Skype Technologies

Skype Technologies. Skype is a telecommunications application software product that specializes in providing video chat and voice calls between computers, tablets, mobile devices, the Xbox One console, and smartwatches via the Internet. It also provides instant messaging services, file transfer, and video conferencing. The service is operated by the Microsoft subsidiary of the same name, which is based in Luxembourg.

History

The software was created by Estonian developers Ahti Heinla, Priit Kasesalu, and Jaan Tallinn, who were also behind the peer-to-peer file-sharing software Kazaa. The project was managed by Swedish entrepreneur Niklas Zennström and Danish entrepreneur Janus Friis. Skype was founded in 2003 and was acquired by eBay in 2005 for approximately $2.6 billion. In 2009, eBay sold a majority stake in the company to an investor group led by Silver Lake Partners. In May 2011, Microsoft announced its acquisition of Skype for $8.5 billion, which was completed in October of that year. Under Microsoft, Skype was integrated into products like Microsoft Office and the Windows operating system, and later underwent a major redesign to compete with rivals like Zoom Video Communications and Discord.

Features

The application supports text, voice, and video communication. Key features include one-to-one and group video calls, screen sharing, and call recording. It offers VoIP services to call landline and mobile numbers via a subscription service called Skype Credit. The platform also includes features like instant messaging, file transfer, and SMS texting. Unique functionalities have included a real-time language translation tool, integration with Microsoft Outlook for scheduling meetings, and the ability to send money via PayPal. Over the years, features like Skype for Business were merged into Microsoft Teams.

Technology and infrastructure

Originally, Skype operated on a proprietary peer-to-peer protocol, which leveraged users' bandwidth and computing resources to help route calls and data, reducing the need for centralized infrastructure. This architecture was based on the work done for Kazaa and utilized a network of supernodes. Following the acquisition by Microsoft, the service transitioned away from the peer-to-peer model to a more centralized infrastructure based on Microsoft Azure cloud servers. This shift improved reliability and scalability, particularly for group video calls. The application uses various codecs, including Opus for audio and VP8 for video, to compress data.

Business model and ownership

The service operates on a freemium model; basic features like voice and video calls between Skype users are free, while premium features such as calling mobile phones and landlines require payment via Skype Credit or a subscription. Historically, the company generated revenue through partnerships with telecom operators and its Skype for Business offering. After its acquisition, Skype became a division of Microsoft, which integrated it deeply into its ecosystem, including Windows 10, Xbox Live, and Microsoft Office 365. The European Commission and the Federal Trade Commission approved the acquisition after regulatory review.

Reception and impact

Upon its release, Skype was widely praised for its high-quality voice calls and disruptive impact on the international telecommunications industry, particularly for challenging traditional landline and mobile network operators. It won awards like the Webby Award for Best Practices. The service saw massive adoption, reporting over 300 million users by 2010. However, it later faced criticism for complex interfaces, privacy concerns, and competition from apps like WhatsApp, FaceTime, and Zoom Video Communications. Its integration into Microsoft Teams marked a strategic shift for the company. Skype is credited with popularizing VoIP and making video calling a mainstream activity.