"Microsoft announced the Skype acquisition on May 10 and plans to connect it to Outlook e-mail, Xbox game console, Windows mobile phones and corporate-phone software."
This is phase #1 of Microsoft's usual "embrace, extend, extinguish" strategy. Right now they embrace Skype and build it into some of their products.
The next step will be to enhance the Skype protocol with extra Outlook and Windows Phone options; these protocols will be proprietary, patented and certainly not published.
The final step will be to discontinue the Skype clients for OSX and Linux ('because their increasingly incompatibility with rich features the Windows platform offers Skype users'), update the protocol even further so that current Skype clients will stop functioning, and gradually remove the 'Skype' name and logo from their products, and eventually, from history.
The idea is to disadvantage any competitors, and to make Skype users switch to Windows or a Windows phone.
The Skype protocols are already proprietary and not published (I haven't checked if they're patented). It's not like Skype is an open standard or anything. This is one company that sells proprietary products buying another that sells proprietary products.
Microsoft would be stupid to kill Mac and Linux support for Skype (perhaps they may kill just Linux support). The value in a communication technology is in how many people can use it; the more people who are on it, the more it attracts. If they start cutting people off, it will become far less appealing for anyone to use, and very easy for a competitor without such restrictions on their network to steal customers.
Does this not hurt their future ability to invest in big name up-and-coming companies? If I'm the next facebook or twitter, these kind of shady practices would make me think twice about handing over a large share of my company to them. Can they only get away with it because their competitors engage in the same behaviour?
I wish there was an alternative that matched Skype's previous good qualities (or better). The obfuscation of the OS X Skype client UI, plus the fact that they're now owned by Microsoft has cast a shadow on what used to be a great service (to me at least). Surely there is room in the market for a serious competitor.
Tinychat is the only one of these that doesn't sound like baby talk. Skype has done well and become a verb ("Skype me") and I don't see anyone asking to voxox, oovoo, or goober me anytime soon. There is a big gap out there for someone to offer a good quality, serious competitor.
I tried ooVoo recently as my significant other had problems getting Skype working. I must say I can't see it as a competitor to Skype. The UI is borderline unusable due to all the flashing ads. What's worse is my contact list of one got deleted, and it was impossible to re-add my GF. That was on day 2. A few days later, she was back on my contact list. I don't trust it, and it's a pain to use due to all the ads and the general UI.
Are there any implementations of it that actually work well through NAT and which have a UI that non-technical people can use? We use Skype a lot - iChat would be fine, too, but seems to require port forwarding on both ends, which isn't going to happen anytime soon. Facetime forces you to use video, which isn't always what you want.
Google has just added WebRTC to the Chrome source tree. WebRTC (real-time communication) consists of Jingle, VP8, some voice codecs and other audio software they bought, and various NAT traversal algorithms. The IETF is standardising it and Mozilla and Opera are committed to shipping it. Somewhat interestingly, a bunch of Skype engineers seem to have been involved in it too.
The jingle portion of WebRTC comes form libjingle, and is usable right now with Google Talk. There is also a second open source implementation that works with Google Talk called "telepathy".
Gmail's voice and video chat works fine and has a pretty simple UI. I'm not sure it follows those specs completely but there are open-source clients that can connect to it. The Google client itself has pretty good Windows/OSX/Linux support as a browser plugin and with the Google Voice integration in Gmail you get a pretty full-featured UI to call both people that are on Google Talk and normal phones. Unfortunately the Google Voice stuff is still US only.
I did mention there were open-source implementations that could interface with it. I tested it against empathy (telepathy based) today and was pleasantly surprised with how well it worked. Previous attempts weren't as successful. I tried with both clients inside the same NAT though so I don't know if the firewall punching bits are as good.
Thanks for the clarification on the standards, it seems to have evolved since the early days.
To keep this in perspective, Gurle, Dean and Gillespie were not long time employees from the startup days (all less than three years), Sunkara and Campa came on board this year through acquisition, and Brewsher, as head of marketing, was probably redundant in light of Microsoft's purchase.
This is how the market works. The reason you don't screw your employees like this is not just because you're a nice person, but because it costs you money in the long term.
Alas, market mechanisms aren't such great protectors here. They work best with large populations of similar events, where "average" behaviors can signal expectations and volatilities can be estimated on a fairly stable basis. Endgames offer the unethical opportunities to reap excess rewards without market penalties.
Hopefully, there will be enough information to know just how screwed these people are (or aren't, I've seen gossip that several were late-comers) and the VC / executive players involved. It's possible that these decisions make some sense, but it sure looks bad at first glance.
Funny how people thing this system could ever work.
Companies are the original trolls, making up new accounts and coming back without any negative karma or legal responsibilities. As long as corporations are separate from the people running them it's a joke.
What can a (startup) employee do to prevent these sort of situations from occurring after a liquidity event? In particular, what sort of terms should be in your hiring agreement -- eg. double trigger acceleration?
As PG suggests: http://news.ycombinator.com/item?id=2672454... the best thing you can do is work for a company where you trust the management team and the VC's that back them. An early stage investor would almost never do such a thing because it would completely damage their ability to get access to the best deals.
Check thefunded.com for the VCs (and ask around as well) and do your best to work for good people who care about their employees and reputation.
This sounds like it was explicitly to get around the trigger clauses in the contract. They likely had acceleration for change of control, and fired people before the "event" that would have triggered that acceleration.
I bet that the "with cause" part would be pretty easy to find. Every company I've worked for that had official policies wrote them so vaguely and all encompassing that every single employee was in violation. Some of the "don't introduce 3rd party software to the network" policies, when read strictly, make every single developer who writes a small automation script a violator of the policy.
Just when I (and everyone else) was saying how horrible this is, I was shocked to find out the Google did something very similar to a Director of Operations named Brian Reid. They fired him 9 days before the IPO- leaving him with 119,000 unvested options at $.30 strike price. http://en.wikipedia.org/wiki/Brian_Reid_(computer_scientist)
I hate to get spiritual here, but this is a major dose of bad karma, and I won't be surprised when shit hits the fan and something happens to these companies during, or after the deal.
In the meantime, I'm looking for a way to get off of Skype. I wish Google would spend more time improving Google Voice and Google Chat. I wonder if Apple has plans to turn Facetime into a Skype alternative?
This is pretty standard. If your options haven't vested and you're let go there usually isn't much you can do. I doubt MS has anything to do with it, except the fact that they probably didn't express any particular concern regarding the deal if these employees were let go.
There's plenty they could have done before the contract was signed. They could have easily pushed for double trigger acceleration in their own contracts to prevent this.
Company's officers fiduciary duty is to protect interests of shareholders. Complicating contracts with the purpose of transferring that wealth from shareholders to executives could be construed as violation of that duty.
"Transferring wealth" isn't an abandonment of fiduciary duty, it's exactly what you do when you hire people and pay them. Nor is there anything wrong with negotiating contracts describing the details.
Good point. Just saying that unless you're a founder or a majority shareholder, you have little power in terms of blocking the deal from going through.
A lot of people have commented that this type of stuff is standard. Maybe that's true.
But if I considered my stock options to be an important, must-have part of my compensation package, I'd demand contractual protections. Double triggers have been suggested; one could envision other safeguards as well. One way or another, I'd make sure that my options were safe in the event of my arbitrary termination.
If I couldn't negotiate that, I'd base my negotiations on the assumption that the worst-case scenario would happen. In other words, I'd discount the value of my stock options accordingly when deciding whether the offered compensation package was adequate.
I'm wondering if this could be some mad-men-esque deal where the people fired really want to do their own thing? Get fired on purpose so that they're free to do their own company in the same space.
Probably not but that's something that came to mind for me.
While it is their call, and they will want to maximise profit from the sale, there's no chance that MS didn't sign off on this - think how pissed they could be. "We're buying your company and you just fired the executives that we wanted to keep running it?"
I can only assume that it was decided as part of the sale negotiations. Whether it was Microsoft saying "we want to bring in a new team at the top" or the owners saying "we want to maximise profit" first, who knows.
I am not so sure that has been established. MS is not historically this sociopathic. It might be a pig in a poke deal. Pay for a company, get an empty bag. We'll know if this is the case if MS says "hey wait a minute" or not.
There's always a chance that it wasn't part of the deal, but that Microsoft won't care. If they feel that they are buying the tech, and not the team, then they might not object to this.
This is phase #1 of Microsoft's usual "embrace, extend, extinguish" strategy. Right now they embrace Skype and build it into some of their products.
The next step will be to enhance the Skype protocol with extra Outlook and Windows Phone options; these protocols will be proprietary, patented and certainly not published.
The final step will be to discontinue the Skype clients for OSX and Linux ('because their increasingly incompatibility with rich features the Windows platform offers Skype users'), update the protocol even further so that current Skype clients will stop functioning, and gradually remove the 'Skype' name and logo from their products, and eventually, from history.
The idea is to disadvantage any competitors, and to make Skype users switch to Windows or a Windows phone.