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12/23/2010
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Skype Hit With Major Outage

The latest disruption comes as the Internet telephone provider prepares for an initial public offering.

Skype, which hopes to launch an initial public offering in the near future, suffered its second outage of the year on Wednesday as major computer systems within its network went down, leaving users unable to make Internet telephone or video calls.

By late afternoon Eastern Time, Skye reported on its Twitter feed that the service was gradually returning to normal, but it would take several hours for all subscribers to be able to sign in again. The company reported updates to the outage on Twitter, which is also where users reported being unable to connect.

Skype did not say how many people were affected. The BBC reported that the company lost half of its daily call traffic, which amounted to millions of people worldwide without service.

The outage started when computers called "supernodes," which act like phone directories on the Skype network, "were taken offline by a problem affecting some versions of Skype," Peter Parkes, social media communications lead at Skype, said in the company's blog. "As Skype relies on being able to maintain contact with supernodes, it may appear offline for some of you."

Engineers were creating what Parkes called "mega-supernodes" to replace the ones that were down, and acknowledged the process would likely take a few hours. Some features, such as group video calling, would likely take longer to return to normal.

The outage comes as Skype, which is partly owned by eBay, prepares for an IPO. Skype announced its plans over the summer, but has yet to say when the IPO would take place. In the meantime, the company has been working to beef up its paid services, particularly in the business market. Skype has nearly 600 million registered users, with the vast majority calling each other free-of-charge.

Skype offers free Internet voice and video calling between subscribers, and provides low-cost calls to landline and mobile phones. The service is no stranger to outages. In January, Skype was down for 3.5 hours, and in August 2007, it was down for 36 hours. The company has said it is working to improve the reliability of its network, so it can provide 100% uptime.

In October, Skype named Tony Bates, former Cisco senior VP, chief executive. He replaced John Silverman, who had served as CEO since March 2008.

EBay bought Skype in 2005 for $3.1 billion. It sold the Internet telephony provider in November to an investor group that included Silver Lake, Canada Pension Plan Investment Board and Andreessen Horowitz for $1.9 billion in cash and a $125 million note. EBay retains 30% ownership.

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