History
Skype was founded in 2003 by Janus Friis from Denmark and Niklas Zennström from Sweden, having its headquarters in Luxembourg with offices in Tallinn, Tartu, Stockholm, London, Prague, and Palo Alto. The Skype software was developed by Estonians Ahti Heinla, Priit Kasesalu and Jaan Tallinn, who together with Janus and Niklas were also behind the peer-to-peer file sharing software Kazaa. In April 2003, Skype.com and Skype.net domain names were registered. In August 2003, the first public beta version was released.
One of the initial names for the project was "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.
In September 2005, SkypeOut was banned in China. In October of the same year, eBay purchased Skype for $2.6 billion. (In 2011, the Ars Technica estimated the purchase price at $3.1 billion, not $2.6 billion.) In December 2005, videotelephony was introduced.
In April 2006, the number of registered users reached 100 million. In October, Skype 2.0 for Mac was released, the first full release of Skype with video for Macintosh, and in December, Skype announced a new pricing structure, with connection fees for all SkypeOut calls. Skype 3.0 for Windows was released.
In 2006, a now-discontinued feature called "Skypecasting" was introduced. It allowed recordings of Skype voice over IP voice calls and teleconferences to be used as podcasts. Skypecasting remained in beta until it was discontinued. Skypecasts hosted public conference calls for up to 100 people at a time. Unlike ordinary Skype p2p conference calls, Skypecasts supported moderation features suitable for panel discussions, lectures, and town hall forums. Skype operated a directory of public Skypecasts. Skypecasts was discontinued from 1 September 2008.
Throughout 2007, updates (3.1, 3.2 and 3.5) added new features including Skype Find, Skype Prime, Send Money (which allowed users to send money via PayPal from one Skype user to another), video in mood, inclusion of video content in chat, call transfer to another person or a group, and auto-redial. Skype 2.7.0.49 (beta) for Mac OS X released adding availability of contacts in the Mac Address Book to the Skype contact list, auto redial, contact groups, public chat creation, and an in-window volume slider in the call window. During several days in August, Skype users were unable to connect to full Skype network in many countries because of a Skype system-wide crash which was the result of exceptional number of logins after a Windows patch reboot ("Patch Tuesday"). In November, there was controversy when it was announced that users allocated certain London 020 numbers (specifically those beginning '7870') would lose them, after negotiations with the provider of this batch of numbers broke down.
By early 2008, the tumultuous ownership relations between the founders and eBay had resulted in significant leadership churn, with a succession of Skype presidents including Niklas Zennström, Rajiv Dutta, Alex Kazim, Niklas Zennström (again), and Henry Gomez, all holding that title at various points between 2005 and 2007. The business had failed to meet certain earn-out targets, growth was decelerating, product development had slowed significantly, and in October 2007 eBay took a $1.4 billion 'impairment' on the value of Skype, admitting it had overpaid, and now valuing the company at about $2.7 billion.
In October 2008, analysis revealed TOM-skype — the Chinese version of Skype run by TOM Online — sends content of text messages and encryption keys to monitoring servers.
Read more about this topic: Microsoft Skype Division
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