Swedish entrepreneur Niklas Zennström is widely credited with bringing the boom times back to the Web industry. But while his best-known creation, Skype, struggles to convert free users to paid-for services, Zennström finds himself under increasing pressure to deliver

Niklas Zennström seems pretty composed. Maybe that's his way. Given the volume of criticism aimed at internet phone company Skype—and the potential damage to his hitherto bulletproof image—a slightly nervier performance from its co-founder wouldn't seem out of place. But Zennström talks calmly about "partnerships", "revenue streams" and "executing roadmaps". If he's acting, it's a consummate performance. The venture capitalist Saul Klein, who worked with Zennström at Skype, calls him "straightforward", "humble" and "brilliant". You can add "unruffled" to that list.

Skype's 2003 launch promised a revolution. Suddenly the idea of paying to make telephone calls seemed archaic—a 20th century model. Zennström became an overnight success, the swashbuckling entrepreneur for whom no competitor was too big. It was as if the term "disruptive technology" had been coined especially for him. Asked by The New York Times whether he relished the idea of causing trouble for the telecoms industry, Zennström replied that he thought it was going to be "fun". Others saw it as more serious than that. A report by Daiwa Securities rather dramatically described Zennström's start-up as "akin to a giant meteor hurtling on a collision course toward Earth".

Skype did land with a thump, but since then appears to have stalled. At the time, eBay's September 2005 purchase of the company, for $2.6bn, seemed to rubber stamp its huge potential—and for many, it was an indication that the 1990s tech boom was back. But despite acquiring a customer base of 220 million—a phenomenal achievement considering next to nothing was spent on advertising—eBay last month effectively admitted it was disappointed with its acquisition, taking a £450m write-down against the value of the company.

Zennström, who had stayed on as CEO following the takeover, then stepped down, switching to non-executive chairman amid concerns that Skype's evangelical customers weren't using enough of the paid-for services, such as voicemail. Brought in on the promise of free calls, they were taking that pledge rather too seriously.

Zennström has been quoted in the past as saying that he wanted to "make as little money as possible per user", hoping that Skype's broad appeal would cover the shortfall. But he remains confident that his creation will come good. "With these kind of companies, if you try to monetise too quickly you start to lose users," he says. He believes unrealistic expectation has weighed heavily. "Maybe some analysts [had] expectations that revenues would grow even quicker, but the company's still in great shape," he says.

One of those analysts, Ovum's Mark Main, says not only have revenues been disappointing, but use has slowed. "The service is clearly not generating anything like the business boost eBay expected," he says. Zennström disagrees. "The revenues are ramping up. From my point of view, Skype is putting its competitors further and further behind." He insists the plan was always to step down "when the time was right".

But is it? EBay has yet to appoint a permanent successor—suggesting the decision may have been a little more forced than Zennström is willing to let on. Any entrepreneur would be likely to feel aggrieved at leaving their start-up before it achieved its full commercial potential. But Zennström can step down with a clear conscience: a large proportion of his pay-out was performance related, and he certainly maximised value for his original shareholders. If anything, the subsequent $2.6bn price tag was a result of eBay's eagerness to secure what CEO Meg Whitman perceived as a fast-appreciating asset. Perhaps a more commercially minded CEO will learn to "monetise" more quickly.

In the meantime, Zennström is inscrutable: "I want to be able to spend time on more entrepreneurial ventures," he says. By this, he means  Joost, a new TV station that delivers free content over the internet. Zennström started the company alongside Janus Friis, the Danish entrepreneur he first hired while running the ISP division of telecoms company Tele2. Friis helped him develop the controversial file-sharing service Kazaa—which at one point was so popular it accounted for half of all the peer-to-peer traffic on the internet—before the pair moved on to Skype. Joost is the latest of the duo's creations to be billed by the media as "disruptive"—this time, of course, to the television industry. But do television's suits see it as a threat?

Earlier this year, Friis went up to the Edinburgh Festival to find out. He didn't exactly set the stage alight. In his attempt to sell the variety of Joost's content to a roomful of TV executives, Friis only succeeded in fanning the flames of a dispute about bandwidth capacity. But unlike the early days of Skype, this time Zennström wants the incumbent industry on-side.

"With Joost it's different," he says, "because we need to get content on it. You need partnerships with content providers and you need advertisers. If you're not friends with those people, then it gets difficult."

Can you be friends and compete? "That's not how we want to look at things." You don't think about the competition? "It's a new market that's being created," Zennström replies. "We're not out to take customers from anybody. You have a vision, you put a roadmap in place and then you execute. So many companies are doing so many different things. If you keep looking at them, you lose focus."

There is a competitive field, of course. And it's widening. The BBC has its iPlayer; Channel 4 has 4oD; and Babelgum, an Italian start-up, has a similar business model to Zennström's: TV on demand, with a global slant, delivered free over the Web. Babelgum's co-founder Silvio Scaglia didn't fear a conflict of interest last month when he called the arrival of smaller operators "a fundamental shift in power". But Zennström insists the battle isn't with the major networks.

"For a TV company that both produces and broadcasts shows, Joost can be a good partner because it is a way to reach an audience worldwide," he says. In any case, "consumers have limited time, so the choice is not only between Joost and TV; it's between Joost and Playstation, Joost and Myspace, Joost and going out to meet friends. You limit yourself too much by saying, 'This is our competition.' It's really about how to attract an audience and be relevant for them."

A word on bandwidth. Much of the controversy surrounding content-rich services, such as TV on demand, has focused on the availability of bandwidth space. On the blogosphere, some commentators have been asking whether the average user has a sufficiently fast connection to make the most of the Joost software, with many more asking whether the internet itself can handle the strain of TV on demand.

With his ISP background, Zennström is well placed to comment. "If you actually ask the people who are planning the network, they are not concerned," he says: "Everything that fills up their pipes is good for them. Fibre optic cables have pretty much unlimited capacity, so it's just a matter of upgrading the routers."

Ultimately, then, there is an upgrade cost involved and many ISPs believe it should be borne either by the users or by the content providers themselves. In the US, AT&T and Verizon have both indicated their support for a two-tier internet on the premise that if you use more bandwidth, you have to pay for it.

Zennström is understandably nonplussed. "If you look at the internet, which is one of the most important innovations of the last 100 years, it's making the world a smaller place, creating democracy and transparency," he says. "The reason for that is that it's non-discriminatory. Everyone who wants to access it can access it, whether you're a rich company in the US or a poor consumer in India. If we start saying that a smaller company in the countryside has to negotiate for a deal with [US ISP] Comcast to reach a US audience, then it's a disaster for small businesses."

Zennström makes a very good small business ambassador. He starts companies for fun, of course: as well as Skype, Joost and Kazaa, he has had a hand in founding the ISP Get2net, software company Joltid, Web company Altnet and venture capital firm Atomico. But it's perhaps his innovative spin on operational structure that stands out. Joost, for example, has offices in London and New York, plus a development team in the Netherlands. Skype has its headquarters in Luxembourg and offices in London; Tallinn and Tartu in Estonia; Prague in the Czech Republic; and San Jose, in California. "When you want to attract key people, sometimes it's easier to spread yourself out," he explains.

"Even before we started Skype, we were quite spread out. I was in Stockholm, Janus was in Denmark, our developers were in Estonia. That's when we discovered there was a market for Skype, because we needed to use it ourselves." For now at least, Zennström regards London as the most important base from which to launch. "It would have been easy to pack our bags and move to the US," he says, "but London is great because it's the worldwide hub of Europe. People coming to do business in Europe come to London rather than Paris or Copenhagen. The capital is here, it's a place that attracts people who are eager to do things."

With the interview almost over, Skype's PR is keen to show off Skype for Business, which among other things combines free video calls with handy chatroom-style email. Zennström grabs a remote control and patches through to a Skype employee in Estonia, whose face appears in widescreen on the wall. The quality is impressive—with a negligible "latency" delay-especially considering other videoconferencing companies charge anything between £3,000 and £300,000 for a connection.

Whether or not the software becomes as much of a nuisance for videoconferencing operators as Skype's original service was for the telecoms companies depends very much on how Skype's reputation survives the current media backlash. But Zennström still holds the ace: it's a tough job competing with free.

He maintains he always prefers to create than destroy. "For me, disruptive technology is about taking advantage of new technologies to do things in a new way," he says. "If that makes it more difficult for existing players in the market, well that's too bad for them. The idea has never been to blast holes in someone else's business. The idea is to become competitive by doing things differently."