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Skype - the "multi-mode communications tool"

With more than 40 million registered users (a number that is increasing by approximately 150,000 new users a day according to the company), Skype is as much a cultural as a technical phenomenon. The cultural aspect of Skype is doubtless attributable to its origins as a free, peer-to-peer software application developed by the same bunch that pioneered the controversial Kazaa file sharing program used to swap music files. Yet unlike Kazaa, the predominant use of Skype is as a legitimate means to bypass often pricey, traditional phone services and offer a combination of free and extremely inexpensive phone options.

Skype Features and UI

Figure 1: Skype Features and UI

(click image to enlarge)

In its basic form, Skype is more like one of the many free "softphone" services that have preceeded it than a traditional VoIP, providing free calling to any other Skype user no matter where in the world they are. But Skype is more than just a softphone service. It also contains an IM (Instant Messaging) application similar to services such as AIM or Yahoo! Messenger. In fact, you can even use Skype's IM features to do an IM chat with another Skype member - without even dialing their number.

Skype's "presence" features include the familiar "buddy lists" (Skype calls them Contacts) that allow you to see who's connected, available, away, etc. and you also have the text chat and file transfer capabilities found in other IM programs.

The application itself runs on a Windows, Mac OS X or Linux computer or PocketPC (sorry, no PalmOS version) and you use either the computer's built-in microphone and speaker or a plugged-in headset. If you would rather use a real phone, there are adapters available from a few manufacturers that let you plug in an analog phone and connect it to the computer running Skype via a USB connection. See this review of an adapter from Actiontec for more info. The other option you have is using a USB phone that you can buy either from the Skype store or other retailers.

As attractive as Skype's unlimited free calling is, sooner or later you'll want to make a call to someone who isn't a fellow Skyper. Skype's answer is its optional SkypeOut service, which requires a separate sign-up and purchase of SkypeOut "credits" - similar to using a pre-paid phone card. The minimum purchase is 10 € , which - depending on the day's currency exchange rates - equates to around $12.60 USD. By the way, Skype says it currently has "more than 1.4 million pre-paying customers".

Once your credit card is authorized by Skype and you purchase SkypeOut credits, you will be able to use the service at incredibly inexpensive rates - sometimes as low as two cents a minute to any North American location as well as numerous international numbers.

The final piece that enables the comparison of Skype to traditional VoIP services is its SkypeIn service, which currently is still in Beta. You subscribe to SkypeIn by purchasing a number subscription, with a 12 month subscription costing € 30 or 3 months for € 10. Subscribing to SkypeIn also gets you Skype Voicemail for no additional charge, although, it too, is in Beta as I write this.

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