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Why All the Hype About Skype?
By: Terri Wells
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    Table of Contents:
  • Why All the Hype About Skype?
  • Who is Zennstrom?
  • Give Away the Razors, Make Money on the Blades
  • The User Experience
  • But Wait, Thereís More

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    Why All the Hype About Skype? - Who is Zennstrom?

    (Page 2 of 5 )

    You may have heard Zennstromís name before. In 2000, he co-created Kazaa, the peer-to-peer file-sharing software that outdid Napster. Like Napster, Kazaa faced legal challenges in the United States because many of its users send and receive copyrighted files (such as movies and music) with the software, without paying any royalties. This has upset the music companies and movie studios. Though Kazaa beat its early legal problems -- thanks in part to its setup being far less centralized than Napster -- it faces other battles now.

    One interesting point about Kazaa is that Zennstrom and his business partner Janus Friis did not build it with the intention of replacing Napster. Their goal was to offer a legal, more efficient system to movie and recording studios for getting their products to consumers, who would pay for the material via some negotiated method. But none of the music studios Zennstrom visited in Los Angeles were interested in the technology. It would not be surprising if they were afraid of Kazaaís disruptive potential.

    Zennstrom, for his part, sold the software to Sharman Networks in 2002. On the advice of his lawyers, who are trying to disentangle him from the situation, he avoids traveling to the United States. Even if he still owned the technology, he is not interested in negotiating music and movie rights with companies; he has found a new project. This brings us to Skype. It is Zennstromís bid to gleefully take on the entrenched telecommunications companies, which have grown too big to react quickly, with new technology.

    Skype uses a technology somewhat different from Vonageís. Users need only download the software and have a headset or microphone hooked to their computer. The catch is, the only people that they can call for free are other Skype users. That is becoming less of a problem, however; as of this writing, more than 40 million people are actively using Skypeís software. Thatís not bad for just 18 months of business!

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