Skype in danger of being shut down

Back in 2005, eBay bought Skype from Joltid. The 2.6 billion dollar price tag did not include the "Global Index P2P software" that Skype is based on. Joltid is trying to cancel the license that Skype uses for this technology. If this happens, the Skype service will be shut down permanently.

Skype is the largest internet telephony software worldwide - as well as the worlds largest international voice carrier. The 2.6 billion dollar sale did not include Joltid's core piece of P2P code called "Global Index". Global Index is the P2P protocol that Skype uses as it's core communication technology.

In a recent quarterly report, filed with the US Securities and Exchange Commission, the following was announced:

"Skype licenses peer-to-peer communication technology from Joltid Limited pursuant to a license agreement between the parties. The parties had been discussing a dispute over the license. In March 2009, Skype Technologies S.A. filed a claim in the English High Court of Justice (No. HC09C00756) against Joltid Limited. Following the filing of the claim, Joltid purported to terminate the license agreement between the parties.

In particular, Joltid has alleged that Skype should not possess, use or modify certain software source code and that, by doing so, and by disclosing such code in certain U.S. patent cases pursuant to orders from U.S. courts, Skype has breached the license agreement. Joltid has brought a counterclaim alleging that Skype has repudiated the license agreement, infringed Joltid's copyright and misused confidential information. On the basis of, among other things, the parties' mutual dealings since the execution of the license agreement, Skype asked the English High Court for declaratory relief, including findings that Skype is not in breach of the license agreement, that Joltid's notice of breach and subsequent notice of termination are invalid, and that Joltid has certain indemnity obligations in relation to the U.S. patent proceedings.

Trial is currently scheduled for June 2010. 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. Skype has begun to develop alternative software to that licensed through Joltid. However, such software development 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. "

As pointed out in the quarterly report, Skype is currently attempting to develop an alternative protocol to replace the Global Index but the fast approaching court battle in June 2010, it does not seem like Skype will have enough time and the service may be shut down entirely.

The shutdown of Skype would affect at least 480 million users, more than that of Facebook.

Thanks to Neowin user dvb2000 for the news tip!

Report a problem with article
Previous Story

Microsoft scraps Windows 7 'E' version for Europe

Next Story

US student ordered to pay $675K fine to the RIAA

92 Comments

Commenting is disabled on this article.

Probably the silliest sensationalist story ever. Skype will not be shut down. Clearly a settlement is most likely to happen that is beneficial to both parties. Closing it down isn't in the interests of either Joltid Limited or eBay.

I don't think this is necessary such a bad thing, assuming Skype is able to develop an alternate protocol within the time frame; one result may be an opening up of the new protocol and from that finally a little interoperability with some other clients. Skype for Linux has always been terrible, some proper Skype integration in to pidgin would be great. Other multi-IM clients and clients used for mobile devices such as phones could also get a big boost by being able to put custom Skype apps together themselves instead of waiting for Skype to produce its own (which with the restricted licensing of the current protocols is all they can do as far as i understand it)

That said, there's always the chance a newer protocol fails to get developed, or to a lesser extent whatever they do come up with simply sucking to much to really be competitive with whats already being offered by other communication tools "/

</musings>

Judging by some of these comments, a lot of you really haven't given this issue much thought. Many of you talk about alternatives being available. There are alternatives to virtually every product on Earth so that statement is invalid. The thing to consider is that Skype has now been well integrated into the personal and business world. Some people / corporations depend on Skype for their daily activities and count on it to be available the next day to conduct business or talk yo their 90 year old grandma overseas. You can't just brush it off and say there are alternatives. It took a lot for the technology to become common ground and to be well supported in the industry. You can't just suddenly remove it from existence and expect people to look the other way.

The shutdown of Skype would affect at least 480 million users, more than that of Facebook.

Do they ever acknowledge people with multiple accounts in those stats? Or is that supposed to be Unique Users?

zhiVago said,
won't happen. with so many resources that skype has, they'll just use another technology.


They already offer SIP access to business users, probably not too hard to offer it to everyone!

Skype has begun to develop alternative software to that licensed through Joltid. However, such software development may not be successful, may result in loss of functionality or customers even if successful, and will in any event be expensive.

I'm sure that a lot of the functionality is covered by software patents, so they'll have to pay licensing fees for the IP used in "Global Index P2P Software"

And if they don't want to do that, they can always innovate and develop their own methods! And what's wrong with that? Isn't this how things are supposed to work? Business as usual!

The following stories will probably read "Skype looking towards new software innovations for a better market position!"

This sucks. I really hope they can resolve this without shutting the service down. I love Skype. It's one of my favorite ways to make calls from my cell without using my minutes, lol.

At the end of the day it will never happen, although JoltID have kept the source code they have licencsed the rights to use it as a VOIP application in the exact manner Skype does. They keep the source code all they could do is develop new software around it, that doesn't infringe on eBay's licence, yeah good luck with that.

They are stuck they will renew agreements or sell off they can't develop something in less than 10 months and have it as reliable and user friendly as Skype is UNLESS they already have???? But Skype as huge as it is with it's paid for user base and advertising subscriptions will have a new source code thrown at them from any number of other VOIP applications, that could easily be integrated.

Anyone seen the P2P source code taht is utilised???

I don't think it will be, 10 months is a very short time to develop the code necessary that doesn't infringe on already existing application source code. That is one lifecycle I would not want to be Project Managing!!!! Do me a favour don't ever be a PM.

It would be a shame if Skype is shut down. I'm using WLM but it's cr@p when it comes to voice/video calling.

MtDewCodeRedFreak said,
Hmm, am I the only one that does NOT care about Skype?

Me too, no matter what there are alternate programs, and some of them are already better than Skype but nobody is noticing them, once Skype shutdown (if it will) everybody will just switch and use those programs.Who cares about Skype !

kInG aLeXo said,
Me too, no matter what there are alternate programs, and some of them are already better than Skype but nobody is noticing them, once Skype shutdown (if it will) everybody will just switch and use those programs.Who cares about Skype !

What programs?

ccuk said,
What programs?

Ventrilo, Teamspeak, Mumble, Loudtalks, and I could list more that do similar things.

Losing Skype would not be the end of the world. Though it's very high quality.

HolyLiaison said,
Ventrilo, Teamspeak, Mumble, Loudtalks, and I could list more that do similar things.

Losing Skype would not be the end of the world. Though it's very high quality.

Oh I REALLY hope you are kidding. Those alternatives are all garbage. Something being high quality is not the only thing that is considered. There are alternatives to virtually every product on Earth so that statement is invalid. The thing to consider is that Skype has now been well integrated into the personal and business world. Some people / corporations depend on Skype for their daily activities and count on it to be available the next day to conduct business or talk yo their 90 year old grandma overseas. You can't just brush it off and say there are alternatives. It took a lot for the technology to become common ground and to be well supported in the industry. You can't just suddenly remove it from existence and expect people to look the other way.

Joltid is a stupid company as it held onto the core to make extra profit but now that it aint working Joltid wants to kill it and skype would go with it how dumb, Joltid should be countersued for not selling all of skype and Joltid should be put on the list of the worlds dumbest companies.

soldier1st said,
Joltid should be put on the list of the worlds dumbest companies.

If you think about it, it could be a very clever move.

eBay buys Skype from Joltid, neglects P2P core
eBay then decides to sell Skype again, rejecting Joltid's offer to get it back
eBay decides to float it as a separate company
Joltid threatens to shut down the entire market by revoking the licence

It's possible that Joltid could force eBay's hand and sell Skype back to them...

My theory anyways.

Joltid is the stupid company for holding onto the core components that eBay/Skype needed?

If anything eBay is the idiots for parting that much money for a product that never really seemed to make much sense to their business and in doing so not actually buying the full product.

This is so stupid... Why would Skype / Ebay even allow themselves to purchase a company and rely on a technology that the seller got to keep?? How unbelievably stupid...

This would suit soo many telco's around the world and that includes Google with them starting to push Google Voice.

Of course the last thing either party cares about are the many people who are using the product and how its shutdown would impact them.

I guess it's time to check out alternatives to Skype and get familiar with them, just in case.

If it goes then i'll be completely snookered (as I use skype every night to call my other half) and there's no real other decent VOIP out there which does what I want (free calls to the US)

Quikboy said,
Well I guess there's always Windows Live Messenger or Yahoo! Messenger for calls...

Google "free voip"; there are dozens of companies looking to jump in on Skype's business.

And why would some1 want to shut down skype? there are millions using this service, it's impossible to shut it down. People demand this service.

LAMj said,
And why would some1 want to shut down skype? there are millions using this service, it's impossible to shut it down. People demand this service.

Just because millions of people use it does NOT mean it's "impossible" to shut down. What makes you think this? Or rather, what the hell are you smoking, because I want some.

Yeah, but imagine all of the people who bought products specifically for use with skype. It's not like shutting AIM or MSN down. Skype is a paid service which has many products that are sold towards it.

There would definitely be lawsuits if it were shut down... and the entire world would be ****ed off.

hey

I forget to tell you something add right now.

I do like skype, because of webcam for sign language. I still complain to Yahoo! Company about Yahoo messenger's programmer is very bad, because of webcam, also it always crash often more on all WIndows XP, Vista and 7 RC1.

So I switched to skype for webcam which is better than yahoo messenger. MSN, Camfrog, Oovoo, and skype with webcams are better than Yahoo messenger.

I still use yahoo messenger for chatting.

Thanks,

Gameboy

yes I already tested on yahoo messenger on all of windows XP, Vista, and 7, then it is Yahoo messenger's programmer is wrost ever.

I will give you an example: One game supposed to be good right on computer, right? But a few hours later... one game keep crashing on the computer. It is not Windows' fault. It is one game's programer is very bad.

I do remember I played Disney's Cars on my old computer. It always keep crashing on my computer. I already passed it on the game at end of the game. I removed it and never play it again.

gameboy1977 said,
yes I already tested on yahoo messenger on all of windows XP, Vista, and 7, then it is Yahoo messenger's programmer is wrost ever.

I will give you an example: One game supposed to be good right on computer, right? But a few hours later... one game keep crashing on the computer. It is not Windows' fault. It is one game's programer is very bad.

I do remember I played Disney's Cars on my old computer. It always keep crashing on my computer. I already passed it on the game at end of the game. I removed it and never play it again.

what?

jase chaos said,
what?


Hes saying he likes skype because he can use sign language via video chat feature. And that skype is more reliable then the competitors since the competitors always crash for him, thus he is unable to fully communicate with who he wants to.

Sumeet said,
Hes saying he likes skype because he can use sign language via video chat feature. And that skype is more reliable then the competitors since the competitors always crash for him, thus he is unable to fully communicate with who he wants to.

Oh... well, I'm glad someone here types in English.

jase chaos said,
Oh... well, I'm glad someone here types in English.

English is obviously not the posters first language, maybe if you practice being less of a jack ass and re-read it a few times it'll make some sense to you.

That goes for both jase and TechGuyPA

.hasan said,
English is obviously not the posters first language, maybe if you practice being less of a jack ass and re-read it a few times it'll make some sense to you.

That goes for both jase and TechGuyPA


+1

Good ol' Yahoo Messenger has been crashing for about as long as it's been around... At least, with me anyway. Maybe just bad luck though...

jase chaos said,
Oh... well, I'm glad someone here types in English.

Fine, why don't you ask him what his mother tongue is, and learn HIS language then communicate with him in it. Don't be a dick.

wow this is actually pretty serious. hopefully some kind of agreement can be made. I'd still like to drain ally my skype credit by then.

TRC said,
What did ebay want with Skype anyway? What a stupid purchase...

I believe to "integrate" it with the whole eBay 'experience' which they never actually tried to pull off. Skype just promoted itself.

DeltaFalcon said,
I believe to "integrate" it with the whole eBay 'experience' which they never actually tried to pull off. Skype just promoted itself.

The functionality was integrated into eBay...hardly anyone uses it though.

The Burning Rom said,
The functionality was integrated into eBay...hardly anyone uses it though.

Therefore wasn't a part of the experience. :P

denne said,
Gotta love lawsuits, eh? They make the world such a warm n' fuzzy place to live.

I am hereby sueing you for calling me warm 'n fuzzy.

:D

June 2010...over a YEAR from now...and this is supposed to represent "in danger of"...well...ANYTHING?

What a joke...and an utter non story.

excalpius said,
June 2010...over a YEAR from now

You posted that comment the first of August. June comes before August with July in between, a whole sixty one days or 16.71232876712329% of the year (assuming a non-leap year). Methinks you need to check the calendar.

excalpius said,
June 2010...over a YEAR from now...and this is supposed to represent "in danger of"...well...ANYTHING?

What a joke...and an utter non story.

says MR. know it all

excalpius said,
June 2010...over a YEAR from now...and this is supposed to represent "in danger of"...well...ANYTHING?

What a joke...and an utter non story.


Excalpius, I imagine you'll need surgery with a foot that deeply inserted into your mouth.

Besides, 10 months isn't much when hundreds of millions of users may be affected. It's not exactly like the shutdown of e.g. World of Warcraft.

Jugalator said,
Besides, 10 months isn't much when hundreds of millions of users may be affected. It's not exactly like the shutdown of e.g. World of Warcraft.

if WoW shut down youd see the largest mass suicide in history

Neoauld said,
if WoW shut down youd see the largest mass suicide in history

I laughed. But then I realized that what you said is completely true.

Dwarden said,
it's time for Google to step in and take over :)

Google does not need it, they already have a lot of apps that have the same functionality.

Quikboy said,
If you want Google to further invade your life, be my guest.


as long as they offer me what i need for acceptable price and with good quality i'm not going to complain

be my guest if You can beat Google

M2Ys4U said,
I'd rather have Google replace eBay than Skype. eBay sucks balls.

Thats the first time i've ever heard someone hate on ebay..

I won't be sad to see skype go. Maybe it will stop those old people talking about this wonderful new technology where you can get free calls.

"Yes Nan we have had it for years...

_dandy_ said,
So what's the newfangled, comparable alternative you're suggesting?

I guess he's talking about MSN/WLM, but it doesn't have conference-call ability, when you're talking with more than one person simultaneously.

х.iso said,
I guess he's talking about MSN/WLM, but it doesn't have conference-call ability, when you're talking with more than one person simultaneously.

You should try this program called oovoo.. its brilliant!

nocture said,
Spending 2.6 Billion and not getting everything in the "package"? Thats just stupid

I agree, eBay obviously when they bought it, they thought that they will make a lot of money with Skype, well that's bad management and now they will lose everything that they invested.

cabron said,
I agree, eBay obviously when they bought it, they thought that they will make a lot of money with Skype, well that's bad management and now they will lose everything that they invested.

I wonder if this has anything to do with eBay looking to sell Skype but rejected Joltid's offer to get it back...

Could be looking to settle...

nocture said,
Spending 2.6 Billion and not getting everything in the "package"? Thats just stupid

Yeah, it does seem stupid. Nonetheless, I hope this can be resolved soon, without the court battle.

DeltaFalcon said,
I wonder if this has anything to do with eBay looking to sell Skype but rejected Joltid's offer to get it back...

Could be looking to settle...


Will they put Skype up on eBay for sell? heh

"The shutdown of Skype would affect at least 480 million users, more than that of Facebook."

Wow, that won't be nice. Skype is a cool proggie and I'd hate to see it go.

No need to apologize. If you didn't get the news from him, then he essentially wasn't the one who contributed to you specifically.

dead.cell said,
No need to apologize. If you didn't get the news from him, then he essentially wasn't the one who contributed to you specifically.

Exactly! I STILL cannot understand the mentality of people demanding credit for second-hand news that they had nothing to do with and is freely available online for anyone who notices it.

Sad mofos...

It̢۪s not going to happen. This reminds me of a few years ago when similar articles where saying BlackBerrys would stop working. With a user base as broad as Skype they will develop an alternate technology. What Skype does isn̢۪t cutting edge technology and there are a number of other ways to do a global catalog with client-to-client communications, such as the way IM networks work, many of which already include voice support. Joltid just hopes they have Skype over a barrel and is trying to get more money out of them. It is just a question of what will be cheaper for Skype, building their own method or paying off Joltid.