HONG KONG/BEIJING (Reuters) - Savvy Internet users in China began avoiding the version of Skype offered by its Chinese partner two years ago, but news it filtered and recorded text messages has sparked new worries about the global firm’s commitment to privacy.

A man uses a Skype internet phone next to a laptop in Taipei November 11, 2005. REUTERS/Richard Chung

The U.S.-owned Web communications firm faces a backlash at home and in China for apparently allowing core principles to be compromised in order to meet the demands of Chinese censors, analysts warned.

“We may never know whether some of those people whose conversations were logged have gone to jail or have had their lives ruined in various ways as a result of this,” said Rebecca MacKinnon, an Internet expert at Hong Kong University.

“This is a big blow to Skype’s credibility, despite the fact that Skype executives are downplaying it as not such a big deal.”

Skype, with its promises of total security and privacy, has long been popular with Chinese looking to keep their conversations away from the prying eyes of government censors.

But the eBay-owned firm had to apologize on Thursday after a report revealed that its Chinese service not only monitors text chats with sensitive keywords, which it had earlier admitted, but also stores them along with millions of personal user records on computers that could easily be accessed by anybody.

Skype added however that only messaging conversations where one or more people were using the Chinese software were affected.

The censorship provoked little surprise among some of China’s more knowledgeable Web users, however.

Suspicious of the software provided by TOM Online Inc., majority owners of the TOM-Skype joint-venture in China, they had already sought out the original version.

“We already knew that their software would not pass on messages with some words in them, so we understood they had some deal with the government and we avoided them,” said Wang Lixiong, an author with dissident views.

Many spread the word over blogs and through other networks that the TOM-Skype version was not secure. The Skype homepage in China apparently redirected would-be users to download that version rather than the international one.

OVERSATISFYING BEIJING

Still, there was outrage at the extent of a cooperation that many saw as another example of once-admired Western Internet giants bending their principles in order to do business in China.

“The problem with Skype is that they did more than what people expected. They over-satisfied the government,” said Isaac Mao, one of China’s earliest and best known bloggers.

Yahoo Inc. has been widely criticized for its role in helping the Chinese government identify Shi Tao, a reporter accused of leaking state secrets abroad. He was jailed for 10 years in April 2007.

Google Inc., which has the corporate motto “Don’t be evil”, upset some by launching a self-censoring Chinese site.

TOM said only that the company adhered to Chinese rules and regulations, and declined to answer any further questions.

Their defense was mocked by the people they aimed to monitor.

“We must interrogate you: the constitution stipulates that citizens have freedom of correspondence and of secret correspondence. Have you complied with this mother of laws?” one post on an online message board asked.

Author Wang said government controls on phones and other Internet programs left him with little choice but to take Skype at its word and continue using its original software, but even that has a security flaw that he worries about constantly.

He says the program allows one user to open their account on two separate computers, with no notification to the first.

“If our password is stolen, everything that we do on Skype can be seen or copied on another computer without us knowing. And in fact stealing a password is very easy for Internet police or hackers,” he added.