Will Telcos Buy JoltID and Shut Down Skype?

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Will Telcos Buy JoltID and Shut Down Skype?

Skype Cofounder Niklas Zennstrom Most Important Man in Telecom - Again

Niklas Zennstrom is one of the most important people of the century in the communications space. Skype, the company he cofounded is responsible for enabling hundreds of millions of people to communicate for free. Moreover Skype allows a person to communicate over HD quality with full video for free. The company he ran was also responsible for tens of billions of dollars of lost telecom revenue and Zennstrom's Skype is despised by carriers like no other company.

Just as Apple came into the mobile phone market with a simple and elegant interface and subsequently began to take it over, Skype too was very late to the VoIP game and became entrenched because their software was easy to use and the GUI had a really cool look about it.

But Zennstrom's influence on technology faded after he was let go from Skype by parent company eBay and his most recent venture Joost has been doing poorly relative to Hulu and other competitors.

But Skype founders Zennstrom and Janus Friis control Joltid, the company responsible for Skype's crucial p2p software. Recently JoltID has said Skype has breached their license agreement by divulging confidential information about the technology pursuant to orders from U.S. courts. I find this shocking as a good deal of license agreements have a clause which allows companies to comply with local laws and court orders. It is surprising that such a stipulation was not added to this contract by eBay lawyers.

Assuming the above is accurate - and eBay doesn't seem to be disputing the fact, the world's largest auction site is in some trouble as JoltID is playing hardball. As eBay negotiates for continued access to the p2p technology it is simultaneously trying to create its own p2p software. It is unknown if they will be successful in either endeavor.

This leads me to a crucial thought. Who is the number two in the VoIP software market? I know all the players - Yahoo, Google, etc - but really - who comes to mind as the solid number two behind Skype? Really no one does - at least not to me. I would imagine Google would eventually take the market over between its Wave and Voice products but it would take time.

Can you imagine the disruption in the market if Skype were to stop working?

One wonders how much money global telcos are bound to gain if Skype were to shut down? Ten billion dollars perhaps? More?

This is an interesting dilemma for eBay/Skype and for global telcos an opportunity of a lifetime. Is JoltID worth more to Skype who gives away service for free or is it more valuable to a few hundred telecom operators (who would shelve the technology) charging an average of 10 cents per minute?

I would be shocked if some leading telcos aren't courting Zennstrom and Friis as you read this. This story could take more twists and turns as time goes on. I look forward to hearing more details and reporting from next month's ITEXPO in Los Angeles. Stay tuned.



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