Skype's Evil Ways, Continued | Hacker News Reader

Skype's Evil Ways, Continued

blogs.reuters.com

59 pointsalanthonyc23 comments

Silver Lake and Andreessen Horowitz have shot their reputations to hell and gone: they will have increased difficulty in finding deals and the companies they fund will have harder times finding staff. Live by the sword, die by the sword.

Silver Lake won't care. PE firms are used to being called locusts, pump and dump schemers, or worse, and they don't need to be liked to do what they do.

Andreessen Horowitz will, though, not be happy about what happens to their reputation in Silicon Valley.

A.H. will probably just blame it all on Silver Lake - I believe A.H. was quite the minority shareholder anyways.

Even so, when tech companies are hiring, one of the things they do is trot out the list of investors to establish their credibility.

The salient question is whether potential hires will (a) Forget all about this, (b) Remember it and blame Silver Lake, or (c) remember it vaguely and think A.H. was involved?

I have no idea what the outcome will be, but I'm guessing that (b) is way less likely than (a) or (c).

As a founder I disagree. The decision for or against a VC is not made by employees and if anything a16z protected the interests of major shareholders over job hopping opportunists and non-performing executives. I would expect savvy employees to negotiate their compensation related agreements more carefully when these firms are involved in the future, however.

Aren't they busy destroying Skype's value? Who is going to want to work for Skype now, and how are they going to find talent?

Once the deal goes through, they will be Microsoft employees. Until then, certainly this will hurt their image, but I doubt that no one would work for Skype (of course, I wouldn't).

> Once the deal goes through, they will be Microsoft employees

My two cents: Microsoft is known for being unethical with its competitors, but never with its employees. Right now, Microsoft is in a position it can take a stand for what's right and refuse to complete the acquisition unless Skype aligns its HR policies with the company making the acquisition.

Microsoft is not paying 8.5B for the code. They are buying the Skype brand and the loyalty of its customers (at least the ones running Windows). What Skype is doing - and that's something that's hitting mainstream press soon - will damage the brand - and possibly customer loyalty - irreparably.

And, by provoking a diaspora of the talented people, they are creating dozens of competitors.

I completely agree, but I wouldn't assume that Microsoft isn't doing anything behind the scenes. When you are dealing with an issue that is generating bad press like this but your company isn't the cause (i.e. Microsoft) but it has the potential to hurt you, it doesn't always serve you to deal with it publicly. Microsoft's name isn't currently tied to the bad press, so it's in their best interest to work behind the scenes to do damage control without linking their name in the public's mind with the unethical dealings of Skype and Silver Lake.

This is a matter to be dealt with publicly. What is being perceived is that Microsoft, at best, doesn't really care for the Skype folks. The worst that can be read into its silence is that they favor it because they never had the intention to keep the team and this spares them some bad press.

If Microsoft does nothing, that's because they prefer Skype to continue its behavior because Microsoft perceives it increases the value of the assets being purchased.

Microsoft has a long history of being very unethical with its own employees. Look up permatemp and Vizcaino v. Microsoft.

Wow. I have heard the term "permatemp" before, but it seemed more like incompetence than malice.

Would be interesting in a cold hearted intellectual sort of way to calculate just how much the difference would be from an honest pay-out to Skype's sharp business practice (Microsoft speak for screwing someone over...)

Rounding error, I think. Probably no more than $200mm on an $8.5b deal.

While 8.5/(8.5-.2) -1 = ~2.4% if your options are based on a 6 billion value then (8.5-6)/(8.5-6-.2) -1 = ~8.7%. And don't forget incentives are often based on meeting specific targets so someone in the private equity firm could easily see a 20+% gain from this.

Skype seems to be the equivalent of the Loc-Nar from Heavy Metal, turning everyone who has contact with it evil.

Especially since being bought by Microsoft, it seems.

Steve Ballmer must have a reality distortion field as well, only with the opposite polarity than Steve Jobs's.

While I think you're just making a joke and may already know this, it is important to keep in mind that Microsoft's involvement with this is probably very minimal and seems to be a no-win situation for it (edit: them? Interesting. It seems natural to say "them" here verbally but we use companies in the singular form. E.g. "Microsoft is.." instead of the British way of "Microsoft are..." yet the pronoun of Microsoft is them?)

It was a bitter joke, I think it's not too far from the truth.

The edit comment is just a distraction. It/them/blah doesn't matter. Pick one. Stick with it. People will understand.

PS: Agree with the rest of your comment.

Offtopic, but ex-British journalist here. Every styleguide I've seen over here says 'companies are singular'.

eBay (mainly through their own incompetence) managed to screw up a Skype deal badly.

I actually think Microsoft could build something more worthwhile out of Skype, and that Microsoft in 2011 is actually fairly non-evil -- certainly less so than Skype or SLP seems to be.

The thing I'm really waiting on is a16z's response to this whole thing.

Can't we all just be nice and wait for the lawsuit?

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