Might eBay's Skype be scuppered?

Skype founders in High Court legal spat with Skype's new owners at eBay
Skype founders in High Court legal spat with Skype's new owners at eBay

eBay could be forced to close down its hugely popular VoIP application Skype, due to a licensing dispute with Skype founders Skype's founders Zennstrom and Janus Friis.

Skype currently has over 40 million active daily users who use the service to contact friends, relatives or business colleagues in far-flung corners of the world – saving themselves small fortunes in phone bills in the process.

Research firm TeleGeography recently claimed that Skype currently carries around 8 per cent of all international voice traffic.

However, when Niklas Zennstrom and Janus Friis sold Skype to eBay back in 2005 for a cool $US2.6 billion in 2005, the deal did not include a key piece of peer-to-peer tech that is fundamental to Skype operating properly.

Licensing issues

And while eBay is developing new peer-to-peer software for Skype, it continues to license Zennstrom and Friis' original software via the pair's new company, Joltid.

And the original founders of Skype have now decided to revoke the licensing agreement, which is where eBay could find itself in a considerable amount of bother, should it not be successful in the current legal battle in the High Court, with eBay desperately attempting to force Joltid to let it continue using the technology to keep Skype working.

eBay has warned that its own "software development may not be successful, may result in loss of functionality or customers even if successful, and will in any event be expensive."

That High Court case isn't scheduled for trial until June 2010.

Skype scuppered?

A Skype statement was quickly issued earlier today, which simply reads: "Our plans to separate Skype have not changed. We have no comment on the litigation beyond our 10-Q disclosure."

And, for background, you can see Skype's position outlined in detail in the SEC's Form 10-Q disclosure, which clearly states:

"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."

Adam Hartley