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Skype silenced by software bug

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KAI RYSSDAL: Here’s an idea to make your summer more enjoyable. Turn off the phone. Sounds kinda nice, right? And it is, if the turn-off is voluntary. It’s another thing entirely if your business depends on your phone line. And it goes away without notice. A lot of companies have switched to a cheaper way of making their calls. Over the Internet, with a service called VOIP — Voice over Internet Protocol. Skype is probably the most popular company out there offering VOIP. Marketplace’s Lisa Napoli reports it suffered a pretty unpopular glitch the last couple of days.

Lisa Napoli: Eight million or so people use Skype around the world every day. What’s happened over the last 24 hours or so is the Internet equivalent of a phone line gone dead.

The company’s blaming the problem on a software glitch. And it says on its blog that it isn’t because of a hack.

But Tim Boyd of American Technology Research says when you have so many people using this kind of new system.

Tim Boyd: Stuff does happen.

Boyd says over the last few years, Skype’s become a basic business tool for small companies. Since it lets you call computer to computer, anywhere in the world, for free. And from a computer to a regular phone much cheaper than from a traditional landline. If you rely on it, even a bit of downtime can be a problem, as a lot of users have found out:

Boyd: These guys basically had 12-24 hours where they couldn’t use Skype any more, which is serious.

It may act like a phone, but that doesn’t mean Skype’s as reliable as one. Of course, the company has other problems. Its quarterly revenue doubled over the last year to $90 million, but it still doesn’t make a profit.

A couple of years ago, online auction giant eBay bought skype for more than $2.5 billion dollars. And industry analyst Glenn Fleishman says . . .

Glenn Fleishman: It’s still unclear how they’re gonna monetize Skype. I’m not sure it was a smart buy.

Seems like at a time when this Voice Over Internet Protocol technology is so hot, Skype must have some sort of potential — 220 million people have reportedly signed up for accounts, even if they don’t all use them.

In Los Angeles, I’m Lisa Napoli for Marketplace.

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