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Skype may face alt+ctrl+shift button

Millions of internet users who use Skype could be forced to find other ways to make phone calls after parent company eBay said it did not own the underlying technology that powers the service, prompting fears of a shutdown.

world Updated: Aug 02, 2009 02:40 IST

Millions of internet users who use Skype could be forced to find other ways to make phone calls after parent company eBay said it did not own the underlying technology that powers the service, prompting fears of a shutdown.

The internet auction company paid a total of $3.1bn for the telephone service between 2005 and 2007 and is now locked in a legal battle with the technology's owner, Joltid, a company owned by Skype's founders. That may make it impossible for eBay to follow its plan to float Skype on the stock market next year – and give one of Skype's creators, Niklas Zennström, the upper hand in any negotiations. Zennström has been angling to buy the company back.

Skype is a big money-earner for eBay. It has more than 480 million registered users and revenues of $170m for the last quarter. It does not need telephony systems as people's own computers route traffic over the internet; its only significant costs will be payments to telephone operators where calls exit the internet, for which Skype's customers pay.

eBay says that it filed a claim against Joltid in the English high court in March, and that Joltid, which owns the key technologies for Skype, then "purported to terminate the licence agreement". Without the licence, Skype may be worthless to eBay because it will be unable to run it legally – or might have to pay swingeing licence fees to keep it going.

However, eBay's legal counsel insisted that "our plans to separate Skype have not changed".