Skype hit by outage, says it is investigating

By Dow Jones Newswires-Wall Street Journal
Posted Dec. 22, 2010 at 3:03 p.m.

Internet phone and video service Skype went down in a global service outage on Wednesday, underscoring a weakness of the free online communication tool.

Skype, partly owned by Web retailer eBay, said some users were having problems signing on. Users in Asia and Europe complained of the outage on social network site Twitter.

In its Twitter feed, the seven-year-old company apologized for the disruption and said it was investigating the cause.

Dropped calls and service quality have long been seen as a weak point for Skype, which offers free voice and video services between users as well as low-cost calls to landlines. It now faces competition from rival online phone providers such as Google Inc, which lets its users make calls through their Gmail accounts.

Skype is expecting to raise up to $1 billion in an initial public offering, sources familiar with the matter told Reuters last month. One source has said the IPO will likely come some time next year.

Skype was founded in 2003. Online auction and e-commerce website eBay Inc bought it in 2005 for $3.1 billion.

In November, eBay sold a majority stake to an investor group including Silver Lake, Canada Pension Plan Investment Board and Andreessen Horowitz for $1.9 billion in cash and a $125 million note. EBay retained a 30 percent stake.

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