Skype Outage: A Sign of Deeper Trouble?

Posted by: Olga Kharif on August 16, 2007

We’ve all been reading about the massive outage that’s struck Skype. The company blames it on a software glitch. I wonder if it could be a sign of deeper trouble.

For the past year, Skype has been courting small- to mid-sized businesses, and doing that fairly successfully. Even large companies like Intel use Skype. Yet, all this time, analysts have been telling me that Skype isn’t reliable enough for business use. Well, guess what? Perhaps it isn’t.

I wonder if the outage is a sign that owner eBay isn’t putting enough resources into Skype anymore to keep it healthy and growing. It seems like a lot of people I used to talk to at Skype have left. And the site’s user growth has slowed: Between the first and second quarters of this year, Skype’s user base only grew 12%, as compared with 20% growth in the same period of 2006. While eBay deserves some kudos for finally getting Skype to profitability, these trends are troubling.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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