Skype was founded in 2003 to allow online video and audio calls. It grew popular due to improved broadband and frequent updates adding features. Though competitors emerged, Skype remained the top video chat program through partnerships and integration across devices. It had over 660 million users by 2010 and generated substantial business revenue in addition to personal calls. Microsoft acquired Skype in 2011 to benefit from its widespread user base.

1. How online video
messaging came to fruition
By,
StéphaneRoque

2. Origin
• Founded in 2003 by Janus Friis and
NiklasZennstrom.
– Cofounders of music-sharing software Kazaa.
– “Service allows users to communicate with peers
by using a microphone, video by using a
webcam, and instant messaging over the internet”
(2013 Skype Wikipedia page ).
– Also allows file sharing between users.

3. Development
• Friis and Zennstrom later aided by Estonian
developers AhtiHeinla, PriitKasesalu and Jaan
Tallinn in development of basic Skype
software.
• Skype begins to blossom with the increased
efficiency of broadband strength, raising
nearly $20 million in 2003 to help company
grow.

4. Development
• Every new version of the software offers
various different features.
– Instant messaging.
– File sharing.
– Group video messaging.
– Video calls through HDTV sets (Comcast/Skype
partnership beginning in 2011).

5. Development
• Software restrictions:
– Not able to call emergency numbers in any part of
the world.
– FCC ruled that Skype is not considered “an
interconnected VoIP provider” (2013 Skype
Wikipedia page).

6. Marketing
• Ebay acquires Skype in 2005 for $2.6 billion.
• In 2006, Skype adds video calling capabilities
to enhance marketing approach.
• 37% of all Skype calls are business related.

7. Marketing
• “Most of Skype's traffic consists of personal
communications between family members
and friends, who pay little--often nothing--to
use the service” (Elizabeth Woyke “Skype’s
Growth Strategy”).
• In theory the marketing is primarily aimed at a
community using the free software.

8. Marketing
• “Business customers bring in 20% to 30%
more revenue than regular consumers”
(Woyke).
• In 2010, Panasonic and Samsung teamed with
Skype to create high definition video chatting
from the living room.
– TV webcams rose in popularity during this time.

9. Marketing
• Skype provides serviceable communications
solutions for both older and younger
consumers.
– Older consumers intimidated by computers can
rely on TV webcams for easy video chats.
– Younger consumers can continue to adapt to new
changes within the Skype software.

10. Adoption
*Skype timeline collected from www.geekosystem.com: created by Max Eddy.

11. Adoption
• In 2009, Ebay sells 70% of Skype shares
because of a nearly $1 billion loss.
• Skype files for an IPO in 2010, but later
decides against it.
• In 2011, Microsoft purchases Skype for $8.5
billion.

12. Competition
• Beginning in 2005, Skype saw a rise in
competition to its services.
– Google Talk is introduced as a similar platform to
Skype.
– ooVoo was introduced in 2007.
• Supports 12-way video chatting.
• Video call recording.
• Desktop sharing.

13. Competition
• In 2011, Apple Facetime is created.
• only functioning on Wi-Fi (not 3G capable).
• Allows users to video chat with other Iphone users via
phone calls.
• Vbuzzer introduced in 2012.
– “Voice over IP and instant messaging software and service”
(2013 Vbuzzer Wikipedia page).
– Offers free voicemail and caller ID.

14. Success
• At the end of 2010, Skype had 663 million
users (63 million more users than Facebook).
– “40% of all minutes talked are now using video
chat” (pcmag.com).
– Total number of Skype users has steadily
increased every year since 2005.

15. Success
*Skype statistics collected from pcmag.com.

16. Success
• Integration of Skype with Windows.
– Skype app available for Windows smartphones
(Androids and Iphones also).
• “Skype now accounts for 12% of all long distance calls”
(TeleGeography study).
– Xbox Live and Microsoft Office also compatible
with Skype software.

17. Conclusion
• Based on research, Skype tends to be most
popular choice for video chat users.
• Other competitors popping up have pushed
Skype to produce effective new features on a
consistent basis.
• After going through a “mid-life crisis” with
ownership, Skype rebounded positively.

18. Conclusion
• Skype has “recently announced a software
development kit (SDK) that will enable third
parties to embed Skype in new types of
devices” (RikFairlie “Chatting Over Skype, This
Time From The Sofa).
• Skype’s ability to embed in every OS makes it
a universally accepted software.

19. Works Cited
• Eddy, Max. The History of Skype: Infographic.
www.geekosystem.com. May 16, 2011.
• Fairlie, Rik. Chatting Over Skype, This Time
From The Sofa. The New York Times; p10.
July 8, 2010.
• Keane, Meghan. The Secret to Skype’s
Success: Growing the Online Phone Market.
January 19, 2010.

20. Works Cited
• Woyke, Elizabeth. Skype’s Growth Strategy.
Forbes. May 21, 2010.
• Yin, Sara. Infographic: Skype Goes From Rags
to Microsoft. Pcmag.com. May 26, 2011.
• Wikipedia pages for:
– Skype
– Vbuzzer.