Everything You Ever Wanted to Know About Skype

For our MMC-5006 mid-term project, I am analyzing the social channel Skype…

Social Network or Content Community?
Skype is a service that enables social sharing for both personal and business purposes. People use it to connect directly with friends/family and business associates, i.e. – those with whom they already have some type of connection. By that definition alone, it would be considered a Social Network and not a Content Community. By the company’s own definition of purpose, Skype is “for doing things together, whenever you’re apart. Skype’s text, voice and video make it simple to share experiences with the people that matter to you, wherever they are. In the workplace, this means you can bring your entire ecosystem of workers, partners and customers together to get things done.”

What does Skype Do?

Skype is an IP telephony service provider that works via application software (app) and offers free calling between subscribers and low-cost calling to people who don’t use the service. In addition to standard telephone calls, Skype enables video chat, file transfers, and (send only) texting. The service is available for desktop computers, notebook computers, tablets, and other mobile devices, including mobile phones.

History:

Headquartered in Luxembourg, Skype’s roots trace back to Kazaa, the very popular, early-2000’s peer-to-peer file sharing network which ultimately usurped Napster because it could not only share music files, but also video and various programs as well. Kazaa was initially created by programmers in Estonia and then purchased by Niklas Zennstrom and Janus Friis of Sweden and Denmark, respectively. Zennstrom and Friis further developed Kazaa and by 2003, it became the most downloaded piece of software ever. They sold the company to Sharman Networks shortly thereafter and set out to build Skype. The name for the software is derived from “Sky peer-to-peer.”

The basic structure of a peer-to-peer file sharing network is that whoever’s on the network is connected to everyone else on the network, with no official central server or group of servers sitting in the middle holding all the files. The more people who are on the network, the faster the network can send files back and forth. And the more people who have the same file on their computer, the faster it could be sent to someone trying to download it. Skype used the same type of peer-to-peer networking idea that Kazaa was built upon, but applied it to voice transmission instead, and the idea was that the more people that used Skype, the more reliable the connection would be for each of them.

In 2005, the company was acquired by Ebay for $2.5 billion, sold again in 2009, and in 2011, it was purchased by Microsoft for $8.5 billion. In the subsequent 4 years, Microsoft has been integrating Skype technology into its own products.

How does Skype work?

Skype is a proprietary voice-over-internet-protocol (VoIP) system using its own protocol based on peer-to-peer networking. Essentially, it works by creating ad-hoc, direct communication between two computers on the Internet in a similar way to file-sharing systems (such as Kazaa). Apart from a log-on server that grants access to the network, Skype is completely decentralized and distributed: there’s no centralized “Skype control system.” At any given moment, there are something like 15–30 million Skype users logged on worldwide. When you sign on to Skype, your computer becomes one node in a global network of equal peers. Each Skype user runs a piece of software called a “client” that allows them to send messages to other Skype users, make calls, send files, and play real-time games. Each of the clients becomes an active part of the network and, whether it’s actively sending messages or not, helps the network as a whole to locate and route traffic to other users. Within the network, some of the users with highest bandwidth and best connectivity, known as supernodes, act as traffic hubs. The network as a whole is made up of supernodes connected to one another, with each supernode linking to many ordinary nodes.

The biggest advantage of VoIP is call cost, which is typically either free or much less than making traditional calls. VoIP is easy to set up, and generally requires no long-term contract. You can usually send any kind of data over VoIP, from text and images of your computer desktop to voice and webcam chat. Another big plus is that VoIP liberates you from a fixed, physical location; if you have a Skype username, you can sign in with it and receive calls from anywhere in the world.

The biggest drawback of VoIP is call quality, which is neither as good or as reliable as you’d get with a direct call between two landlines. Although the sound quality itself may be poorer, most people these days are used to the highly variable quality of cellphone calls.

Skype uses encrypted communication between peers, which definitely makes it more secure than landlines and cellular calls, but it is not without its critics and a history of hacks. The company, especially since being acquired by Microsoft, has, according to a 2012 Washington Post article “expanded its cooperation with law enforcement authorities to make online chats and other user information available to police.” The article additionally mentions Skype made changes to allow authorities access to addresses and credit card numbers.

User numbers:

Skype’s analytics are a bit vague and my research turned up some very disparate numbers, but the most closely corroborated appear to be from 2014 which indicate over two million registered users and over 46 million unique users utilizing the application over 300 million times monthly with a record of over 50 million concurrent users. (You do not have to be a registered user to be a part of the process). Growth numbers for International call market share are impressive:

Year   International call market share
2005   2.9%
2006           4.4%
2008   8.0%
2009   12%
2010           13%
2012   33%
2013           36%
2014           40%

Target Audience:
Initially utilized by and marketed to individuals as a cheaper alternative to landline or cellular telephone service transfer of voice/video, Skype still does promote its free personal/small group service which allows the user simultaneous connection with up to 25 others, but it also has fully expanded a pay service into the business market as well with capabilities of sharing among groups up to 250 users and “broadcasting” conversations to up to 10,000. So, the company as a whole has a bit of a dichotomy as its target market – individuals/small companies and larger businesses. (More on this in a moment.)

Integration with Social Channels:

By nature of its product and purpose (and proprietary protocol), Skype does not particularly need to integrate operationally with other social sharing networks, although it does have a (recently diminished) relationship with Facebook. In a recent surprise announcement, Skype announced that the company would be dropping Facebook integration. According to Skype, users will no longer be able to send messages to their Facebook from Skype. Additionally, users will not be able to see their friends’ Facebook News Feed on their Skype Home or post Facebook statuses from Skype. Older versions of Skype will no longer allow the user to sign in with their Facebook account as it previously had. The tie is not completely severed as users can still search for their Facebook friends on Skype and add them to their Skype contacts.

The company definitely does have its own presence on SM. One may find them on Facebook, Twitter, Instagram, Pinterest, and more. Skype has over 35 million in total social media audience. They appear to be most active on Twitter but its highest engagement comes via Instagram. Video, naturally, is their stock-in-trade type of post and gets the most engagement. When Skype began to engage consumers on social channels, the company quickly realized that it needed to humanize its brand story in order to create engaging and shareable content that would result in product awareness and downloads. Skype made a strategic decision to change the conversation from tech talk to user stories that highlighted the deep emotional connections with friends and loved ones that Skype enables. By sharing users’ moving stories, consumers learned about the many everyday uses of Skype. As a result, Skype’s key business metrics skyrocketed.

Mobile friendly?
You bet. Skype interfaces with iPhone, Android, Windows Phone, Blackberry, Symbian, and more. Also AT&T recently announced that they will be joining forces with Microsoft to deliver Skype for Business to its global user base. Available in different delivery modes to AT&T subscribers, Skype for Business will be a mainstream offering in more than 140 AT&T supported countries.

Who is using Skype Effectively?
Skype attracts a large, socially influenced, highly mobile audience for frequent, long conversations that demand deep attention. Dating back to its inception, Skype has continued to grow a user base of budget-minded individuals wanting to converse with friends across oceans, and has now also become a go-to communication channel for businesses large and small to do videoconferencing, file sharing, and more. Some users have gotten exceptionally creative in their usage of Skype. Check out this list. For celebrities and others of note who use the application, check out this list.

And, of course, the Mother of All Endorsements…

Still another interesting group using Skype now are educators. Teachers and schools are using the service with increasing frequency with global education projects, connecting students who speak different languages and conducting virtual field trips. And speaking of foreign languages and Skype, check this out!

So what are Skype’s main features?

Skype essentially comes in two flavors – free and paid – and there is a not-insignificant amount of discussion as to which is better for certain users. With the free version, users can make and receive online calls to/from other Skype users around the world. Via pre-purchased Skype Credit, for a very small fee users may also make calls to call landlines and mobile numbers worldwide. (This feature was formerly known ads SkypeOut, but is now branded as “Calls to Mobiles and Landlines.”) Users may also send, BUT NOT RECEIVE SMS messages via the application. (The latter has been a source of angst for unwitting users who got Skype as an alternative to a mobile phone.) The free version allows conference calls, video chats, and screen sharing with up to 25 other connection points simultaneously. It also allows limited file sharing. Free Skype users can obtain a Skype Number which allows a user to receive calls dialed from landlines or mobiles to that number as a local call, regardless of where the call is originating (formerly called SkypeIn). Skype does not support emergency calling – i.e. – 911.

The paid version has recently been re-branded as Skype for Business and has been integrated by new owner Microsoft into its Office systems as a replacement for its previous messaging service, Lync. Skype for Business offers capacity and productivity advantages geared for big businesses – or at least those who want to look big. It features a much more expanded reach with a max limit of 250 simultaneous connections, expanded file sharing capabilities, and a multitude of onscreen call management tools. Another benefit of the paid service is Skype Meeting Broadcast which allows users to produce, host, and broadcast online meetings to up to 10,000 people. Attendees can join from anywhere on any device and engage in the meeting. Another big selling point of Skype for Business is that it comes with enterprise-level security.

There are actually two basic purchase plans for Skype for Business. “Online Plan 1” costs $2 per user per month with a yearly contract. It covers basics, but some feel the cost differential is not worth what users get beyond using standard free Skype. “Online Plan 2” costs $5.50 per month per user and offers significantly more features including high-definition video to group conferences, the ability to join meetings from a web browser, desktop sharing and remote control, Outlook schedule integration, the ability to record meetings, and more.

So, the question arises – which type of business should use free Skype and which should use Skype for Business? Opinion is divided about which is the right option. Microsoft itself advises that free Skype is suitable for businesses up to 20 people. For larger businesses, Microsoft recommends Skype for Business, pointing to the many additional features, specifically those in the security and user reach areas. Some IT experts such as Nick Espinosa of BSSI2 opine that while the Skype for Business features are nice, most companies do not need to make the jump from standard Skype.

Ultimately, investing in Skype for Business would appear to be the choice for enterprises who want to:
-have very large meetings
-integrate easily with Microsoft Office apps
-have AES-encrypted security
-set up sophisticated conferences

For a small business, free Skype should fit the bill for them if what they want is to:
-replicate in-person meetings
-enhance multi-tasking
-cut long-distance costs
-work from home
-expand potential client pool
-recruit and hire employees from a larger pool

Another special service offered by Skype which could be of interest to some is Skype on Xbox One which allows home users to keep in touch with friends and family on their TV via a wide angle camera and customizeable settings through their Xbox One gaming console.

Competition:

The greatest present day threat to Skype – at least standard free Skype – is Google Hangouts. The service which debuted in May of 2013 has gained a significant number of users and boats a number of competitive alternatives. Here is a good comparison chart.

In a previous ad campaign, Skype took a shot at Twitter and its lack of video chat capabilities, encouraging folks to ‘return to face-to-face communication’ and attempting to position itself as mankind’s “one way ticket back to humanity.”

Skype uses more data than virtually ALL of its competitors. The app consumes over 2.7 times the amount of data per minute than the most economical apps. On the upside, however, Skype rates the highest in call quality over that same competition.