Skype chief steps down amidst challenges

Skype co-founder and chief executive officer Niklas Zennström has stepped down as chief executive officer for the peer-to-peer messaging service.

The Ebay's chief strategy officer will temporary take over the executive chair while a permanent replacement is sought. Zennström has been appointed non-executive chairman of Skype's board of directors.

The management change comes shortly after Skype was hit by an embarrassing, widely publicised two day outage last August. The service interruption has been traced back to an error in the Skype software that wastriggered by a Microsoft update. A forced reboot after the Windows update effectively launched a denial-of-service attack against the VoIP service.

Ebay acquired Skype for US$2.6bn in 2005. Critics have questioned the auction service's ability to earn back the acquisition sum. Ebay previously argued that it would increase Skype's appeal by offering premium services such as the ability to call the seller of a product.

Skype in its most recent quarter posted revenues of US$90m and boasts 220m registered users. In a conference call discussing the June 2007 earnings however, Ebay chief executive Meg Whitman admitted that Skype had failed to deliver the desired level of user activity.

Since the sale of Skype to Ebay, Zennström has started up a new online video company under the Joost brand. The service was officially unveiled last January.

A spokesperson for Ebay did not immediately return a call requesting comment on the reason for Zennström's departure.