What Is Skype’s History? Niklas Zennstrom & Janus Friis’ Startup Story
Only 10 years ago, no one could have even imagined that nowadays everybody would be able to make completely free calls with anyone, anywhere in the world… Not only can you talk with someone on the opposite side of the Earth, but you can watch him/her in real time, share files and even play games with the person you are connected to or make a conference call to a group of users. This is what Skype made possible and totally free for everyone! Great! And here is how all happened…
But first, what is Skype?
You may be amazed, but actually, there are many people that don’t really know what Skype is. If you are not one of them just skip this part. So, Skype is a computer program available for all types of operating systems (like Windows, Android, Linux) with which you can connect to people from all around the world to chat, talk or even call them on their phone. One of its greatest features is that you can make free international calls through the Internet with it. You can also share files and pictures. If you have a camera, you can make video calls and many more things like these. Currently, the application is owned and developed by Microsoft Corporation after they bought it for $8.5 billion from eBay.com. It’s completely free and you can download Skype from its official site here.
History of the company
Niklas Zennstrom from Sweden and Janus Friis from Denmark put the beginning of Skype, back in 2003, when they sold their previous project “Kazaa”. The latter was a peer to peer application for sharing files and it had become the most downloaded software, by the time it was sold. Niklas and Friis saw the huge potential of apps like this, and this is how they came to the idea known today as “Skype”. This had to be an application, making it possible for somebody to be able to connect to someone else, without the need for centralized servers or complicated infrastructure. The only thing that was needed was both of the participants in the connection to have Skype installed. And instead of only chatting, they were able to talk to each other. The idea was great and innovative. The two guys had even greater marketing strategy – all of this would be completely free for everyone! This really helped with the early popularization of the software. At that time there were many places in the World, where conventional calls to other countries were relatively expensive or even impossible. Skype was like the discovery of the wheel for the people there, and soon thousands of hundreds were using the free tool for calls around the world.
Everything was good, popularity was growing, but because of that Skype was completely free, there was a need for some money for its further development and maintenance. Its founders didn’t want to charge people for the use of the software, so they had to find another solution to generate some income. They decided to launch a paid service, allowing Skype users to make/accept calls to/from regular phones at many times lower prices, that these people paid for normal calls. This was a deal which people could not reject. By the end of the year 2005, more than 74 million people from around the globe were using Skype. The application was generating $35 million quarterly from calls to regular phones and had more than 10 million active users daily. The beginning of fast expansion had been put. Just after two years, for the fourth quarter of 2007, the revenue from outside calls had grown nearly three times to $115 million, and the registered accounts nearly quadrupled reaching 276 million. For the fourth quarter of 2011, Skype generated more than $860 million of revenue and had conquered around 15% of the international calls market share. The number of registered users was around 700 million, or 10% of the population on the Earth.
E-bay Buys Skype
In September 2005, the biggest online auction – Ebay.com announced that they had negotiated a deal to purchase Skype for $2,6 billion dollars! They agreed to pay $1,5 billion more in the following three years. And this was just 3 years after the company was founded. The management of eBay believed, that communication was the heart of the Internet and they were putting their money into a good use. But things didn’t go well as planned, and four years later, in November 2009, The online auction announced that they sold 70% of Skype for $2.75 billion to a group of investors, including Joltid – a company founded by the previous owners and developers of Skype.
Microsoft Purchases the Company
In May 2011, Microsoft agreed to buy Skype for the astonishing amount of $8.5 billion! This was the largest acquisition of the giant so far. Steve Balmer – the executive director of Microsoft, announced that Skype was a revolution in the Internet world and that it would help them transform their products integrating the option for real-time communication. Many think that the price was too big, but I consider that this was a very smart move. Soon MS products like Windows, MS Office, even X Box 360 console will offer live video chat for their users, who will get grouped and socialized. Everybody knows how social networks changed the word, maybe after a few years our operating systems and all of the programs we use will become social…, who knows?!?
Today Skype can be used on almost any device. If you still don’t have it, get the latest version now, it’s completely free:
Download it from its official Site: http://www.skype.com (Windows)