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Kazaa's Makers Turn to Net Telephony

Skype launches voice-over-IP and instant messaging services.

Joris Evers, IDG News Service

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

Skype is a simple, easy-to-install client that works behind most firewalls and gateways. It offers IP telephony connections that its makers claim are often better than those of the "plain old telephony system," whose limitations have hampered Internet telephony.

First Features

Skype is free of charge during the beta period that is expected to last for another few months, says Niklas Zennstrom, chief executive officer. He cofounded Kazaa with Janus Friis, who is Skype's vice president of business development. The popular file-swapping software has become an irritation--and cause of legal action--for the entertainment industry because it allows free downloading of copyright-protected works.

Eventually, some Skype features and services will require a paid subscription or prepayment.

Skype works on a PC running Windows with a sound card, a microphone, and speakers or a headset. In the first six days since the beta's launch, Skype has signed up over 10,000 users, Zennstrom says.

"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 says in an e-mail interview.

For now, Skype users can only send messages and talk to other Skype users. However, in the future users may be able to chat with users of other instant messaging clients and to place calls to traditional telephones through the software, according to Skype.

"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," Zennstrom says.

Network on the Fly

The features of Skype don't seem much different than those of popular messaging services such as Microsoft's MSN Messenger. However, Skype contends 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," Zennstrom says.

On the back end, Skype is very different from services like MSN Messenger, according to its makers. The rival services require an expensive central directory to track 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 peer-to-peer network in which computers drop online and offline without notice. The Global Index technology sets up a multitiered network of hubs, or supernodes, on the peer-to-peer 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 Skype.

Kazaa's Cousin

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 September 2. Those problems were solved in a day, the company says.

Skype has other links to Kazaa.

Other members of the Skype team include Chief Architect Ahti Heinla and several other developers who also created Kazaa and the Joltid peer-to-peer 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," Zennstrom says.

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