Skype Limited: Wikis


Note: Many of our articles have direct quotes from sources you can cite, within the Wikipedia article! This article doesn't yet, but we're working on it! See more info or our list of citable articles.


From Wikipedia, the free encyclopedia

Skype Limited
Founded 2003 by Niklas Zennstrom and Janus Friis
Headquarters LuxembourgLuxembourg
Key people SwedenNiklas Zennström, CEO & Chairman
Industry Telecommunications
Products Skype, VoIP client for multiple platforms
Revenue $115 million
Owner(s) eBay Inc.
Employees 500
part of a series on
Skype Limited

Skype Limited is a Luxembourg based company developing and operating a well-known, popular VoIP computer telephony program. Founded in 2003 by Niklas Zennstrom and Janus Friis, it was purchased by eBay in 2005.



Skype was founded in 2003 by Niklas Zennstrom and Janus Friis, whose main intention was to develop a piece of software which would revolutionize telephone calls. Allowing users to speak to each other via computers promotes the use of the Voice over Internet Protocol and the use of computers in the technologically advancing world. Users are able to talk for free, an incentive to future and present members.

Takeover by eBay

The auction site eBay began talks with Skype in September 2005. [1] On 12 September 2005, it was announced that eBay would purchase Skype in a deal worth approximately USD$2.6bln, in up-front cash and eBay stock. The transfer of ownership began and eBay officially acquired Skype on 14 October 2005.

However, analysts were not impressed with eBay's move, saying: "I don't see a lot of point to eBay buying Skype" [2], or "If eBay were to make this sort of move it would basically be admitting that 'our core market is decelerating". At the time, eBay had been purchasing many companies in moves to boost its market position and increase its annual revenue. However, eBay stated that their intention was to implement Skype into their auction website to allow buyers and sellers to speak prior to bidding and to create a powerful internet environment. Speaking in 2005, eBay chief-executive Meg Whitman said: "Communications is at the heart of e-commerce and community".


Skype Technologies released their first product, Skype, originally as a simple computer-to-computer, or computer-to-telephone program. Support for paid services such as SkypeOut, SkypeIn and receiving voicemail messages allows the company to generate its revenue as well as making local and international telephone calls easier to perform via your computer, sometimes cheaper than other companies' rates for similar services.


Skype Limited has locations around the world including Europe, Asia and the United States. Its headquarters are in Luxembourg.

Skype is available in 27 languages and currently has 100 million worldwide users. [3]

Legal and political aspects

Skype faces challenges from two main legal and political directions: challenges to its intellectual property and political concerns by governments wishing to control the telecommunications systems of the respective countries.

Skype's technology is proprietary and closed to outside review. It is unknown to what extent it can potentially intrude upon other parties' patents and copyrights. It is not unreasonable, therefore, to expect legal challenges from third parties concerning Intellectual Property issues.


Legal challenges

Streamcast lawsuit

StreamCast Networks filed a complaint in U.S. District Court in Los Angeles, alleging theft of its peer-to-peer technology and violation of the "Racketeer Influenced and Corrupt Organizations" statue. The compliant, titled; StreamCast Networks Inc v. Skype Technologies S A, was filed on January 20, 2006 in Federal Court in the Central District of California and assigned Case Number, 2:2006cv00391. The $4.1 billion lawsuit did not name Skype's parent company; eBay when initially filed. Steamcast's lawsuit was subsequently amended on May 22, 2006 to include eBay and 21 other party defendants.

In its lawsuit, Streamcast seeks a worldwide injunction on the sale and marketing of eBay's Skype Internet voice communication products, as well as billions of dollars in unspecified damages.[citation needed]

IDT lawsuit

On June 1, 2006, Net2Phone (the Internet telephone unit of IDT Corp.) filed a lawsuit against eBay and Skype accusing the unit of infringing U.S. Patent 6,108,704, which was granted in 2000.[1]

Political issues

China 2005

For a brief period, SkypeOut was blocked in some regions of mainland China (notably Shenzhen) by the operator China Telecom for undisclosed reasons; it has been speculated that this may relate to SkypeOut's ability to take lucrative international and long-distance business away from the People's Republic of China's state-controlled telecommunications companies.[citation needed]

Skype is one of many companies (others include AOL, Google, Microsoft, Yahoo, Cisco) which have cooperated with the Chinese government in implementing a system of Internet censorship in mainland China. Critics of such policies argue that it is wrong for companies to assist in such policies, which might allow them to profit from censorship and restrictions on freedom of the press and freedom of speech. Human rights advocates such as Human Rights Watch and media groups such as Reporters Without Borders state that in their view, if companies stopped contributing to the authorities' censorship efforts the government could be forced to change.[2]

Niklas Zennström, chief executive to Skype, told reporters that its joint venture partner in China is operating in compliance with domestic law. "TOM Online had implemented a text filter, which is what everyone else in that market is doing," said Mr Zennström. "Those are the regulations," he said. "I may like or not like the laws and regulations to operate businesses in the UK or Germany or the US, but if I do business there I choose to comply with those laws and regulations. I can try to lobby to change them, but I need to comply with them. China in that way is not different."[3]

France 2005

In September 2005, the French Ministry of Research, acting on advice from the General Secretariat of National Defence, issued an official disapproval of the use of Skype in public research and higher education; some services are interpreting this decision as an outright ban. The exact reasons for the decision were not given.

United States, CALEA 2006

In May 2006, the FCC successfully applied the Communications Assistance for Law Enforcement Act to allow wiretapping on digital phone networks. Skype is not yet compliant to the Act, and has so far stated that it does not plan to comply.[4]

India 2006

In December 2006, the Indian government announced it is preparing a crackdown on Internet telephony services, citing security risks and loss of revenue.[citation needed] The clampdown is targeted at outsourcers and other Indian IT businesses that use foreign-owned Internet telephony services, such as Skype and Yahoo!, to cut their phone bills and evade the six percent revenue share and 12 percent tax imposed on local services by the government. According to The Times of India, companies must reveal the names of licensed service providers they purchase bandwidth and Internet telephony minutes from. Companies will also have to undertake that they will not use the services of unlicensed Internet service providers.[citation needed]

United Arab Emirates 2006

Skype was abruptly blocked in the UAE for undisclosed reasons—Skype users in the United Arab Emirates are being blocked from the site, which prevents them from buying minutes for use with SkypeOut and taking advantage of deeply discounted international calling rates. The blockage has been speculated to originate within Etisalat, the only ISP in the UAE.[citation needed]


The Sultanate of Oman has also blocked access to the website preventing users from accessing Skypeout in order to maintain Omantel's monopoly on the telecommunications market in the country.[citation needed] This has also to do with security issues as well as economic ones as it is difficult to monitor the calls made with Skype.[citation needed] Many other Persian Gulf countries pursue similar policies regarding Skype for largely the same reasons.


Skype was found to be guilty of violating the GNU General Public License in one of its for-sale products, the SMC WSKP100.[5]


External links


Got something to say? Make a comment.
Your name
Your email address