Skype

Skype () is a proprietary telecommunications application operated by Skype Technologies, a division of Microsoft, best known for VoIP-based videotelephony, videoconferencing and voice calls. It also has instant messaging, file transfer, debit-based calls to landline and mobile telephones (over traditional telephone networks), and other features. Skype is available on various desktop, mobile, and video game console platforms.

Skype was created by Niklas Zennström, Janus Friis, and four Estonian developers and first released in August 2003. In September 2005, eBay acquired Skype for $2.6 billion. In September 2009, Silver Lake, Andreessen Horowitz, and the Canada Pension Plan Investment Board bought 65% of Skype for $1.9 billion from eBay, valuing the business at $2.92 billion. In May 2011, Microsoft bought Skype for $8.5 billion and used it to replace their Windows Live Messenger. As of 2011, most of the development team and 44% of all the division's employees were in Tallinn and Tartu, Estonia.

Skype originally featured a hybrid peer-to-peer and client–server system. It became entirely powered by Microsoft-operated supernodes in May 2012; in 2017, it changed from a peer-to-peer service to a centralized Azure-based service.

As of March 2020, Skype was used by 100 million people at least once a month and by 40 million people each day. During the COVID-19 pandemic, Skype lost a large part of its market share to Zoom.

Etymology

The name for the software is derived from "Sky peer-to-peer", which was then abbreviated to "Skyper". However, some of the domain names associated with "Skyper" were already taken. Dropping the final "r" left the current title "Skype", for which domain names were available.

History

Skype was founded in 2003 by Niklas Zennström, from Sweden, and Janus Friis, from Denmark. The Skype software was created by Estonians Ahti Heinla, Priit Kasesalu, Jaan Tallinn, and Toivo Annus. Friis and Annus are credited with the idea of reducing the cost of voice calls by using a P2P protocol like that of Kazaa. An early alpha version was created and tested in spring 2003, and the first public beta version was released on 29 August 2003.

In June 2005, Skype entered an agreement with the Polish web portal Onet.pl for an integrated offering on the Polish market. On 12 September 2005, eBay Inc. agreed to acquire Luxembourg-based Skype Technologies SA for approximately US$2.5 billion in up-front cash and eBay stock, plus potential performance-based consideration. On 1 September 2009, eBay announced it was selling 65% of Skype to Silver Lake, Andreessen Horowitz, and the Canada Pension Plan Investment Board for US$1.9 billion, valuing Skype at US$2.75 billion. On 14 July 2011, Skype partnered with Comcast to bring its video chat service to Comcast subscribers via HDTV sets.

On 17 June 2013, Skype released a free video messaging service, which can be operated on Windows, Mac OS, iOS, iPadOS, Android, and BlackBerry.

Between 2017 and 2020, Skype collaborated with PayPal to provide a money-send feature. It allowed users to transfer funds via the Skype mobile app in the middle of a conversation.

In 2019, Skype was announced to be the sixth most downloaded mobile app of the decade, from 2010 to 2019.

Microsoft acquisition

On 10 May 2011, Microsoft Corporation acquired Skype Communications, S.à r.l for US$8.5 billion. The company was incorporated as a division of Microsoft, which acquired all its technologies with the purchase. The acquisition was completed on 13 October 2011. Shortly after the acquisition, Microsoft began integrating the Skype service with its own products. Along with taking over the development of existing Skype desktop and mobile apps, the company developed a dedicated client app for its then-newly released, touch-focused Windows 8 and Windows RT operating systems. They were made available from Windows Store when the then-new OS launched on 26 October 2012. The following year, it became the default messaging app for Windows 8.1, replacing the Windows 8 Messaging app at the time, and became pre-installed software on every device that came with or upgraded to 8.1.

In a month-long transition from 8 to 30 April 2013, Microsoft discontinued two of its own products in favor of Skype, including its Windows Live Messenger instant messaging service, although Messenger continued to be available in mainland China.

On 11 November 2014, Microsoft announced that in 2015, its Lync product would be replaced by Skype for Business. This combined features of Lync and the consumer Skype software. There are two user interfaces, organizations could switch their users between the default Skype for Business interface to the Lync interface.

Post-acquisition

On 12 August 2013, Skype released the 4.10 update to the app for Apple iPhone and iPad that allows HD quality video for iPhone 5 and fourth-generation iPads.

On 20 November 2014, Microsoft Office's team announced that a new chat powered by Skype would be implemented in their software, giving tools to be able to chat with co-workers in the same document.

On 15 September 2015, Skype announced the release of Mojis, "a brand new way to express yourself on Skype". Mojis are short clips/gifs featuring characters from films and TV shows to be entered into conversations with the same ease as emoticons. They worked with Universal Studios, Disney Muppets, BBC
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