Martin Vander Weyer Martin Vander Weyer

A radical change in the relative value of everyday things

A radical change in the relative value of everyday things

It was a man in my club who first enthused to me about the special attractions of Skype. Given the normal boundaries of clubland conversation, this might suggest to those unfamiliar with the name that Skype is either a shooting estate in the Highlands or a dominatrix in Bayswater. But mine is an enlightened sort of club, providing a ‘business room’ equipped with modern technology, and what the member in question was so excited about was the fact that he had just made a free phone call to South Africa through a head-set connected to his laptop.

The software that made this possible is called Skype. It costs nothing to download, and calls between its users anywhere in the world are free. Though big names such as Microsoft and Google are positioning themselves in the same territory, Skype is currently the hottest thing in ‘voice over internet protocol’ (‘VoIP’) telephony. So hot, in fact, that eBay, the online auction house, agreed last month to pay $4 billion for it.

This fortune has been collected by Niklas Zennström and Janus Friis, respectively a Swede and a Dane, who founded Skype less than three years ago. Their previous venture was KaZaA, a ‘file-sharing’ network which, like the more famous Napster, was chiefly used as a source of free downloaded music — a practice that has now effectively been outlawed for breach of copyright. The Skype concept has also been criticised — for its dependency on other companies’ networks — but no one has challenged its legitimacy. It has attracted 54 million users around the world so far.

But it is still a small thing to buy for $4 billion. It generated only $7 million in income last year, and has not revealed whether it has ever made a profit.

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