Skype In Negotiations To Acquire Gizmo5

Litigation-beleaguered Skype is in negotiations to buy peer-to-peer VoIP startup Gizmo5, say multiple sources. The price tag is said to be in the $50 million range, but the deal is far from consummated. Other potential buyers may be looking at the company as well. Gizmo5, which was founded in April 2003, has raised $6 million to date, plus an unspecified amount from founder/CEO Michael Robertson.

Skype, which is being sold from eBay to a new investor group, doesn't have control over it's core P2P technology, and that intellectual property is now the subject of two lawsuits - one against Skype and one against Mike Volpi and Index Ventures, who are part of the buyout group.

That puts Skype at significant risk. Without the technology Skype can't make Skype to Skype calls, the core of its service. And those lawsuits don't appear to be close to settlement - some people close to Skype saw that there is a good chance the cases will actually end up being tried in a court.

We've heard Joltid wants as much as half of Skype Unless Skype makes huge concessions to plaintiff Joltid and settle the case, they have two backup plans.