Is Skype shutting down?

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Photo by Titochavi
Photo by Titochavi
This weekend’s press contained numerous stories suggesting with varying levels of panic that eBay was about to close Skype down.

The problem is the dispute between Skype and Joltid, the company which licenses the software on which Skype runs. Joltid attempted to terminate the agreement; Skype promptly sued Joltid. Joltid counterclaimed, alleging that Skype had broken the licensing agreement and so forfeited the right to use the software. The case is currently scheduled to come to court in June 2010.

In an SEC filing last week, eBay said:

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.

There are a lot of ifs in that statement, which is fulfilling its duty of providing a worst case scenario. Moreover, it’s nearly a year before the court case begins, and you can bet this won’t be a five minute case. So at the moment, I’m with Phil Woolff from Skype Journal, who says Don’t Panic!:

Joltid has to prove they were harmed by whatever they claim Skype did.
Joltid has to prove the proper remedy is killing the goose that laid Joltid’s golden egg. …
Skype’s busy making new code. …
So even if Skype loses in court, users keep on Skyping, Skype keeps making money, and everyone’s happy except for the people at Joltid.

We ought to have learned by now – never believe all the hype about Skype.

8 Responses

  1. Well, what can we say…………………..

    I’ll just pop down the road & buy 48,000 Rolls Royces’, must try to remember to make certain I get the last nut on them that makes them MINE & get a receipt for their FULL ownerships.

    How on earth can an corporation like ebay.Inc make such a fatal error when spending, what was it, £1.2 bln.
    Whoever signed off the purhase deal, no matter how near the top…………they should go NOW….

    The Picture above says it all!!!!

  2. #1 is correct, whatever genius decided not buying the underlying software needs his legs slapped.

  3. Whoever signed off the purhase deal, no matter how near the top…………they should go NOW….

    I think it’s a bit late Gerry – Meg Whitman is long gone 😉

  4. > Joltid has to prove

    Nice spin but not really. The drama will play to proving “Skype had broken the licensing agreement”. And Joltid’s attorney’s will have Microsoft’s, IBM’s, etal wins in similar situations to draw upon.

    Prediction: eBay/Skype will knuckle under and make a Dibbler (CMOT, Terry Pratchett’) settlement, in order to get the IPO bucks.

    > Chris Dawson
    > Meg Whitman is long gone

    That’s cold.

    Correct though.

    .
    “The BUCK STOPS here!”
    Harry Truman
    https://www.trumanlibrary.org/buckstop.htm

  5. It’s all very convenient, Skype’s founders flog Skype to eBay and make a fortune, Skype’s founders offer to buy Skype back but won’t cough up what it’s worth and suddenly lo and behold Skype’s founders own Joltid who then threaten to pull the rug from under Skype’s feet.

    I’m not saying they planned it in advance…. but just how many times can they screw eBay for the same company?

  6. Well at least someone got some money out of eBay. How could eBay have been so foolish?

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