Skype Under Threat Of Closure
Skype, the market leading VoIP service may be closed down due to a licensing dispute with the founders of the internet telephony service.
With over 40 million active daily users around the world who use Skype for business or to keep in touch with friends and far-flung relatives. The loss of the Skype service, which carries about 8 per cent of all international voice traffic, would have a major impact on global communications.
eBay the online auction powerhouse bought Skype from entrepreneurs Niklas Zennstrom and Janus Friis for $US2.6 billion in 2005, but this did not include a core piece of peer-to-peer communications technology that powers the software.
eBay has since been licensing the technology from the founders’ new company, Joltid, but the pair recently decided to revoke the licensing agreement.
The matter is now the subject of a legal battle in the English High Court of Justice, with eBay trying to force Joltid to let it continue using the technology.
eBay said in no uncertain terms that if it lost the right to use the software it would most likely have to shut Skype down. The company also said it was working on developing ‘‘alternative software’’ to that licensed through Joltid, but this ‘‘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,’’ eBay wrote.
In the filing eBay also said that, even if it was successful in developing alternative software, the technical challenge of assuring backward compatibility with older versions of Skype’s technology ‘‘may be difficult to overcome’’.
The original quarterly report can be seen here: http://www.sec.gov/Archives/edgar/data/1065088/000119312509157212/d10q.htm (The section: “Litigation & Other matters” contains the relevant information)
This would be a disaster – really hope this doesn’t happen as Skype is an awesome tool for us online marketers………….
As a small charity that links experienced mentors to entrepreneurs in developing economies (particularly in the Middle East), this could be particularly disastrous. Our mentors are based all over the world and we (and they) rely on tools provided by services such as Skype to help us achieve our objectives of eradicating poverty in some of the poorest regions.
Whilst I’m not in favour of using something you aren’t allowed to – that would be tantamount to theft. I am surprised that Ebay failed to see the limitations posed when they purchased the company – surely they are big enough to have seen potential problems looming if they didn’t look for a replacement technology they owned?