Ebay May Be Forced To Shutdown Skype
Because of a licensing dispute with Skype, a popular Internet telephony service, eBay has revealed that it may become necessary to shut the facility down. This causes concern for more than 40 million subscribers around the globe who use it for business purposes and for equally important personal calls to relatives and friends. Since Skype carries about eight percent of international voice traffic, it is the biggest provider of this kind of service, it dominates Internet telephony, and the application is bundled with more than 50 brands of phones.
When eBay purchased Skype in 2005 for $2.6 billion, the agreement did not include a core component that powers the software. eBay now licenses this technology from Joltid, a new company formed by the founders of Skype, who want to revoke the licensing agreement. The case is now before the English High Court of Justice, and eBay wants to compel Joltid to permit their use of this component to continue. At the same time, eBay has notified the US Securities and Exchange Commission (SEC) that it will probably have to abandon Skype altogether.
While eBay is trying to develop software that would be a workable alternative to the one licensed via Joltid, it also points out that this attempt may be unsuccessful and would also be costly. If eBay does not prevail, loses the right to use Joltid’s software, and cannot produce a suitable alternative, it is clear that running the telephone service as it is used today may become impractical.