Skype Works on Software Flaw Suspected in Worldwide Outage

By Mike Musgrove and Sabrina Valle
Washington Post Staff Writers
Saturday, August 18, 2007

Problems continued yesterday for Skype, an Internet-based phone company, as it tried to patch up a software glitch that left many of its 220 million customers disconnected.

Worldwide disruption spanning Asia, Europe, Latin America and North America began on Thursday, prompting rumors on the Web about the cause of the outage, including speculation that the service had been attacked by Russian hackers, or that the failure was the result of problems caused by a recent software update.

Skype denied the whodunit rumors of an online attack yesterday, saying last night that "the situation continues to improve."

The company said in a Web posting that an issue with signing on had been resolved, though other problems remained. The company, which is based in Luxembourg and was purchased by eBay for $2.6 billion in 2005, declined to elaborate on the genesis of the problem.

Some analysts warned that the outage could cause consumers to lose confidence in the service, which lets users make phone calls inexpensively, or free, using their computers and high-speed Internet connections. In addition to its consumer service, the company has been marketing itself to business users.

The outage also prompted some customers to question their reliance on the service.

"I'm so irritated," said Blanca Freitas, a grandmother in Brazil. She said she uses Skype almost every day to talk to her daughter and 3-year-old granddaughter in London. "I have been trying to connect since Tuesday night," she said, "and it's just not working."

In an interview with the New York Times, one Skype executive said that the problem was caused by a flaw in Skype's four-year-old software and that it was unclear why the problem had remained dormant until this week.

"The longer this goes on, and the more promises that Skype breaks, the more trust in Skype will fall and the worse the long-term damage," wrote Jupiter Research analyst Ian Fogg in a report on the New York firm's Web site.

"It cost me some serious phone charges this morning as I had a two-hour conference call with a client for which I had to use my higher-priced land line," complained one user in a posting on The Washington Post's Web site.

But Michael Hamm, a Skype user in California who has used the service for about a year, said the glitch wouldn't change his loyalties.

"Not at all. It's free, man!" he said.

Where traditional phone companies would face fines from states or the Federal Communications Commission for such an outage, regulatory analyst Blair Levin said such penalties would probably not apply to Skype . Unlike Vonage, which uses the Internet but is marketed as a substitute for traditional phone service, Skype typically operates on computers.

"I don't think there are any regulatory ramifications," said Levin, of the St. Louis-based financial consulting firm Stifel Nicolaus. "Skype is in a different category" from telephone service, he said.

"What makes this Skype outage surprising is how often it doesn't happen," wrote a blogger at the technology site Ars Technica in a posting that played down the problem. "On the other hand, for the first time in many, many weeks, I'll be forced to use a real telephone for business as opposed to Skype."

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