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Skype’s Future In Serious Doubt

eBay has confirmed that it may be forced to shut down Skype after a large dispute with its original founders regarding license agreements.

When eBay purchased the VoIP-service in 2005, for $2.6 billion, the agreement did not include a piece of code which is necessary to power Skype and its operations. Because of this, eBay has been forced to license the code from the 2001 company of the founders, Joltid, which claims to be the “leader in peer-to-peer communications.” It is its “peer-to-peer communications” and rights to code that allows Skype to do what it does. Joltid has now told eBay that it is considering ending its licensing agreement, meaning that eBay will no longer have the ability to run Skype. eBay has confirmed that if Joltid does revoke the agreement, then it is quite likely that Skype will have to shut down.

Skype is used by over forty-million users worldwide and is responsible for 8% of vocal communications over the internet. It has been confirmed that Skype is the biggest operator in its field, and recently, the company said that they expect its 2011 revenue to be over $1 billion, but this will clearly not be the case if the license eBay holds to the code for the software is revoked. The possibility of Skype closing has left millions of its users concerned that they will no longer be able to easily and cheaply keep in contact with friends and family who live overseas.

When eBay purchased Skype in 2005, I think that it had a great bargain on its hands. However, I think that it was quite foolish of the company to propose a deal and accept an outcome where it would not own the code that makes Skype work. Without that, Skype is nothing, and if communications and discussions broke down and the founders decided to stop eBay and Skype using this technology, then eBay may have quite frankly wasted that $2.6 billion, as eBay will not have re-generated this amount yet, not to mention the time dedicated to it. The deal, I feel, should have included the right to use the technology without limits and without there ever being a possibility of losing this right.

The matter is now in the hands of the English High Court of Justice, and eBay is demanding that Joltid continue to allow it to use the technology that makes Skype what it is.  eBay says it is attempting to develop a piece of technology similar to what it once had rights to use from Joltid, but it claims that it will be very expensive and that it may not present all of the functionality that users once had when Skype was using Joltid’s technology.

Not only that, but eBay is bound to become unpopular with those millions of users that have fallen in love with Skype. I’m sure over the coming weeks there are bound to be a lot of questions for the two companies. The case will go to trial in June 2010, and eBay still says there is a likely chance Skype will close because of the problems that the new technology would pose. I’m wishing that this clearly great piece of technology that is well-loved by millions of people around the world does not come to a sudden standstill, and that those loyal customers are not forced to find a more expensive alternative.

What do you think? Do you use Skype? If so, has this announcement upset you? What will you do if Skype closes? Has Joltid done the right thing? Leave a comment, and let us know your thoughts.

21 Comments

[...] Is the future of Skype in doubt? [...]

well, I am a little worried
I do prefer skype and all of my friends out in the world… just having to use my normal mobile for the sms messages would become very expensive fast…
of course Ebay was a bit foolish not to get full use of all the coding… but that said it also seems that Joltid want to presure Ebay to give them more money, at least it seems to be something like that to me… the really sad part is that as always it is the end users, the small guys that end up the loosers
I mean ebay can probably survive the loos of the money without to much problems and the two guys behind Joltid wont have to worry about money eider…
dont know who is wrong or “bad” in this… all I know is that i will be hard pressed to findsomething to replace skype and so i will be one of the loosers, like millions of other users.

It is hard to give an opinion because I have never been involved in a situation concerning complex business matters. However, I am a fan of progress and this move would just seem the opposite of that. From my perspective, it is just another example of a group of people sitting at a table bargaining things out. After the decisions are etched in stone, one or more of the parties are left disatisfied. This funnels down to Skype users like myself who pay a full year in advance for an online number! Furthermore, I am sure to be turned off on the other two parties.

I have used Skype since day 1. Now use it to keep in touch with relatives and friends across the pond. I’ll imagine that another company will “fill the gap” if Skype closes down.

Seems a ridiculous “deal” ebay made? More than a little fishy to me…Maybe there’s more to it than the honest among us can ascertain…

T

The future of Skype being owned by Ebay is in doubt, but that does not mean that Skype will not be owned/operated by someone else.

I really believe ebay was rather foolish to ever enter a contract that was missing the essential software to allow the system to work.

I have been using Skype for a number of years and the service has steadily gotten better and better with each new version. I will be very sorry to lose this software.

I don’t know about everyone else who may read this, but I use skype only for its free services. Skype-to-skype calling and instant messaging. That’s it.
Of course it would be very easy to just switch to say… Google’s Talk application, Microsoft’s messenger, or any other messenger service that allows text voice and video.
However, I am the kind of guy that gets attached to his technology. If you were to take Skype away from me right this instant, I would seriously cry. Why? Well, for starters, it is the only way I can contact over 50 of my friends (besides email). They don’t have instant messaging applications. Another reason is because I am working out the details on selling a computer to a friend who lives 4 states away through skype. Lets just say the computer probably would end up not being sold.

Now here’s my opinion on this whole ordeal:
Questions for ebay: Why didn’t you get rights on everything? It might have costed you another $100,000, but you could easily make that back! I hope you have a really really good defense team because if Skype were to go away, my world as I know it would end. (Okay, maybe I’m exaggerating, but still…)
Questions for jolted or whatever they call themselves: Okay guys, you made a great piece of software and sold (most of) it to eBay. They payed you quite a bit for it. You are probably sad that they will clearly make more than what they payed you for in the next few years. It happens! So why are you acting like a little kid!? You sell something to another kid, then you start to miss it so much that you feel you must go and try to steal it back? Why?

So yeah, that’s my point of view and sorry for sounding weird there, I am not all the way there today.

All I can say is that if Skype goes away, there will be millions of people who may form an angry mob and raid eBay and Joltid demanding Skype return. Again, it may be an exaggeration, but it is still possible! (If it ever happens, let me in on it. It sounds like fun lol!)

As someone else stated here, it all goes down to us, the end-users. We are the big losers here.

I am quite worried to hear this news. I use Skype on my mobile and use it all the time. Without it my communication would just fall apart considering I communicate with all my family and friends worldwide with Skype. And needless to say, it would become so much more expensive!

It will be a shame for consumers losing money, but apart from that it won’t take long for other things to compete until something comes out in front as the preferred replacement.

Yeah, that would piss me off. Ebay was STUPID for this kind of deal. They get NOTHING for owning Skype anyway!

I am the owner of EleetGamerz.com and I depend on Skype to make free Skype to Skype calls to friends, video game developers, and fans all around the world. I recently Interviewed Jason from Novaleaf Game Studios which is located in Thailand about there Xbox Live community game, Biology Battle. It was an Huge interview that has had thousands of downloads from iTunes (EleetGamerz Podcast).

None of this would have been possible without Skype. Skype is the easiest way for me to communicate with people all around the world for free. If Skype was to go I would have no other choice but to use Talkshoe which is also Free and gives you an Phone number where people can call in on an actual Phone or on an PC with Talkshoe installed.

This is really sad news for me to hear.

It would be a huge blow for a lot of people (40 million?) to see Skype go away.

With the limited information I have, my opinion is:

1.) Ebay were idiots, and should fire (or sue?) the legal council who represented them in the deal, and additionally, fire every bozo at eBay that touched the deal.

2.) Joltid come across as sleazy double dealers who went into the sale with the up-front intention of screwing eBay and getting to sell their product twice: once for the brand and a second dip for the actual technology.

Looks like a deal between idiots and sleaze bags.

Disclaimer: But this is all just my own humble opinion.

If Skype shuts down, or at least with all the worry over its future or pending reliability problems, this will end up being a huge boost for VoIP players like Vonage.

One big advantage to Skype is that it’s cross platform (Windows, Mac, Linux). The Gizmo Project supports those three platforms as well. GMail Video and Voice only supports Win/Mac, no Linux. But, with Google Voice offering free calls to U.S. phones, will any VOIP service survive, especially if they expand to international calls?

I have credit on my Skype account which I just use with my computer. Will I lose that?

I am VERY upset at the thoughts of losing Skype. It is the way I keep connected with family overseas.

How can Joltid sell Skype for such an exorbitant rate and then pull the one thing that keeps it running? That is just low-down and dirty.

I been using Skype as my primary phone in the house, for personal and business calls.

I am about to build a skype server so all the phone connections in the house work.

This is quite upsetting because the price of skype is so darn competitor for outgoing and income calls with a phone number.

I used Vonage for years, which was a horrible experience. Skype has been a wonderful experience.

I think it’s like buying a diamond ring, but only borrowing the diamond, whatever possesed ebay to buy half a product!?!?!

I use Skype as the main communications tool in my business and also to stay in contact with my family in another country.

I agree with Gavin Roskamp, that Joltid are acting like a spoilt brat and should grow up.

well, as an european, i have to admit that Skype isn’t popular. We are not aware about its features. It seem to be prices. how can we use Skype on a mobile ? Are you sure that consumers will loose money ? i was just preparing a suscription. ( dont blame me , i’m French)

Skype will be missed but there are many alternatives out there like yahoo messenger, google voice, ekiga and many others.

This troubles me very much! My business has heavily depended on their VOIP solution and once I find a suitable alternative, I’ll never use skype again.

What Do You Think?

 

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