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Skype May Be Shut Down

Skype May Be Shut Down

On Sunday, August 2nd 2009 at 02:52 PM
By Andrew Pociu (View Profile)

Skype FounderseBay, the owner of Skype since the 2005 purchase, has recently announced that due to a licensing disagreement with the founders of Skype, it may have no other option than to shut down the application.

Skype was founded by two Danish entrepreneurs, Niklas Zennstrom and Janus Friis, and purchased by eBay in 2005 for $2.6 billion. However, the purchase executed at that time did not include a core component of the VoIP service that powers the Skype application, and this technology had to be licensed by eBay from the founders over the past few years.

The two founders of Skype have recently decided to stop licensing the technology to eBay, and Joltid (the company under which Niklas and Janus are licensing the crucial component), is now being sued by eBay.

If eBay loses in court, it announced that it will most likely be forced to shut down Skype. The alternative is for eBay to develop its own component, but "may not be successful, may result in loss of functionality or customers even if successful, and will in any event be expensive" as eBay put it.

The English court set the trial for June of next year, making it difficult for eBay to push Skype as an individual company on the stock exchange floor, like it was intending to this year.

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Comment Current Comments
by dave on Friday, September 11th 2009 at 05:39 PM

Very interesting, I wonder why they decided to stop licensing the component to eBay. They must have had a good reason. If eBay has to shut down Skype, they may as well try their hand at something else like <a href="http://www.arpac.com">packaging equipment</a> since their users all require packaging.

by CC on Thursday, September 17th 2009 at 02:15 PM

Niklas Zennström is actually from Sweden and Janus Friis is from Denmark.

;)

CC

by Yoshi on Wednesday, September 23rd 2009 at 07:45 AM

Skype development was bank-rolled by these guys but the coding was done in Estonia (presumably by Estonians). FYI

by so what? on Thursday, September 24th 2009 at 03:35 PM

fyi -
who cares where the coding was done?

by Yoshi on Thursday, September 24th 2009 at 06:59 PM

Don't be so ascorbic and pedantic. You speak for yourself (and your children) only. Some other people may well be interested in where - which nationality did the coding. So there. You are not some kind of official party spokesman for the Unwashed Masses - irrespective of your Hollywood-jaded, over-inflated, self-estimation.

by TK on Tuesday, September 29th 2009 at 11:17 AM

Interesting.
Did you mean acerbic? Ascorbic, if you're referring to ascorbic acid is kind of close to acerbic. But only half right.

As to pedantic, you've got the meaning wrong altogether. The comment stating who cares is a generalization which is in pretty sharp contrast to pedantic which is defined as a narrow or overly focused point of view. Pedantic could also be described as an anal viewpoint which seems to be where yours is heading.

by ERic on Wednesday, September 30th 2009 at 04:58 AM

This is the first time I stumble upon this site. What amuses me is not the article but the several comments above. You guys are cool. Very funny.

by Yoshi on Wednesday, September 30th 2009 at 06:30 AM

Thanks TK - I needed to kill two birds with one stone .. thanks for the clarification .. I try .. but I'm only human .. and a busy one .. so I appreciate your grammatical refination - but steer clear of the old anus there - especially the narrow, overly focused point of view - Old Bean.

by Chester Field on Wednesday, October 21st 2009 at 03:29 AM

OMG grow up.....how anal retentive can you get? YOSHI did you go to sleep with a thesaurus on your head? If your trying to look like an idiot, your doing a great job! Grammatical "refination"(sic)? LOL give over M8.....ON YER BIKE! {I think he meant 'recriminations' but at this point, who bloody well knows?)

by Chester Field on Wednesday, October 21st 2009 at 03:30 AM

OMG grow up.....how anal retentive can you get? YOSHI did you go to sleep with a thesaurus on your head? If your trying to look like an idiot, your doing a great job! Grammatical "refination"(sic)? LOL give over M8.....ON YER BIKE! {I think he meant 'recriminations' but at this point, who bloody well knows?)

by b on Friday, November 6th 2009 at 06:30 AM

About the license - maybe someone with an alternate skype-type offering took over the license?

by Witt on Sunday, November 29th 2009 at 11:09 PM

That's what i am thinking Mr.b. Skype would be no more soon. return 0; hahaaha!

by J on Tuesday, December 15th 2009 at 12:04 PM

Looks like oovoo is going to get more business.

by redhorse on Saturday, December 26th 2009 at 04:21 PM

Based on the information here and elsewhere about this situation, the entire transaction is suspicious. Consider this scenario: A startup creates an emergent application that provides a service that a lot of people want (low cost, high quality VoIP)...that just happens to be good technology. The core component is likely the compression and other algorithms that provide the high QoS. Such software products are typically layered by design necessity and, if one was a coniving type, he would sell the application for a high price and not reveal in the transaction papers that he was excluding a core component. Then after the dupe paid all the money, make more money still by licensing the core technology (seems more like coercion, elsewise the $2.6B is totally flushed from the start, right?) to the duped party. Then later, after seeing the application blossom and the usage go up, greed steps in again. With the critical service component in hand, and by denying its licensing to the former partner, the highly successful application is rendered useless in a flash, but the core component remains reusable. How? With the critical service component already developed, all you have to do is build (or buy) the application layer to have a similar high quality application (a much less challenging propostion). And, you have billions of bilked money to do it (besides the original $2.6B, how much was the licensing for those years?). And more than likely the creative, inventive engineering type that developed the core algorithms probably only made enough money to pay rent for 4-6 months!

This is so obvious....like the plot in a cheap detective novel! This scenario is more plausible than many might think....it has been done before, and many times over. However, I love it when lawyers get taken. I do not feel sorry for eBay, but if this scenario is correct, it should not stand and eBay should not be left holding the proverbial bag). Maybe this time eBay gets better lawyers -- not just the typical crooks, but some that are technically smart, as well as coniving as the original offenders.

by Mike on Friday, January 22nd 2010 at 02:44 AM

I like hearing where the coding was done.

by joseph on Tuesday, March 16th 2010 at 09:46 AM

oh,great, my sister uses skype, she gets mad if she can't use it.


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