Chinese Engineers Reportedly Crack Skype's Code

The blogsphere is buzzing with a report made by a Skype competitor -- who also helpfully provided screenshots illustrating the event -- that Skype's protocol has been cracked by a Chinese engineering team.

Charlie Paglee, head of VoIP provider Vozin Communications, claims in his blog, VoIPWiki Blog, that a team at an unnamed research institution reportedly reversed engineered the company's peer-to-peer phone system, allowing non-Skype users to place or receive a call to a Skype subscriber using its own client. It is legal because Skype never patented its protocol, he wrote.

If this report is true -- and Skype has denied it -- it could damage Skype's network, which doesn't have to use servers because its architecture is a distributed system that relies on super nodes to handle calls and other functions. If enough users migrate to the new, knock-off version, Skype's network could conceivably crash. At the least, it could force the company to integrate servers into its network.

There are no security implications to using a Skype knock-off, Ron O'Brien, senior security consultant with Sophos told TechNewsWorld. "Services like Skype are on our radar, though -- more for the question of its protocol and how that fits into the network, rather than anything security related."

Where's the Beef?

The question is why would users want to migrate to a knock-off version of Skype in the first place, and why would a Chinese competitor want to bother to undercut the company's services, which after all, are free. As Jon Arnold, principal with J Arnold & Associates put it, "what's the point?"

"There is not much money changing hands over Skype, it is free talk," he told TechNewsWorld. "I don't understand what could be gained from duplicating the service."

Conceivably, a firm might want to undercut a foreign competitor entering the market, Arnold acknowledged. "That did happen with BlackBerry in China, but again, since Skype is free, what are they undercutting?" he added.

Competitive Concerns

Still, the reports are a reminder that Skype, which has been acquired by eBay (Nasdaq: EBAY) for US$2 billion, has yet to delineate a clear path to profits for its parent.

"I wouldn't say they are failing, but it is hard to see where they are headed," Arnold noted. One possibility, he said, is integrating the voice component into the auction platform. "The challenge is taking a service that is free and integrating it into a revenue-generating business like Paypal, for example."