Skype's Bad Timing

Carl Weinschenk

What's the last thing you want to have happen during an open house for the sale of a home: A burst pipe? A leak in the roof? The neighbor's kid inviting over 30 or 40 of his or her best buddies for a party in the front yard?

That's pretty much what happened to Skype last week. The company at one time was priming for its IPO while hearing about a lawsuit and watching its infrastructure implode.

A blog I posted last week-based, in part, on a New York Times feature-was intended to describe a highly unique company at a crossroads. On one level, Skype is unbelievably successful: In a technical environment of monumental competition and intense clutter, it has carved out a profile the likes of which only a few companies enjoy. On the other, most of those subscribers are there because the price is right-or, to be more precise, there is no price. The question is whether the company can pivot and reinvent itself to the extent that the smart money buys into the IPO. Needless to say, not everyone is convinced.

This makes the outage that impacted the service truly bad news. In addition to making the company look amateurish-fairly or unfairly-it probably is causing potential investors to take a hard look at Skype's technical underpinnings. Dan York does just this at Disruptive Telephony.

One of Skype's strategies is to become more of a player in the business market. York's explanation of Skype "supernodes"-Skype software running on computers not protected by a firewall and acting as point-to-point (P2P) agents-certainly could lead to IT managers thinking twice before adopting the technology for anything but the most mundane communications tasks, or not at all.

The outage and a patent suit about the P2P technology filed by Gradient Enterprises means that this has not been the most heartwarming of seasons for the company. It isn't prudent to count a company with so many subscribers out, however. The next few months will be interesting based on the IPO. The outage and, to a lesser extent, the lawsuit, have made them even more so.

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