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Licensing Dispute Threatens Future of Skype
tomlins writes "eBay is faced with the prospect of having to close down the hugely popular VoIP app Skype due to its reliance on proprietary code still owned by Skype's original founders, who are threatening to pull the plug on the licensing agreement they have with eBay."
eBay paid $2.6 Billion for a dinky little 8MB program, and don't even bother to make sure they got everything?
Wow.
cough cough Ekiga !!!!!!! cough
It seems to me that it would not be that hard to just replace the code that is a problem
1. Provide a good service, a tool, a format.
2. Make it cheap.
3. Wait 'til everyone uses it because it was cheap.
4. Jack up the price.
5. Profit.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Why would the founders of Skype be threatening to revoke the licensing agreement? What is their side?
And why would eBay pay billions of dollars for something without some guarantee that they'd be able to run it for a while?
This is like a super-sized version the story about the music industry claiming that it's ridiculous that people would think they could forever listen to their DRM music.
On an individual level, people allow themselves to be screwed for a few dollars at a time, just to be able to listen to the music but - paying more than 2 billion for most of something without a contract ensuring that it's not a total waste of money? Wow.
Then chuck out the propriety code and make it work with open standards. Or if that does not exist, create an open standard and do the first reference implementation. I'm assuming e-bay has the right to distribute the executable under the Skype name.
A picture is worth exactly 1024 words.
Didn't we just have this a few years ago... oh no, that was SCO forgetting to actually buy UNIX from Novell. I wonder how many other companies will turn out not to own the software they think they own?
1. Provide a good service, a tool, a format.
2. Make it cheap.
3. Wait 'til everyone uses it because it was cheap.
4. Jack up the price.
5. Profit.
eBay paid $2.6B for Skype, so I think the handful of people that created it made a (ridiculous) profit. eBay bought Skype and let the founders keep the rights to part of the software which is amazingly stupid IMHO. TFA doesn't even say why Niklas Zennstrom and Janus Friis revoked the license, but after getting $2.6B they better have a damn good reason. This blog seems to imply the founders want to buy Skype back. [1]
[1] Preview didn't show the line, so just in case:
http://www.readwriteweb.com/archives/skype_as_we_know_it_may_not_exist_much_longer_ebay.php
Some privacy policy Slashdot.
If Skype will die, I will not cry. There are many open course apps using open standards, and example of such app is Ekiga. I see however a little problem - most of population does not know much about open source. Of course, many people know about Firefox, but the less tech savvy users are simply afraid of "messing" with "strange" software (i.e. not installed on their PC when they bought it. Some people simply trust more the software that costs something, even though they use a pirated version). Finally, Firefox has only 20% of the market share, os we can say that there is only 20% of users willing to adopt Open Source. That is not because they do not like Open Source, but they do not know it and therefore are afraid of it.
but I agree with him.
Countless have lost money on eBay due to gross negligences of eBay and Paypal.
Now its payback time. Thanks guys (Niklas Zennstrom and Janus Friis).
They should open-source Skype and let the community work around the problem.
"Ha ha"
proprietary code. what else would you expect?
Remember that before they started Skype, the founders of Skype created KaZaA, notorious for its immense crapfest of malware. I'm not at all surprised that they're trying to screw over eBay now.
Of course, not that eBay is much better...
Ekiga!
(On the GNUphone.)
http://rocknerd.co.uk
I sometimes use Oovoo instead of skype, as it can do 3-way video calling for free, and more-way calls if one of you has a paid account. It's not quite as good as Skype for 2-way calls, but the 3-way video is nice to have.
On Linux, Skype is buggy as hell. It would be actually good if they go away and someone like Google step in with something functional. They need it anyway for their Chrome OS.
839*929
Really now, what could be more insignificant than skype? An INTENTIONALLY non-standard, incompatible, non-interoperable protocol with increasingly bloated closed source client side bloatware / spyware needed to run it, and a laughably bad "[fake] security through obscurity" design.
VOIP is the future of audio communications, and to be truly of value to society it must be based upon open standards with a healthy competitive environment of multiple competing implementations to ensure that there is and will remain a diversity of portable high quality clients. SIP with ZTRP may not be perfect, but at least it is an open standard, with freely available cross platform implementations, and features true and verifiable security. Skype on the other hand has no meaningful security since the server side presumably has (for no good reason) access to all of your communications, and the given the closed source / unpublished protocol you can't be sure what kind of spyware / malware / insecure software is running client side.
Granted some of the open source standard SIP protocol and H.323/H.263 conferencing clients haven't been all that high quality or made all that portable in the past, but that has changed or will soon change. High level portable software development and runtime environments like JAVAFX, JAVA, CLR, QT, et. al. will make it easier and easier to put together a "pretty" and "user friendly" portable VOIP / video conferencing application in just a few lines of code. Features, GUI design, portability are hardly going to be reasons for anyone to want to run someone's non-standard and non-interoperable IM / VOIP / Video conferencing software as more secure, stable, interoperable, portable solutions emerge. So the only thing that would possibly interest anyone in using a proprietary / closed / non interoperable solution would be P.T. Barnum style "screw the consumer" marketing, and iPhone style walled garden censorship of better software / protocol alternatives.
Didn't we gladly evolve the internet beyond the stage of non interoperable non standard protocols like the AOL of the past decades in favor of ubiquitously available standards compliant communications protocols like IP because we realized that things like email, web browsing, et. al. are basic forms of communication and MUST be standardized in open fashions for the good of everyone? Why would we continue to perpetuate the same kind of defective / incompatible / insecure by design protocols like Skype or several of the IM systems like MSN / Yahoo et. al. when we have easy choices to pick better alternatives that will let EVERYONE communicate securely and openly.
Just look at the other news stories of the day about the notorious insecurity, instability, and bad portability of other closed system internet media applications like FLASH. Don't let more of these kinds of crapware / bloatware protocols infect (literally) the internet and create a tower of babylon where nobody can communicate because everyone is speaking some different language / protocol.
Isn't it a little strange that we're in an era of ubiquitous VIDEO communication on the internet with systems like Silverlight, Hulu, YouTube, et. al. and yet something as simple as portable, secure, non-bloated IM and VOIP clients yet eludes us to the point that anyone CARES about Skype?
Skype was lovely when it was new, but compared to open SIP technology, forcing all your contacts to install some closed client is just embarrassingly retro. It's like ICQ and AIM back in the day before Pidgin and Trillian.
If we get out of this with an voice-supporting XMPP client, it will be worth it.
I used to communicate with my wife when she was out of town on business. The fortune 500 co she worked for had no problem letting her install Skype on her laptop, so it worked for both of us - free computer to computer calls when she was in Turkey, Argentina, Hong Kong, etc. Our biggest problem was the time zone difference.
Then about a year ago the company's IT department decided that Skype was "bad", and disabled it on all company laptops. My solution? An ubuntu live CD and ekiga. Now we can communicate again when she's away.
Seven puppies were harmed during the making of this post.
these guys are shooting the goose that laid the golden egg. ebay will merely strip out the offending code and implement their own solution. maybe a little painful but i can assure you they aren't throwing up their arms and saying this isn't fixable, lets give up on that 2 billion bucks we spent...
If you mod me down, I will become more powerful than you can imagine....
It's not about Ekiga or any other specific software - it's about open protocols, codecs and network service.
There are plenty of great softphones around, even integrated in devices.
My Nokia has a SIP VoIP client pretty nicely integrated with the phone. It's not open source but it's standard compliant. I can make or receive calls from anywhere I find a free WiFi - provided I can reach my server through it.
I can also use an Android phone or a laptop - with the added advantage of being able to text chat over Jabber and make the call over Jingle. The Jabber protocol has the extra advantage of federation - everyone can have an account in his own domain, just like mail. No need to have agreements between provides like in SIP or trust hierarcies in H.323
Could this be used for paving the way to the end of free-of-charge services, or to make other such changes to the service?
If you try to turn a free-of-charge service into a paid service for an existing and established user base, the users will revolt, but if you first threaten that you may have to take away the service altogether and then go "ah, but we just might be able to save it if you start paying us so that we can afford the new licensing costs...", business users might be relieved that they can avoid the greater one-time expense of switching to a different system and be much more willing to start paying for the service.
eBay got DRM'd
http://slashdot.org/story/09/07/30/1736209/RIAA-Says-Dont-Expect-DRMed-Music-To-Work-Forever
On a related note: there used to be this nice open source skype-alternative (using SIP and all that) called openwengo, but i cant find it anymore. the company also offered a flash based SIP client (wengovisio), and a flash-based teleconferencing thing (wengomeetings), but i cant find any of them anymore. quite a pity.
a little side-rant: the person that designed the SIP protocol in such an incredibly NAT-unfriendly manner should be drawn and quartered. I know there are work-arounds, but i blame this NAT-unfriendliness for the rise of skype, and now we're stuck with that nonstandard closed protocol crap. I think it was the glorious idea of incorporating the IP addresses inside the SIP packets, or something like that. sigh.
on a related note: whatever happened to Google's open-source VoIP thingy that incorporated with XMPP/Jabber? I think it was called 'Jingle', but I haven't heard a lot about it since then. And what protocol is Google using for their video-chat in gmail?
I heard from "This Week in Tech" podcast that eBay was dreaming the ebay sellers will put "skype me" to their product pages and let the customers (buyers) call them.
One thing of course, people hates to be called via voice regarding a sell. So, it blew.
You're right. The Ekiga website sucks. Tried looking for a MacOSX version of it, finally was able to find this page... however, the whole experience convinced me to try SkypeOut instead, even if proprietary. (we're dropping landlines at home for cellphones-only, and thus need cheap landlines calling capabilities, SkypeOut is 3$/month with illimited call in Canada/USA... sounds like it can work for us (yeah, I know, there's the 911 thing to take into account))
Animoog.org
Has anyone successfully used Phil Zimmerman's Zfone with Ekiga? If the encryption works for voice and chat it could be a great free open-source alternative to Skype.
The original founders sold Skype to eBay for US $2.7 billion. eBay has now written down the value of Skype to US $1.7 billion, and are planning to spin off the company next year. Along come the founders and threaten to cripple Skype. It seems to me that this drives the potential price of Skype much lower than even the $1.7 billion. When the public offering is made, the original founders come in, buy the now really cheap stock, and then somehow change their minds about licensing their technology for Skype. The price goes up up up, and the guys make another couple of billion! Brilliant....
No wonder eBay's lawyers couldn't pay attention during the meetings.
Don't mess with eBay boys from brazil !!
Good point. Once again proves that it pays to do your homework.
Death to skype and to ebay.
Here's why they'll NEVER open-source skype: http://gigaom.com/2009/07/30/will-skypes-founders-put-the-kibosh-on-ebays-ipo-plans/ http://www.reuters.com/article/technologyNews/idUSTRE56U03D20090731 http://www.australianit.news.com.au/story/0,,25862165-5013040,00.html
GJ eBay...goodluckwiththat!
It reminds me about Leo Getz in Lethal Weapon 3 when he talks about the hospital after his exam...
I'd love to see open source projects up-to-scratch in comparison with their licensed technology. Got a few OSS projects to launch on top of such a platform...
I guess they'll have to make a negative outcome rating on the seller, and attempt to get resolution through the.....oh, wait....then skype will just neg them back and we already know how the "resolution" process favors the sellers. I guess eBay is just out of luck. What a shame.
The problem with quotes on the internet, is that nobody bothers to check their veracity. -- Abraham Lincoln
Micro-transactions (Paypal) over what's effectively one's own telecom network (Skype).
This is why I never liked Skype, proprietary. I find Gizmo and other 'real' Voip apps using open standards much more flexible. The irony here is that corporate America continualy cites it's of licensing when talking about open source. Though I'm sure this will go down as a bone-headed move by a stupid lawyer who failed to get the contract right.
Die skype, I hate you! we don't need no stinkin' propietary Voip protocols. Your client software is a stinking pile of poo! Thanks for gumming up many a workstation for me. No tears here. Pull the plug.
This would be a good time for Skype to switch to open source and open protocols. They make their money on providing landline access and voicemail, so why do they even bother making all this proprietary stuff?
Well I guess they always have the option to use something Like IAX2 and then rework iLBC for jitter control. It would make a heck of alot of sence and would bring IAX more attention for thous little things and heck possibly even a decent skype way to connect to a asterisks PBX.
All thous skype type devices could be converted over to IAX. After all skype is more hype and has alot of name behind it and everyone knows it if they change it , yes it would hurt a bit but if they do it now it will hurt less.
I am all for the IAX2 thing I just wish there was more firmwares for it and better hardwares like ATA's that support it cause its a decent way to cut through.
Comment removed based on user account deletion
There are occasional rumors of Meg Whitman getting into politics. She was often mentioned as a possible running mate for John McCain. Keep this little fiasco in mind when you go to vote. This makes a $400 hammer look like a real deal.
You ever use IBM's *first* personal computer, the model 5100?
I was just try out Ubuntu 9.10 pre release and it is all there under the Open Source Licence (GPL) I just blogged about it. www.amendt.blogspot.com
It's not what the article says (though certainly there seems to be a bit of slant to it); it's what the article doesn't say.
It doesn't give a single clue as to the basis for the license dispute. They make it sound like the rightsholders just one day woke up and said "you know, I think we'll just stop licensing this to you", which is almost certainly not true.
It's unlikely that this makes a legal difference... but then again the entire article is about how badly Skype needs these licenses, which also makes no legal difference. (Well, I should say probably makes no legal difference, depending on details of how the relationship between the companies and the licensed IP got to where they are... about which TFA again gives no information.)
Ebay + buyer + not getting what they paid for. Sounds typical.
Imagine selling your company for an overpriced fee of 2.6 Billion, then a few years later delivering a deliberately fatal blow to the people who made you billionaires. These people have no conscience. They seem like greedy bastards. I think they should end up on the black list of everyone in the technology industry. There is obviously a bait and switch going on here.
It's got ease of use, but Skype and its proprietary nature, the closed factor, and the overwhelming way they try and obscure everything the program does... I can't trust it and would rather go with something SIP based. At least with SIP you know what's going on and its interoperable with different vendors.
If anyone bothers to check the actual press release on the Ebay website about this they may notice the date on it.
If all you need is domestic USA calling, Boost mobile prepaid has unlimited talk for $50 a month, that includes walkie talkie like push to talk with other Boost people, text messaging and 5 gigs a month data/internet (albeit a slow network). That's the cheapest all around deal out there now that I am aware of.
One of my good friends was involved with development of the Skype code base a number of years ago. He mentioned on several occasions that they had to take "healthy chunks" of GPLed code and "safely integrate"(slightly modify) it in order to create what's the core of the codec and protocol handling in the Skype client now. He's been stressing about that at times and I have no reason to doubt him. Hopefully someone will take legal action against Skype at one point and dig up what they are hiding. On the other hand, SIP based VoIP has become so popular lately that Skype may not be around for long anyway.
You pay $2.6 billion for a company and you leave the rug under you so it can be yanked out by the person you paid the $2.6 billion too effectively killing your business? What dumbass agreed to that?!?!
I find this story slightly amusing, in a schadenfreude sort of way. I've always hated Skype for being a proprietary solution to things we already had standards-based solutions for, and getting hugely successful at it.
To add insult to injury, getting half of the world locked in to a proprietary solution and killing off interoperability has made the Skype folks very, very rich.
But now one of the entities that contributed towards these assholes getting rich got burnt by them, badly. Hah. I hope they've learned from this and that other people take notice.
Please correct me if I got my facts wrong.
Anything that screws the electronic bay of thieves makes my day. It does seem pretty sleazy that a couple of hackers could sell something for 2.6 billion bucks and then have the right to tell e-bay that they can't use it, but if e-bay was so stupid to make that deal, so be it. Of course, everyone except e-bay realized that they had overpaid for Skype at the time, but I for one did not realize that they over paid and bought something that they didn't have a right to use. I hope some lawyer looses his over compensated job over this one.
I'm an American. I love this country and the freedoms that we used to have.
Hold the phone, they're pulling the plug.
Google Talk uses a distributed(P2P) conduit for carrying free video calls that effortlessly penetrate firewalls bi-directionally?
Last I saw, Google had only added voice and video to a chat room program that relied on a central servers and died at the firewalls of uncooperative network administrators.
So you're saying that Grandma can get Google Talk working as easily as Skype and we can video chat with the grandkids? Really?
There's a hint somewhere in today's GrokLaw that this may be due to the outcome of a legal case filed in Britain awhile back that has recently become final. I don't remember the original case, so I can't say, but it looks like EBay took the original agreement and tried to extend it beyond all reasonable interpretation, so the British court canceled that part of the agreement.
N.B.: I'm doing a lot of reading between the lines here, and the source quoted wasn't one of the parties to the original dispute, and may not be knowledgeable, but that's what it seemed to be saying.
I think we've pushed this "anyone can grow up to be president" thing too far.
At the time of the Skype purchase, eBay was desperately trying to break into the China market against TaoBao (or something like that) that was beating them. Meg The CEO, in yet another display of ineptitude, after a long business trip (a.k.a vacation) in China got a hold of a rumor that Chinese auctioneers preferred to talk on the phone rather than email via anonymous email (which is how eBay was able to keep potential gray market auctions low) and that Skype was going to allow the buyer and seller a better route of communication and allow eBay to dominate China. How no major executive foresaw that once the buyer and seller could communicate by Skype then would just close the auction and negotiate offline and avoid seller fees; everyone but the powers that be saw this coming.
The asking price of 2.8 billion + 2 billion (or something ridiculous like that) if they met some internal goals (it was as insane as it sounds and at the time every blog, publication, news source was laughing outloud). Needless to say Skype missed their goal gloriously, did not get 2 billion and at that time it came out that in yet another stroke of brilliance by Meg the underlying technology was not part of the 2.8 billion. The only people who benefited were the founders of Skype who must still be laughing.
If I am buying a chat program for 2.8 billion I better be getting everything... anyhow, all this is public knowledge and a sad chronicle of how incompetent CEO can keep making mistake after mistake and be seen as successful because the company was hugely profitable despite their best efforts. For the record I sold my stock in eBay as soon as I read about this mess and it was at 44$usd at the time, it fell to almost 20$usd when Skype was reported as a write-down (a.k.a. complete loss) in the 10Q and never quite recovered.
Fastest way out for ebay would be to just convert the clients to SIP and be done with the entire mess.
I've heard from several sources independently that there are some initially GPL licensed but modified pieces of code in Skype, at least on the client side, and that if someone gets them for GPL violations they are apparently screwed big times.
Item was not as described. Some items missing from order. Listing was incomplete and misleading...
Ask Me About... The 80's!
http://www.voip-news.com/feature/10-skype-alternatives-091707/
beware he who denies you access to information for in his mind, he already deems himself to be your master (SMAC-ish)
Boy, that Meg Whitman, the "I'm no lady" woman who arranged the purchase of SKYPE while she ran roughshod over eBay as its CEO, is now planning to run for Governor of California. You folks think you have it bad NOW... HA!
Should we contact Zennstrom or Friis to get our cut?
Quietly publish the source code in the contract's fine print?
Yeah,
They produced Kazaa the mother of all malware
Then Skype which is wonderful (and they promised to to be malware free this time) but they sold it without selling the core technology so they basically screwed the buyer (eBayer)
Then they push the big red button ...
Wow ...
The're good but I dont like them. The only positive thing is that ebay can now see how it feels when having a problem with a buyer.