Skype is a software application that allows users to make voice and video calls over the internet. It was originally created in 2003 as an alternative to traditional phone service that offered free calls between users. Skype grew rapidly due to features like file sharing and video conferencing, and was later acquired by eBay in 2005 and Microsoft in 2011 as its popularity increased globally, especially for cheaper international calls. While free for basic use, Skype utilizes proprietary VOIP technology and has both advantages like low-cost communication worldwide and disadvantages like requiring both parties to have the Skype software installed.