Has Skype been cracked?

Skype's model of being a communications island could be under threat, if reports that its voice and instant messaging client has been successfully reverse engineered are true.

According to Charlie Paglee, the chief executive of a Chinese-American Internet telephony (VoIP) company called Vozin Communications, engineers from a small Chinese startup have managed to crack Skype's protocol.

Writing on his VoIPWiki blog on Thursday, Paglee claimed he had been made aware of the development when a member of the team successfully called him on his Skype account from another VoIP client.

The as-yet-unidentified company is reportedly working towards a client that is "100 percent" compatible with Skype. If these reports are correct, they have so far succeeded only in peer-to-peer voice calls, but are now concentrating on emulating Skype's instant messaging (IM) and presence (the ability to see which of your contacts are online) capabilities.

Skype itself reacted to the news with a statement on Friday, saying it had "no evidence to suggest that this is true". 

"Even if it was possible to do this, the software code would lack the feature set and reliability of Skype which is enjoyed by over 100 million users today.  Moreover, no amount of reverse engineering would threaten Skype's cryptographic security or integrity," Skype continued.

The main problem for Skype is that its business model is largely based on being a closed system, according to telecoms analyst James Enck of Daiwa Securities.

Referring to recent IM interoperability agreements between Microsoft and Yahoo, and Google and AOL, Enck told ZDNet UK that Skype was becoming increasing unusual in being a "disconnected IM island".

"Skype has been fairly unique against this background in not pursuing some direct peering or federation with one of these other IM bases, so maybe someone is going to do that for them," Enck said on Friday.

"If someone's working on something that opens that up to other possibilities, where someone can federate all their contacts from IM platforms, arguably communications become a lot richer, but maybe the Skype ecosystem becomes damaged because they don't have that lock on the address book. It seems to remove one element of control that they've had all this time."

Enck added that Skype could have difficulty in targeting the engineers over intellectual property rights as they are based in China.

Less than a year ago, Skype was bought by eBay, which aims to use it as a communications tool within its online auctions. It is also thought that the client might at some point begin to bear advertising — a model which may be in trouble if an ad-free Skype clone becomes available.

eBay was not available for comment at the time of writing.