Kazaa makers move into IM, Net telephony

Company offers free p-to-p application

The creators of Kazaa are entering the IP telephony and instant messaging (IM) fray with Skype, a new and, for now, free peer-to-peer (p-to-p) application meant for consumer use.

Skype is a simple, easy-to-install client that works behind most firewalls and gateways and offers connections that are often better than those of the "plain old telephony system," solving most of the issues that have held back an Internet telephony boom, Skype's makers claim.

However, Skype had a rocky start. The service experienced some disruptions due to "unanticipated network growth" after the launch of the first beta late last week, according to a notice on the Skype site posted Sept. 2. Those problems were solved in a day, the company said.

Skype Ltd. was founded by Niklas Zennström, chief executive officer, and Janus Friis, vice president of business development. Zennström and Friis also launched Kazaa, the popular file-swapping software that is a thorn in the eye of the entertainment industry because it allows free downloading of copyright-protected works.

Other members of the Skype team include Chief Architect Ahti Heinla and several other developers who also created Kazaa and the Joltid p-to-p content delivery network.

"After Kazaa and Joltid we looked for the next obvious application area for p-to-p technology and we realized that p-to-p could solve the problems of Internet telephony. The telephony market is huge so it was an easy decision," Zennström said in an e-mail interview.

The features of Skype don't seem much different than those of popular IM services such as Microsoft Corp.'s MSN Messenger. However, Skype believes its product is superior.

"These IM systems are designed for IM and they have voice chat as an add-on feature, that does not make them ideal for telephony. Skype is designed from the ground to be a telephony application," Zennström said.

On the back-end Skype is very different than services like MSN Messenger, according to its makers. The rival services require an expensive centralized directory to keep track of users and their online status, while Skype does not.

Skype developed a new "Global Index" technology to enable IP telephony and IM on a decentralized p-to-p network where computers drop online and offline without notice. This Global Index technology sets up a multitiered network of hubs, or supernodes, on the p-to-p network to mimic a central directory, according to the Skype Web site.

Skype routes calls through the most effective path possible and keeps multiple connection paths open, preventing call interruptions when a node on the route signs off. All calls are encrypted, preventing eavesdropping by nodes the call passes through, according to the Skype Web site.

Skype is free during the beta period that is planned to last for another few months, Zennström said. Eventually, some features and services will require a paid subscription or prepayment.

"First we want to get what we think is a cool piece of software out there. Skype is free during the beta, and there will always be a free version. However, we plan to offer premium services on top of that. Exactly how that will turn out will depend on the feedback we get during the beta period," Zennström said.

In the first six days since the launch of the beta, Skype has signed up over 10,000 users, Zennström said. "For Kazaa it took over two months to reach this number. Skype is a true viral product, where one user will promote it to friends since they can thereby also save telephony costs," he said.

For now, Skype users can only send messages and talk to other Skype users. However, in the future it may be possible to chat with users of other IM clients and place calls to traditional telephones using the software, according to the Skype site.

Skype works on a PC running Windows 2000 or Windows XP with a sound card, microphone and speakers or a headset.

More on Skype and the free beta can be found at http://www.skype.com.

Copyright © 2003 IDG Communications, Inc.