Niklas Zennstrom, the 38-year-old who founded web music-swapping service Kazaa with Janus Friis (before selling it to Sharman Networks for an undisclosed figure) has a new venture. Calling on more than 10 years' experience in the telecoms industry, and a degree in Business Administration and Engineering Physics, he is bringing us Skype, which enables unlimited free calls over the internet via peer-to-peer file-sharing software.
Windows users with a soundcard and headset can download the software for free from skype.com and phone others on the network. Alternatively, they can buy a handset that plugs into the USB port of a PC. For Microsoft Pocket PC users, there's PocketSkype, for making calls via Wi-Fi. And, in September, thanks to Skype's partnership with Siemens, users will be able to buy a mobile with imbedded internet telephony, enabling them to manage chat and email.
"It's our vision that, in future, everyone will be making free calls over the internet and we hope they will be using Skype," says Zennstrom.
"Skype will extend to other platforms and internet-connected home phones." More than 10.3 million people have downloaded Skype since its beta release on 29 August 2003. According to Zennstrom, there are 4.5 million users in some 170 countries, with about 19 new registrations every minute. "We wanted to provide a simple, quality product that was well-suited to viral marketing."
Zennstrom says that the service can handle 15 languages, conference calling for up to five users and multiple call-holding for up to 16 users, along with instant messaging. "Skype enables businesses to use the internet and their local area network as their centre of voice communications with no extra outlay," he explains. "It requires no server or workstation configuration, and works behind most firewalls and gateways without a security risk," he adds.
Just as Kazaa shook up the music industry, so there is a mixed reaction to free internet calls in the telecoms world. "While the big telecoms players are worried about Skype," Zennstrom claims, "the chairman of the Federal Communications Commission (Michael Powell) has said that he doesn't want internet telephony regulated in its growth phrase as a new industry."
Though ISPs like AOL and BT offer voice-over IP (VoIP) services (see feature, p62), Zennstrom is optimistic. He doesn't foresee any problems in getting other ISPs to host the service. "Skype is better. It is the first peer-to-peer internet telephony network. It uses a small amount of processing power from each of the computers signed up to Skype. The service can grow exponentially and isn't limited by the size of servers running VoIP or the number of users."
Other VoIPs pass through central servers whereas peer-to-peer file software by-passes networks and communicates only with the other user, which, says Zennstrom, offers superior sound quality and won't drain server resources.
"The network is made up of consumers' PCs. The power of the network grows with the number of users on it. Technologies such as peer-to-peer will benefit ISPs as they enable broadband proliferation," adds Zennstrom.
He aims to make a profit when he rolls out additional premium services, such as calls to mobiles, later in the year and he isn't planning to look for advertisers, focusing instead on developing and researching Skype.
"The product speaks for itself," Zennstrom concludes. "Giving away something for free incorporates some of the best marketing you can do."
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