned by Skype. The company is free and clear to execute to its full potential.”

Update: Andreessen shares more of his thoughts on the deal, saying Skype is one of the most important companies on the Internet.

GigaOM first reported that a settlement might have been in the works earlier this month, a report that was later echoed by the NY Times.

Thus ends the legal kerfuffle surrounding eBay’s sale of Skype to the investor consortium (news we broke last August), which it acquired back in September 2005 for $2.6 billion (written down to $1.2 billion in 2007). Friis and Zennström had accused eBay of breaking a licensing deal and sued the investor group last September, claiming damages were growing by $75 million a day.

The newly structured buyout group is now on track to buy approximately 56% of Skype, with eBay continuing to own 30% and the original founders 14%, in a deal valuing Skype at $2.75 billion. EBay is expected to receive approximately $1.9 billion in cash upon the completion of the sale and a note from the buyer in the principal amount of $125 million. The deal is still expected to close in the fourth quarter of 2009.

Withdrawing party Index Ventures released the following statement:

“We are pleased that Skype will now be able to put litigation behind it, and we wish Josh Silverman, his team and the Skype investors well in continuing to grow a great business. Although Skype has the potential to be a great investment, the deal terms changed for Index such that it no longer matches our investment criteria and thus we have decided not to participate in the transaction.”

Meanwhile, the two ruthless European entrepreneurs who founded Skype walk away with a renewed stake, seats on the company’s board and the smile of victory on their faces.

(Top image via E24)

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The old Skype founders will now have a stake in Skype according to unnamed sources. That makes sense. It was what eBay was negotiating with Skype long before the current buyout offer, and the team has to get something in exchange for dropping the intellectual property litigation.

But Index Ventures, the architect of the deal, is apparently out. For Silverlake Partners and Andreeseen Horowitz to agree to that either means there’s too much money involved for anyone to be worried about business loyalties, or there’s enough of a smoking gun that Index had no choice but to get away from the deal and all that liability.

Whatever the truth, everyone is in for a wild ride. Nobody who does business with the Skype founders ever seems to come out of it happy. Maybe Marc Andreessen has the patience to change all that this time around.

Just one problem, though. No one has ever described Marc Andreessen as a patient man.

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According to eBay CEO John Donahoe, shoppers have already spent about $400 million on the popular commerce site using the company’s free iPhone application.

The number pales in comparison with eBay’s total sales figure ($59.7 billion last year), but it’s fairly significant considering the fact that the iPhone has a relatively small market share – about 15% of the smartphone segment – and mobile payment transactions are still new to many. Who would have predicted around half a billion dollar in sales a year would be recorded through the eBay iPhone app when it debuted on the App Store last year?

According to this report by the Financial Times, some wealthy people have used the mobile app to buy a Lamborghini, a Bentley and a $150,000 boat. And if Mobile Marketer heard Donahoe right when he talked numbers at a summit in Las Vegas, the Lamborghini went for $350,000. Talk about being at ease with making purchases from mobile devices.

Most likely, these are the high-profile exceptions to the rule and most people use the app to buy books, clothing and electronics much like regular eBay shoppers do. In total, approximately 4.6 million iPhone owners have downloaded and installed the app to date.

Donahoe also said eBay will soon be introducing the next version of the app with improved functionality and features.

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Even though it is embroiled in a nasty legal battle with its founders over its future, Skype continues to rack up impressive numbers. In today’s third quarter earnings from eBay (which still owns Skype, but is preparing to unload it), the company breaks out Skype’s performance (see slide above).

Skype’s registered users grew 41 percent to 521 million people. That’s a stunning 40 million new registered users in the past three months. Revenues grew 29 percent to $185 million. Free Skype-to-Skype minutes grew 74 percent to 27.7 billion minutes, whereas SkypeOut minutes (which is what members pay for) grew 44 percent to 3.1 billion minutes.

All of those SkypeOut calls translated to a healthy $185 million in revenues, up 29 percent from a year ago. If it keeps up at this pace, it should easily be able to exceed its $1 billion annual revenue goal by 2011.

Skype was one of the few bright spots in eBay’s earnings, along with Paypal, which brought in $688 million in revenues (up 15 percent). eBay’s bread-and-butter marketplaces business was down 1 percent to $1.365 billion.

eBay Q309EarningsSlides FINAL

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Probably the reason it prompted such sideways looks, however, is that this is not a classic ‘web app’ startup, but an e-commerce hub. Vente Privee began in France in 2001, but has only recently become a powerhouse of the new wave in Europe: an online private sales club involving designer fashion brands, otherwise known in the fashion retail industry as the “overstock market”. Its success has lead to a bunch of clone sites, while Vente Privee itself is on target to hit €650m in turnonver globally this year. In other words Europe is not out to lunch – as Arrington put it – it is out to shop.

But Vente Privee’s success has now lead to a number of U.S. companies becoming very interested in either entering this world or expanding their operations. TechCrunch Europe thus understands, from some very well placed sources, that Gilt, Amazon and eBay are all actively looking at acquisitions in the European private shopping club space. The price for Vente Privee alone is being talked about in terms of a $1.5 billion sale. Some sources even put the figure at between $2 billion and $4 billion.

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Negotiations continue, say multiple sources, between eBay, the new proposed Skype owner group, and the original founders Janus Friis and Niklas Zennstrom, via their company Joltd, in what is turning into a very high stakes and very emotional game of poker.

Joltid first sued eBay/Skype in July 2009, claiming breach of a license agreement that granted Skype the use of key technology.

Multiple sources have confirmed to us that settlement negotiations were underway with Joltid to give the company a percentage of Skype to drop the litigation. Joltid was to receive “between 5% and 15% of Skype” to settle.

But the announcement of an agreement to sell most of Skype to a new investor group scuttled the settlement, say our sources, because of the massive debt that the company would be burdened with following the closing. Part of the purchase price for Skype is lender financed, and the debt would be on Skype’s books.

The breakdown in negotiations led to the second Joltid lawsuit. Our sources say that a settlement should be possible, but that emotions are keeping the parties apart. “We’re talking about some very rich, very emotionally immature people here. On both sides of the table. It’s not about money, it’s about saving face.” The fact that so much of the conflict is playing out in the press is evidence of this as well.

There’s another odd issue here as well. In the first lawsuit, Joltid claimed that Skype misused Joltid source code: “In particular, Joltid has alleged that Skype should not possess, use or modify certain software source code and that, by doing so, and by disclosing such code in certain U.S. patent cases pursuant to orders from U.S. courts, Skype has breached the license agreement.”

But the second lawsuit by Joltid claims that Skype never had the source code to begin with. The lawsuit’s goal is to prevent them from getting it. From the lawsuit: “An executable-only object code form of the GI Software was licensed by Joltid to Skype, a well-known Internet-based company that provides users throughout the world with free or low-cost telephone services over the Internet. Skype did not obtain a license to the GI Software source code, however, and the license it did obtain was terminated based on Skype’s breaches of the license agreement.”

Our sources say that Skype does indeed have the GI software source code, although it isn’t clear if they have a right to it or not. The key issue seems to be that they modified that software and disclosed it to third parties.

Skype has long been attempting to rewrite their P2P engine so that they wouldn’t have to rely on that Joltid code, we’ve heard from former employees, but they’ve been unsuccessful to date. Skype can move away from P2P to a purely SIP based infrastructure, but bandwidth costs would skyrocket. Skype is supposedly 7% of all international long distance minutes today, mostly from Skype to Skype calls that use the P2P backend. Paying bandwidth charges on those calls isn’t attractive, and Skype appears to be unable to develop a P2P based SIP infrastructure that performs well.

Game theory suggests that the multiple parties would work the situation out. Shutting down Skype just doesn’t make sense. But as we said, emotions are running hot right now, and now no one seems to want to back down.

The buyers group has certain protections from the litigation in their purchase agreement. Specifically, they don’t have to close the deal if there are injunctions around the lawsuit (meaning Joltid wins). And if the transaction closes, eBay is on the hook for 50% of any damages.

The likely outcome of all of this remains the same – Joltid will get a stake of some size in Skype. But given the players involved, anything could still happen.

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Acacia Research’s subisidiaries are in the business (PDF) of acquiring, developing, licensing and enforcing patents, according to its website.

One of those subsidiaries, Peer Communications, filed the patent case in August 2006 in U.S. District Court for the Eastern District of Texas. The court ruled in favor of Skype and eBay swiftly, but the case then went on to the U.S. Court of Appeals for the Federal Circuit, which has now affirmed the lower court’s decision.

The two patents are somewhat related, to be fair. They deal with “a uniform user interface for network access that can enable a network agent to access multiple discrete network services,” according to court filing documents. The technology contributes to a system that allows groups of loosely interconnected agents to communicate contemporaneously without intermediaries such as a servers and to exchange data. A quick Web search reveals that the actual patent holder is most likely Miami-based Sociocybernetics, which has held such a patent in the U.S. since November 2005.

It’s a small victory for Skype/eBay, who is neck deep in far more serious litigation than this patent case. More on that later.

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Sometimes all you need is a map to see where a company is going, or where it got on the wrong track. Take a look at the eBay acquisitions above plotted as a subway map created by the folks at MeetTheBoss. Click on it for a larger, clearer map. (They also did the same thing for Amazon acquisitions).

The map is color-coded, with different subway lines representing different categories of acquisitions.  As long as eBay sticks to central lines close to its main business, its acquisitions have done pretty well.  For instance, the yellow line is online auctions (iBazaar, Internet Auction Co., GMarket), orange is retail (Half.com, Shopping.com), and violet is e-commerce (PayPal, Bill Me Later, StubHub).

It’s when eBay has veered off far away from its core business that it’s gotten into trouble.  You can see that here by the darker orange VOIP line (Skype), the red Social line (StumbleUpon), and brown Auction House line (remember Butterfield & Butterfield?).  Even the pink Classifieds line has been a mixed bag.  eBay’s investment in Craigslist certainly didn’t help it much, and it is still struggling to make a splash in the U.S.

Fortunately, eBay’s current management is getting back on the right track by selling Skype and getting rid of distractions such as StumbleUpon.

(Hat tip to reader Ciaran Duffy).

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I’m not going to argue with the fact that eBay was negligent in buying a company without taking control of its core intellectual property. But when I look at this deal, and how the market has changed in the last four years, it looks to me like eBay made out ok. Or even more than ok.

First of all, eBay never paid the full $4.1 billion for skype. 2/3 of a $1.5 billion earnout wasn’t paid, so the total purchase price was around $3.1 billion. After the write-downs, eBay was carrying Skype on its books at a value below $2 billion dollars.

Skype is projected to make $200 million of so in EBITDA in 2010, so today’s acquisition implies a 14x multiple on that EBITDA (thanks to Mark Mahaney at Citi Investment Research for the quick financial analysis). Mahaney says “From a non-strategic buyer, that would seem to be a high multiple.” Clearly, ebay got more for Skype than they thought they would.

Also, the market (and eBay) hasn’t done too well over the last few years. Half of the original purchase price was paid in eBay stock, which has declined by more than 50% since late 2005.

Finally, Skype has been profitable, and eBay has taken those profits off the table. Skype was likely breakeven in 2006, says Mahaney. But he estimates they generated $44 million in cash flow in 2007, $116 million in 2008 and projected $164 million in 2009. That’s $324 million eBay has taken off the table in aggregate.

The market is way, way down and Skype is a somewhat damaged asset with the IP litigation ongoing. The fact that eBay is getting most of its purchase price back, in cash, is a big win for them. And they still own 35% of the company and can get additional gains in a later IPO or sale. And the best news is that Skype is finally free of the dragging effect of a huge corporate parent. They can now move forward and find their destiny.

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The acquiring party is indeed an investor group led by private equity firm Silver Lake Partners, who likely paid the bulk of the amount Skype was sold for.

Other investors include VC firms Andreessen Horowitz and Index Ventures (a previous investor in Skype), as well as the Canada Pension Plan (CPP) Investment Board.

The new investors will buy approximately 65% of Skype, with eBay continuing to own 35%, in a deal valuing Skype at $2.75 billion US. eBay is expected to receive approximately $1.9 billion in cash upon the completion of the sale and a note from the buyer in the principal amount of $125 million. The transaction, which is not subject to a financing condition, is expected to close in the fourth quarter of 2009.

Worth noting: Andreessen Horowitz partner Marc Andreessen sits on the eBay Board of Directors.

Ebay had reportedly been looking to sell Skype for $2 billion, compared to the $3.1 billion it put on the table to buy out the company and pay out its founders Niklas Zennstrom and Janus Friis back in 2005. Since then, eBay has written down nearly a billion dollars of the deal value after realizing the supposed synergies weren’t going to pan out as planned. Skype is said to be making approximately $600 million a year in revenues, so it seems like the investor group acquired the company at a very reasonable price.

Earlier this year, eBay had announced that they would be spinning off the company in an IPO in 2010. As Michael noted when he broke the news about the impending deal that was confirmed today, these announcements are often made to generate acquisition offers from potential suitors. If Skype will ultimately be floated on the stock market in the near future remains to be seen.

Full release is below, and bares no mention about the litigation currently at hand between eBay and its initials founders over key Skype technology.

Full press release:

eBay Inc. (NASDAQ:EBAY) today announced it has signed a definitive agreement to sell its Skype communications unit in a deal valuing the business at $2.75 billion. The buyer, who will control an approximately 65 percent stake, is an investor group led by Silver Lake and includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board. eBay is expected to receive approximately $1.9 billion in cash upon the completion of the sale and a note from the buyer in the principal amount of $125 million. The company will retain an approximately 35 percent equity investment in Skype. The transaction, which is not subject to a financing condition, is expected to close in the fourth quarter of 2009.

“This is a great deal, unlocking both immediate and long-term value for eBay and tremendous potential for Skype,” said eBay Inc. President and CEO John Donahoe. “We’ve acted decisively on a deal that delivers a high valuation, gives us significant cash up-front and lets us retain a meaningful minority stake with talented partners. Skype is a strong standalone business, but it does not have synergies with our e-commerce and online payments businesses. As a separate company, we believe that Skype will have the focus required to compete effectively in online voice and video communications and accelerate its growth momentum.”

Commenting on the deal, Egon Durban, managing director at Silver Lake, said: “Skype is an innovative, next-generation company that has changed how people and businesses communicate with each other. This transaction benefits all parties involved and will allow Skype the opportunity to accelerate the growth of its business by harnessing the deep technological and company development expertise that resides within the investor group. Josh Silverman has done a strong job leading the company and we look forward to working with Josh and his team to grow the Skype franchise.”

In April 2009, eBay announced plans to separate Skype from the company, beginning with an IPO in 2010. The decision followed a year-long review of Skype within eBay’s portfolio. As it prepared for an IPO, the company said it would naturally consider bids for Skype that offered an attractive valuation. Donahoe said the deal offered by the investor group achieved that.

“This deal achieves our goal of delivering short- and long-term value to eBay and its stockholders, without the possible delays and market risk of an IPO,” Donahoe said. “Selling Skype now at this great valuation, while retaining an equity stake, makes sense for the company. And it allows us to focus all of our energies on the opportunities in front of PayPal and eBay.”

Acquired by eBay in 2005, Skype has strengthened considerably since early 2008 when Donahoe was named eBay’s CEO and tapped company executive Josh Silverman to lead Skype. Silverman has driven strong momentum while building a new management team and delivering a series of Skype innovations such as software upgrades with dramatically improved video and calling quality, the widely popular Skype iPhone app and mobile partnerships with companies such as Nokia and Hutchison. In 2008, Skype generated revenues of $551 million, a 44 percent increase compared to 2007. Total eBay Inc. revenues for 2008 were $8.5 billion. Registered Skype users reached 405 million by the end of 2008, a 47 percent increase from 2007. Skype is attracting hundreds of thousands of new users each week.

(Image via E24)

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As we reported, Index Ventures is also participating in the acquisition. And the unnamed private equity firm is apparently Silver Lake Partners, who is likely supplying the bulk of the capital needed to pay the $2 billion price tag.

eBay announced earlier this year that they would be spinning off the company in an initial public offering in 2010. These announcements are often made to generate acquisition offers from potential suitors.

The Andreeseen Horowitz fund can make single commitments of up to $50 million.

It isn’t clear if current Skype CEO Josh Silverman would continue to lead the company after any acquisition. Sources we’ve spoken with have said he is generally well thought of both within Skype/eBay as well as the possible investors.

More from our post last week:

Skype, under Silverman, grew revenue to $551 million last year, and eBay has said it expects the company to top $1 billion in revenue in 2011.

Presumably, the investor group, if successful in acquiring Skype, would run it privately and eventually prepare it for an initial public offering.

Skype founders Niklas Zennstrom and Janus Friis, were also reportedly in talks with several private equity firms earlier this year to make a bid for the company.

Recent news that Skype is now in litigation with a company controlled by those founders over key Skype technology only complicates the picture further.

eBay acquired Skype in 2005 for $4.1 billion, although about $1 billion of that, an earnout, was never paid.

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Investors in the proposed purchase may include newly-formed Andreesen Horowitz, Index Ventures (who were early investors in Skype before the ebay acquisition), and one or more multi-billion dollar private equity firms.

eBay, which announced earlier this year that they would be spinning off the company in an initial public offering in 2010, is said to be looking for $2 billion or more for Skype. Companies quite often talk about IPOs (and even actually file) to generate acquisition buzz.

The Andreeseen Horowitz fund can make single commitments of up to $50 million, so it’s clear a large private equity fund (or two) would need to be involved in the deal as well.

It isn’t clear if current Skype CEO Josh Silverman would continue to lead the company after any acquisition. Sources we’ve spoken with have said he is generally well thought of both within Skype/eBay as well as the possible investors.

Skype, under Silverman, grew revenue to $551 million last year, and eBay has said it expects the company to top $1 billion in revenue in 2011.

Presumably, the investor group, if successful in acquiring Skype, would run it privately and eventually prepare it for an initial public offering.

Skype founders Niklas Zennstrom and Janus Friis, were also reportedly in talks with several private equity firms earlier this year to make a bid for the company.

Recent news that Skype is now in litigation with a company controlled by those founders over key Skype technology only complicates the picture further.

eBay acquired Skype in 2005 for $4.1 billion, although about $1 billion of that, an earnout, was never paid.

Update: Confirmation of the deal.

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The global rise of Facebook is nothing less than astounding. In the month of June alone it gained 24 million unique visitors worldwide, compared to the month before, for a total of 340 million unique visitors worldwide.  It is now the fourth largest site in the world, trailing only Google, Microsoft, and Yahoo sites, according to comScore (see table below). Facebook itself only officially acknowledges 250 million active registered users (but you don’t have to be a registered user to visit some Facebook pages).

In the past year, it has grown 157 percent, gaining 208 million visitors.  It long ago passed its rival MySpace on a global basis, way back in April, 2008. Since then, it has passing even bigger sites on its way up. In the chart above, the blue line is Facebook. It passed Amazon back in August, 2008. eBay fell by the wayside in January, 2009. It surged past AOL sometime in February, 2009, and just last month it finally passed the Wikimedia Foundation sites (which includes Wikipedia).

So there it stands at No. 4. It will be a while, if ever, before it catches up to the three world leaders: Google, Microsoft, and Yahoo. They each have between 240 million and 500 million more monthly global unique visitors than Facebook (see chart below). But it’s always good for a company to have stretch goals.

Worldwide unique visitors (June, 2009).  Source: comScore

1. Google Sites: 844 million
2. Microsoft Sites: 691 million
3. Yahoo! Sites: 581 million
4. Facebook: 340 million
5. Wikimedia Foundation sites: 303 million
6. AOL: 280 million
7. eBay: 233 million
8. CBS Interactive: 186 million
9. Amazon: 183 million
10. Ask Network: 174 million

In the U.S., Facebook had 77 million unique visitors in the month of June, making it the sixth largest site in the U.S. (after Google, Yahoo, Microsoft, AOL and all Fox Interactive Media sites combined).

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eBay is developing new peer-to-peer software to run the Skype service, they revealed in a quarterly SEC statement.

The existing peer-to-peer software is controlled by Joltid, a company controlled by Skype’s founders Zennstrom and Janus Friis. The software was not acquired by eBay in its 2005 acquisition of the Skype service and is now the subject of litigation in the UK.

eBay is developing the new software in the event they lose the right to continue to license that technology, but warns that “such software development may not be successful, may result in loss of functionality or customers even if successful, and will in any event be expensive.”

This comes as eBay prepares to spin off Skype as in independent public company. And the service is surging in popularity, with 480 million registered users and $170 million in quarterly revenue.

The case isn’t scheduled for trial until June 2010. Don’t expect an IPO before that, unless a settlement is reached quickly.

From the 10Q:

Skype licenses peer-to-peer communication technology from Joltid Limited pursuant to a license agreement between the parties. The parties had been discussing a dispute over the license. In March 2009, Skype Technologies S.A. filed a claim in the English High Court of Justice (No. HC09C00756) against Joltid Limited. Following the filing of the claim, Joltid purported to terminate the license agreement between the parties. In particular, Joltid has alleged that Skype should not possess, use or modify certain software source code and that, by doing so, and by disclosing such code in certain U.S. patent cases pursuant to orders from U.S. courts, Skype has breached the license agreement. Joltid has brought a counterclaim alleging that Skype has repudiated the license agreement, infringed Joltid’s copyright and misused confidential information. On the basis of, among other things, the parties’ mutual dealings since the execution of the license agreement, Skype asked the English High Court for declaratory relief, including findings that Skype is not in breach of the license agreement, that Joltid’s notice of breach and subsequent notice of termination are invalid, and that Joltid has certain indemnity obligations in relation to the U.S. patent proceedings. Trial is currently scheduled for June 2010. Although Skype is confident of its legal position, as with any litigation, there is the possibility of an adverse result if the matter is not resolved through negotiation. Skype has begun to develop alternative software to that licensed through Joltid. However, such software development may not be successful, may result in loss of functionality or customers even if successful, and will in any event be expensive. If Skype was to lose the right to use the Joltid software as the result of the litigation, and if alternative software was not available, Skype would be severely and adversely affected and the continued operation of Skype’s business as currently conducted would likely not be possible.

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Accountants are quick to point out the watchdogs can’t actually use any of the public status updates, photos and videos from users as proof in case of a dispute, but apparently your lifestyle as you depict it online can prompt an investigation when it doesn’t seem to add up to what your official income is.

The local version of the IRS, the BBI, has already admitted that it actively tracks activity from citizens online to sniff out tax avoiders. To quote director Karel Anthonissen: “It’s technically possible, it’s legal, and it’s happening.”

Just in case they read blogs too: I’m getting paid to write this article and I will make sure to report the income, mr. Anthonissen! Now if you’ll excuse me, I need to jump in my Maserati and drive to our second house on the coast.

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And now Skype is being downright disintegrated from eBay’s services, starting with the UK website. This is what the dry announcement message reads (emphasis ours):

eBay is discontinuing Skype voice and chat buttons in listings as of 10th June 2009 in an effort to remove features with limited buyer and seller usage.

This change does not require any action on your part. We are just notifying you that as of June 10, you will no longer see the Skype voice and chat options when you list new items, they will not be included on the new item page, and they will no longer appear in your existing listings.

We appreciate your continued commitment to good communications with your customers.

Regards,
The eBay Team

This comes as little of a surprise now, but I couldn’t help looking up former eBay CEO Meg Whitman’s words when the acquisition news – the company acquired Skype for roughly $2.6 billion ($1.3 billion in cash and the value of 32.4 million shares of eBay stock) back in September 2005 – hit the wire:

“Communications is at the heart of e-commerce and community. By combining the two leading e-commerce franchises, eBay and PayPal, with the leader in internet voice communications, we will create an extraordinarily powerful environment for business on the net.”

Could have happened, hasn’t happened. It’s just the way things go.

(Thanks to Daryl Griffiths for the tip)

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Editor’s note: This is a guest post by Keith Rabois, vice president of strategy and business development for Slide, the social entertainment company. Prior to Slide, Keith was a VP at LinkedIn and an EVP at PayPal in charge of among other things, competitive strategy vis-à-vis eBay. He also worked at eBay for three weeks following its acquisition of PayPal. Keith currently serves on the Board of Directors of Yelp, Vendio, Xoom and FanIQ.

On Monday afternoon, I was speaking on a panel at the Social Graph Symposium when the moderator asked me what eBay could do to revitalize its marketplace by leveraging the social graph. Dave McClure, like many pundits, presumes the social graph could be a great boost for eBay, if not an outright panacea. I replied, “nothing.”

It’s actually the social graph and similar products that have placed a stake in eBay.com. Most often, people blame eBay’s decay on factors like the weakening economy, the rise of Amazon, as well as eBay’s own inefficient search functionality. But the real and simple reason is eBay is no longer fun. Over the years, it has lost online ground and eyeballs to pure entertainment destinations such as YouTube and social networking sites like MySpace and Facebook.

Do It eBay

Although it was always classified as an e-commerce destination, the quirkiness of the eBay marketplace was once a major source of entertainment on the Web. It was where people sought and bought everything from the first broken laser pointer to Beanie Babies to Bob Dylan’s boyhood home. While the catch—anything from an antique clock to a Gulfstream II—was rewarding for the buyer, it was generally the entertainment and excitement of the chase that brought a buyer to eBay in the first place.

When eBay launched its first U.S. advertising campaign in 2000, eBay spokesman Kevin Pursglove stated, “We hope they [the ads] reflect the fun that people have when they come to our site.” According to USA Today, “the fun aspect of eBay seems to have struck a chord with consumers.” At that time, eBay was downright addictive and when you won an auction, it was thrilling. That delight kept people coming back for more, whether or not they actually prevailed with their bids.

Almost half the U.S. Internet population

Let’s rewind to 2004, just a short five years ago. In January 2004, almost 50 percent of the entire U.S. Internet population visited eBay each month. If people were bored at work, chances are they were surfing the pages of eBay and unearthing eccentric auction items they never even knew existed. This was the height of the eBay heyday.

So what happened?

With the fun factor driving eBay usage, what really stole eBay’s limelight was the rise of social networking sites such as MySpace and Facebook and the likes of YouTube. In December 2006, almost half of the U.S. Internet population was still visiting eBay. But when you examine the total amount of time spent online, 11.9 percent was spent on MySpace versus 3.7 percent on eBay (according to Compete.com). By then, people were already devoting more of their online time to pimping out their MySpace profiles or snacking on YouTube’s videos.

To add further insult to injury, in early 2007, Facebook opened up its platform and ushered in a flood of new applications. The result was the introduction of even more entertainment options to consume your online hours. People began to swap the enjoyment of serendipitously discovering knick-knacks on eBay for watching people run into trees on YouTube or SuperPoking friends on Facebook. The eBay addiction was replaced with other, more entertaining addictions.

eBay strips out the fun

This was not lost on all of eBay. As early as 2006, several executives championed an internal effort dubbed “eBay 3.0.” The new vision for eBay was to resurrect the “fun” of auctions. An ad campaign labeled “Windorphins” was meant to remind consumers of the endorphin rush experienced when winning an auction. The purchase of StumbleUpon even had a rationale in this model. The ideals fueling eBay 3.0 eventually fizzled.

By the time John Donahoe took the helm of eBay in Q1 2008, he opted to “aggressively change our product, our customer approach and our business model.” In a futile effort to compete with Amazon and Google, eBay leadership essentially stripped whatever remaining fun existed out of its marketplace. In December 2008, eBay’s visitors accounted for only 1.5 percent of total minutes spent online (according to comScore Media Metrix). The leader board for top online properties showed Google, home of YouTube.com, and Fox Interactive Media, which includes MySpace.com, in the top five. EBay ranked sixth in total unique visitors, but was also the only property on the top 10 list to see a decline from 2007.

Where did all the fun go?

Ironically, at one point right after it bought PayPal, eBay had the leading actors of most of this entertainment revolution sitting in its offices. Chad Hurley and Steve Chen of YouTube fame, Peter Thiel (Facebook), Jeremy Stoppelman (Yelp), Max Levchin (Slide), David Sacks (Geni and Yammer), Reid Hoffman (LinkedIn, board member of Zynga) and others, myself included, were all too alienated by eBay’s bureaucratic and political MBA culture. So we decided to create our own fun elsewhere instead.

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This is fantastic news for counterfeiters, who can now keep on duping customers into buying fake L’Oreal cosmetics through the popular web service.

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In 1999 eBay was under heavy fire for allowing the sale of Nazi memorabilia. Their policy approach at the time mirrors almost exactly what Facebook is doing now with Holocaust denial groups, namely banning behavior in certain countries to comply with local laws, but allowing it everywhere else.

From a 1999 New York Times article: “eBay…said that the company already prohibited the sale of such items in Germany because they are outlawed there. But he said it generally polices the sales of banned items only after receiving complaints from users”

From a PCMag article in May 2009 on Facebook: “We have recently begun to block content by IP in countries where that content is illegal, including Nazi-related and Holocaust denial content in certain European countries,” the Facebook spokesman said. “The groups in question have been blocked in the appropriate countries.”

By 2001, though, eBay had changed its policies to ban all sales of Nazi memorabilia across its sites. The ban includes sales of Holocaust denial items. The current policy is here.

Part of the balancing act eBay uses when making a decision on a listing is to ban items which “lack substantial social, artistic, or political value.” It goes on to state “this includes items that may be deemed inappropriate or insensitive to victims of natural disasters or human tragedies.”

Facebook doesn’t want to be the last reasonable entity standing on the wrong side of the Holocaust denial issue. But it’s sure looking like that’s how this is going to play out.

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Editor’s note: The guest post below was written by Brian Lawe, CEO and Founder of MyStoreCredit. Brian’s company develops e-commerce tools around payments, cross-promotion and customer mapping. He’s been watching Twitter for some time.

The rumors are ripe that Apple, Microsoft, Google and News Corp are all sniffing around Twitter – but no one has mentioned the best fit: Amazon. If Amazon doesn’t jump into the arena, someone at Twitter ought to make a call to Jeff Bezos. Neither Amazon nor Twitter should miss the powerful synergies from merging the two companies. To wit:

1. Introducing Twitter Payments: Amazon has been struggling to gain traction with its payments platform. They will never unseat or even threaten PayPal until they come up with a unique and differentiated strategy. The world does not need yet another payment option. But Twitter is something new and does offer a smart strategy. By rewarding Twitter users for associating their Twitter accounts with their Amazon account, Amazon can instantly create a new, potentially dominating powerhouse in payments for mobile and online transactions.
2. Using Twitter as the base, builds on PayPal’s model of making payments easy by letting users pay just by entering their Twitter ID – which would be the same as their Amazon Payments ID. If Amazon Payments can seize this deal and execute a launch of “Twitter Payments,” the net result could make Amazon/Twitter Payments a real threat to PayPal and a real payments choice for users.
3. One of the least-understood benefits of tightly tying PayPal to eBay transactions is the resulting free promotion PayPal gets being front-and-center in all eBay transactions. Visa or Mastercard would have to pay millions and millions to get that kind of preferred-positioning in a transaction. By linking Amazon Payments to Twitter accounts – Amazon could get the same preferred position for ALL mobile payments – all at no cost. Smart money puts PayPal’s current valuation at $8-12 billion. Not a bad return if Amazon bought Twitter for $700 million.
4. PS: While Google has a payments platform – it is structurally different from Amazon Payments and it would not benefit from the same synergies with Twitter. Google’s payment service is more like a credit card consolidation service vs. a true payments platform.
5. Amazon’s recommendation engine is suited for 140 characters: Twitter has an albatross: No obvious business model has emerged for Twitter and none seems evident to justify a $100 million (let alone $700 million) valuation. Google has taught the world that over-paying for a hot media property (Youtube) solely based on “users” is a dumb move. Hulu took some time in coming on, but it proves the case that any hot new media isn’t immune to competition forever. Which means Twitter will have to offer a sustainable business model to pay-back its buyer. Which brings us to Amazon’s unique ability to capitalize on Twitter’s highly restricted media medium.
6. What could any advertiser possibly do with a service that constrains itself to only 140 characters? Unless you are a copy-writer, you can’t comprehend how difficult it is to promote something in just 140 characters!
7. Enter Amazon’s recommendation engine. Tweet “Amazon’s recommendations 4 u:” and you still have 111 characters to describe a book, movie, song, toy or any other item sold on Amazon. The 140 characters alone are highly constraining. In this case, the medium is most definitely not the message. The message has to be the message. And the message has to be extremely targeted.
8. You can’t target a 140 character message unless you know a whole hell of a lot about the recipient. Amazon alone is the best player to use its database of shopping history to create highly targeted 140 character messages to Twitter users. Imagine if Amazon offered a $5.00 coupon to any Amazon buyer who registers their Twitter account on Amazon? Once the two are linked—game over.
9. My thinking assumes ultimately someone will have to pay the piper for the “free” twitter service and twitter-approved ads make the best sense.  If that is ultimately true and an ad-driven model emerges, then the restriction of the 140 characters is a huge constraint which can only be overcome with highly-effective cross-merchandising (which only Amazon does effectively at scale).
10. Among the current named suitors, only Apple is also similarly situated to utilize the character limitation to highly cross-promote. But what can it cross-promote? Songs? An average song is only $0.99. Compare this low price item to Amazon’s ability to promote any product at any time. Amazon can use the same 140 characters to promote $5, $50 or $500 items. Think of it this way: If Apple was equally successful at cross-promoting a $0.99 song as Amazon might be at cross-promoting a child’s toy for $50 – the profit value Amazon would capture in the same promotion and for the same tweet would be 10-50x better than what Apple could capture.
11. Amazon could best control the brand marketing experience: Twitter users are not going to sit by passively letting a new owner test formats forever. If they feel spammed, they’ll turn and run from Twitter. There is risk that any new owner could destroy the Twitter brand by over-testing or probing for a promotion model to make a Twitter acquisition pay off. But Amazon has a core-strength in doing this. Amazon is renowned for its ability to test creative and GUI’s and measuring sales results. Top that off with Amazon’s “one-click” to buy patent — and you just made mobile buying as easy and comfortable as apple pie.
12. Amazon needs to take some risks.  Amazon’s recent results relative to its arch-rival eBay are impressive. One lesson Amazon can take from eBay’s missteps is the need to invest in new ideas before your existing model begins to gentrify. Clearly, mobile and social are two huge areas where Amazon should be looking to play. Twitter gets them into both games. Amazon does run the risk, as eBay did with Skype, of choosing the wrong horse to ride. But given the threat of losing Twitter to other players who will then control promotion and marketing access to mobile users, this is one bet Amazon ought to take today.

Twitter needs a revenue model. Like democracy, the one I propose is the worst—except for all others. I wish the Twitter folks all the best in their decisions in the days ahead. But if Amazon doesn’t step-up to the plate now—and with a very big bat—they will have missed one hell of an opportunity.

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New investors Sherpalo Ventures, Accel Partners, and August Capital joined StumbleUpon founders Garrett Camp and Geoff Smith in purchasing the company back from eBay. Outside investors put in 85% or so of the $29 million, we’ve been told, with Camp and Smith making up the rest.

eBay was paid $25 million in cash for StumbleUpon and retains a 10% interest in the spun off entity. $4 million remains in the company to fund operations.

StumbleUpon’s revenues are estimated at $5 million – $10 million annually.

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