Quite a coup for HP. Andreesen–who co-authored Mosaic, the browser that popularized the World Wide Web–is an icon in Silicon Valley and his expertise is highly sought. In addition to helming his new venture capital firm, Andreessen-Horowitz, Andreesen also serves as chairman of social networking outfit Ning and sits on the boards of eBay (EBAY) and Facebook. HP (HPQ) is lucky to get him, if only because it seems unfathomable that he’d have the time or bandwidth for anything else.

“Marc Andreessen is a software pioneer whose leadership has helped shape the Internet,” an ebullient HP CEO Mark Hurd said in a statement. “Marc’s entrepreneurial background and industry expertise will be a welcome addition to the HP board of directors.”

The suit, over Joltid-owned peer-to-peer technology used in Skype’s software, seeks an injunction against Skype as well as damages that Joltid claims “are amassing at a rate of more than $75 million daily.”

A nasty surprise for Skype’s new owners: Silver Lake, the Silicon Valley-based private equity group; Index Ventures, the London-based venture capital firm; Internet entrepreneur Marc Andreessen’s new Andreessen Horowitz fund; and the Canada Pension Plan Investment Board. Though, really they should have seen this coming. After all, Skype and Joltid have been sparring since earlier this year.

From an eBay Securities and Exchange Commission filing earlier this year:

As previously disclosed, Skype has been in a dispute with the licensor of certain key technologies and had terminated a “standstill” agreement that had been entered into between the parties, permitting either to take action against the other with effect from March 2009. On March 12, 2009, Skype Technologies S.A. filed a claim in the English High Court of Justice (No. HC09C00756) against Joltid Limited, a BVI company.

In connection with the license agreement between the two companies, Skype licenses peer-to-peer communication technology from Joltid, and Joltid has claimed that Skype has breached the terms of the license agreement. Following the filing of the claim, Joltid purported to terminate the license agreement. In particular, Joltid has alleged that Skype should not possess, use or modify certain software code (the “Code”) and that, by doing so, and by disclosing the Code in certain U.S. patent cases, pursuant to orders from U.S. courts, it has breached the license agreement.

On the basis of, among other things, the parties’ mutual dealings since the execution of the licence agreement, Skype is asking the English High Court for declaratory relief, including findings that:

(i) Skype is lawfully accessing, in possession of, using and modifying the Code so that Skype is not in breach of the license agreement with Joltid and accordingly Joltid’s notice of breach and subsequent notice of termination are invalid;

(ii) Skype lawfully disclosed the Code in the U.S. patent cases so that Skype is not in breach of the license agreement with Joltid and accordingly Joltid’s notice of breach and subsequent notice of termination are invalid; and

(iii) Joltid has certain indemnity obligations in relation to the U.S. patent proceedings.

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. In such event, Skype would be adversely affected and the continued operation of Skype’s business as currently conducted would likely not be possible.

Perhaps this is why we saw so few bidders for Skype?

I am a Facebook ‘friend’ of Ballmer’s.”

– Netscape founder Marc Andreessen on his new-found friendship with Microsoft’s CEO

Digital Daily’s John Paczkowski is blogging from TechCrunch40 in San Francisco. Technical difficulties at the conference site prevent him from live-blogging, so he is summarizing with the following report on this keynote panel, dubbed “Humble Beginnings,” in which Sequoia Capital’s Michael Moritz (pictured far right, above) interviews Marc Andreessen (founder Netscape and Opsware, co-founder Ning), David Filo (co-founder Yahoo) and Chad Hurley (co-founder YouTube).

• Moritz asks Hurley (pictured right) to reminisce about his first business years ago in Pennsylvania. Apparently Hurley’s background is in art: He got his start when he discovered the intersection of art and business at age 5, trying to sell plywood paintings.
  (Plywood paintings? Cheaper than felt, I suppose.)



• Filo (pictured left) is asked how he got from Louisiana to California. Answer: Stanford.
  (No kidding! Half of Silicon Valley would likely answer that question the same way. Was Moritz expecting something different?)
• Andreessen (pictured below) is asked about his humble origins in Wisconsin. What brought him to California? Answer: “I wanted to get the hell out of Wisconsin,” (Half of Wisconsin would likely answer that question the
  same way. Kidding.) He adds that he was intrigued by the ideas then driving Silicon Valley.
• Filo asked about how he and Jerry Yang got the urge to bail on Stanford and venture out on their own. “When we first got started,” he replies, “we didn’t think of what we were doing as a business at all.” He notes they were forced to decide between Yahoo and a Ph.D.
• Way back in the beginning, Moritz asks, didn’t Filo and Andreessen have some sort of business relationship? Filo replies that Andreessen and Netscape folks gave early Yahoo a bit of rack space at their data center.



• Moritz then questions Andreessen (right):
  Q: At the beginning of Netscape did anyone have any sense what the
  subsequent 5 years would look like?
  A: No, of course not.
  Q: Were there key moves you made in the first 50 or 60 days that were instrumental to your success?
  A: Initially everyone thought we were going to charge for Netscape. But then we released it for free. That brought us a lot of buzz and a lot of traction as well.
• Moritz to Hurley: How did you conceive of YouTube?
  A: We wanted to solve a problem–online video. We didn’t see it as a business, either.
• Moritz: How often has business gone in a direction you never would have conceived of even in your wildest dreams?

  Filo: Well, Yahoo was one of the first businesses that had no revenue or even future prospects for revenue, so that was pretty unusual. Email, etc. were all relatively unexpected directions for Yahoo which was conceived as a directory. Apparently, every business Yahoo’s pursued has been one that Filo never would have imagined. (Good explanation for Terry Semel.)

  Andreessen: “CEOs are special people.” (Nice. Wonder if there’s an associated public-service campaign: “Hi, I’m Marc Andreessen for CEOASP— CEOs Are Special People.”)

• Moritz: Chad, were you surprised by the issues you encountered as YouTube CEO?
  A: Difficult to transition from developing the product to managing the business. Need to put the right people in place in order to survive.
  (I wonder if Hurley will save that little gem for play on famous
  business book by head of GM…)
  Moritz: Chad, do you remember a time when you worried that you’d lose the business?
  A: There was a time when we were growing far too quickly for the data centers that were hosting us. We were forced to go out and build in order to continue. There are a lot of media companies that feel threatened by us now. We just need to educate them about what we’re doing. There are a lot of media companies that feel threatened by us now. We just need to educate them about what we’re doing. (Bet Viacom CEO Philippe
  Dauman would get a good laugh out of that one.)
• Same question to Andreessen, who obviously has some meatier answers: Rambling history of OpsWare. Long story short, the market crashed, we were sitting there burning cash and so we did a “restart,” we essentially reconceived the company as a software outfit and packaged up and sold the portions that remained. Ironically, it was a great time to start a company, because it was a lousy environment and everyone else was afraid of doing it.
• Moritz poses the next question to the panelists: What are some of the worst decisions you’ve made?
  (Besides agreeing to participate in this panel?)

  Hurley: We didn’t hire fast enough.

  (BZZZT. Wrong.)

  Filo: We never understood the magnitude of the business opportunity ahead of us. We underestimated. That said, it’s not clear that if we had, things would have gone differently. We’ve made some bad short-term decisions that would have benefitted from a long-term view.

  Andreessen: He recalls a period when search engines were paying Netscape to advertise to the traffic that was coming to Netscape.com. “We viewed that as free money. But I always wonder what might have happened if we’d suddenly decided we weren’t a software company, but a content company and suddenly changed our business model.”
  (Netscape-Time Warner, obviously. Duh.)

• Another general question from Moritz: Who in tech do you admire the most these days?
  (Mike Moritz?)

  Filo: Steve Jobs. He cites Apple’s culture of innovation and design and marketing savvy.
  (Damn. Wrong again.)

  Hurley: Steve Jobs. Notes Jobs is a great speaker.

  And you, Marc? Jobs trifecta! Andreesen agrees, it’s Jobs.

  (Five dollars and my pass to this conference says everyone in the audience is silently wishing it was Jobs on stage right now, instead of these three.)

• Wrap-up question from Moritz: What’s the time you’ve enjoyed the most in your career?

  Filo cops out: “Every period, every year had its moments. You could pick any one.”
  (Precious and few are the moments we two can share, Jerry …)

  Hurley: “It’s great when you first start. It’s hard to replace the experience of that time when you didn’t quite know what would happen next.”

  Andreessen apparently opts to deliver his answer telepathically or Moritz skips him, because he’s not given a chance to reply.

• Audience Q&A:

  Tips for start-ups?
  Andreessen: 1. Have a founder who can be CEO. 2. Don’t hire too many people too quickly. Keep the team size small until you identify a product for which there is a market.
  Hurley: 1. Keep your team small. You can iterate faster. 2. Look at how you personally use your product and use that to guide your development.
  Filo: Hire passionate employees.

  Softball question to end all softball questions: What are your favorite Web sites?
  (Rotten.com? Diaper Pail Friends?)

  Filo: Sequoiacapital.com (laughter). TechCrunch.

  Hurley: Facebook.

And that’s the big finish. Off to find coffee.

At that price, Andreessen–who owns nearly 6.5 million shares–stands to make $92 million off the deal. Which is a nice bit of validation, given Opsware’s inauspicious beginnings as Loudcloud, a managed hosting company remembered more for a string of heavy losses and a lackluster 2001 IPO.

“Loudcloud took off like a rocketship, raised $350 million in equity and debt financing, went public in March 2001, and was rapidly nearing $100 million in annual recurring managed-services revenue when the entire market blew up and virtually all of our competitors and peers went bankrupt,” Andreessen recalls in a blog post announcing Opsware’s sale to HP. “In September 2002, we did a complete restart as a public company–we sold our managed-services business to EDS and turned Loudcloud into Opsware, a software company based on the core intellectual property developed at Loudcloud. Over the next five years, we executed our original vision–automation of large-scale modern data centers and computer systems. … Today we have announced that Opsware is being acquired by Hewlett-Packard for more than $1.6 billion in cash, or $14.25 per share. For Opsware, this means that our vision will now get delivered at much higher scale–being part of H-P’s software business will ensure that our software will be used by a much larger number of organizations and have an even more dramatic impact on the industry than we would possibly have been able to reach by ourselves over the next several years.”

And for Andreessen, whose first start-up, Netscape Communications Corp., marked the beginning of the Internet boom of the late ’90s, it’s proof that contrary to what F. Scott Fitzgerald wrote, there are second acts in some American lives. “One of my favorite facts about this deal,” he wrote, “is that at our acquisition price of $14.25 per share, everyone who bought and held stock in Loudcloud or Opsware in the public market at any time made money.”