Skype Fights to be Heard on Mobile Phones

NY Times

BARCELONA, Spain — Josh Silverman, the chief executive of Skype, the voice-over-Internet phone service, could tick off the names of mobile phone operators that block his company’s service.

But for Mr. Silverman, a 41-year-old Michigan native, it is quicker to name those that allow it, no strings attached.

“The two operators that have really embraced us are 3 in Europe and Verizon Wireless in the United States,” Mr. Silverman said Wednesday at the Mobile World Congress, the industry’s annual convention, in Barcelona. “But we are making progress, and operators are beginning to change their attitudes.”

In a world where network neutrality has become a rallying cry for advocates of an unfettered Internet, Skype, the pioneer in low-cost and even free online calls, has become a prime example of the limits of wireless freedom.

In the United States, Skype is blocked on mobile networks, and the service is available only on the Apple iPhone over Wi-Fi. AT&T, the exclusive American carrier for the iPhone, has said that it would allow Skype and voice-over-Internet-protocol services to operate on its 3G network, but Skype has not made an application available.

In Europe, Skype is carried by the company 3 in Britain, Ireland, Austria, Denmark, Italy and Sweden. But many other cellular operators still block its calls, prohibit their customers from downloading Skype’s software or outlaw the use of VoIP service in standard sales contracts.

Some carriers are imposing fees to undermine Skype’s attraction. In Germany, customers of T-Mobile can place calls using Skype, but only if they pay an extra 10 euros, or $13.60, a month. German customers of the Vodafone Group can use the service for an extra 5 euros a month.

However, the barriers to Skype and similar Internet calling services, like Google Voice, are coming under increasing scrutiny as the Internet goes mobile. By 2013, the number of Internet-ready mobile phones will surpass the number of computers in the world for the first time, according to Gartner, a research firm.

“Such practices illustrate how operators’ business models based on control and discrimination of data flows really harm competition as well as the fundamental freedom of communication allowed by Internet,” said Jérémie Zimmermann, the director of La Quadrature du Net, a group in Paris that opposes efforts to control public access to the Internet.

Most operators and network equipment makers still perceive Skype and other Internet phone call providers to be potential freeloaders, stealing their customers while they invest billions of dollars to build out and upgrade mobile networks.

“VoIP is a great technology, but it is not a game-changer,” said Ben Verwaayen, chief executive of Alcatel-Lucent, a network equipment maker. “If everything is free, then operators will not be able to survive. The battle is not about technology but the business model.”

In the United States, last July the Federal Communications Commission asked Apple to explain why it had not approved Google Voice, an application that lets callers circumvent mobile network calling charges, for the iPhone. Apple told the F.C.C. that it was studying Google’s application.

Carriers in the United States could have more difficulty blocking VoIP services as they introduce 4G data networks, faster than 3G. The F.C.C. imposed no-discrimination rules on buyers of 700-megahertz spectrum, which is being converted from analog television use to cellular data.

In Europe, the new commissioner for digital issues, Neelie Kroes, has indicated she might put pressure on wireless operators to allow VoIP services on their networks. In a hearing on Jan. 14 before a European Parliament committee, Ms. Kroes said blocking VoIP violated network neutrality.

“It is imperative that VoIP can be done,” Ms. Kroes said before the Industry, Research and Energy panel. “That is another way of using the same infrastructure. We have to act and force those owners. There must be another argument against it other than: ‘It is against the rules.’”

Getting access to mobile networks is critical for Skype. The seven-year-old company, based in Luxembourg, has more than 500 million registered users, and they now generate 12 percent of all international calls, according to the research firm TeleGeography.

Founded in 2003 by Niklas Zennstrom and Janus Friis, Skype initially impressed technophiles but has so far largely failed to live up to its commercial potential for business VoIP services. EBay paid $3.1 billion for Skype in 2005 but was unable to fit the service into its online auction business.

Last September, eBay sold control of Skype to a group of investors led by Silver Lake Partners, a Silicon Valley private equity firm, in a deal that valued Skype at $2.75 billion. EBay, which retained a 35 percent stake, said Skype made a $48 million profit in the third quarter of 2009 on $185 million in sales, the last results published before the company was sold.

Mr. Silverman, the former chief executive of Shopping.com, also owned by eBay, foresees regulators in the United States, Europe and elsewhere putting pressure on operators to permit VoIP services.

“Truth and justice are on our side,” Mr. Silverman said. “We think it is a ridiculous argument to say these are ones and zeroes we like and these are ones and zeroes we do not like.”

In some quarters, resistance to Skype is waning. Operators like Belgacom in Belgium experiment with the service without fanfare, to see if it attracts and retains customers.

Skype’s deal with Verizon Wireless, the largest United States carrier, may also make the service more available. In exchange for access to its 3G network, Verizon attached many conditions to its agreement with Skype.

Skype users will have to buy voice and data plans from Verizon Wireless and also one of nine smartphones sold by the operator. Also, any Skype calls placed to United States residents who do not have Skype accounts will be deducted from the caller’s package of Verizon voice minutes.

Calls placed outside the United States and domestic calls to Skype users will be free.

“The Skype-Verizon announcement demonstrates that mobile operators are beginning to change their attitude,” said Dario Talmesio, an analyst at Informa Telecoms and Media, a research concern based in London. “However, the majority of mobile operators have yet to make a firm decision. Blocking VoIP is a short-sighted strategy.”

Mr. Silverman said Skype would never pay to win access to mobile networks. “Being a free service is core to our value proposition,” he said. “We see no plans to change that.”

Skype Founders Pondering IPO Don’t Need ’Love’ From Andreessen

Bloomberg

One night in 2007, employees at Skype Technologies SA decided to send a message to their new corporate parent, EBay Inc. They picked up the desk of Henry Gomez, an EBay senior executive and Skype’s president, and moved it to a far corner of the company’s London office, says a former EBay senior manager.

The prank underlined how relations had deteriorated between Niklas Zennstrom, Skype’s co-founder and chief executive officer, and the online auction giant, which had acquired the startup two years earlier. In September 2007, he quit as CEO of the Internet phone company.

Two years later, Zennstrom and Janus Friis, his fellow Skype co-founder, have elbowed their way back into the company, Bloomberg Markets magazine reported in its February issue. In September, they waged a legal fight against EBay and a buyout group led by private-equity firm Silver Lake that had acquired control of Skype for $2 billion. The suits alleged that the consortium and EBay had unlawfully used the founders’ copyrighted software that they’d licensed to Skype. The consortium and EBay denied the allegation.

In November, Skype’s new owners cut Zennstrom and Friis in for a 14 percent stake and two board seats, and the duo dropped their lawsuits.

“They were not going to let Skype get away from them; that’s their baby,” says Yvette Alberdingk Thijm, a former senior content executive at Joost NV, an online video company that was also co-founded by Zennstrom, 43, and Friis, 33.

Largest IPO

Now Skype, which lets users call each other for free over the Internet, could be headed for the largest initial public offering of a technology company since Google Inc.’s 2004 IPO, says Paul Bard, director of research at Greenwich, Connecticut- based Renaissance Capital LLC.

Skype has soared in popularity since it started in 2003 and boasts about 548 million users worldwide, more than Facebook Inc., MySpace Inc. and Twitter Inc. combined. Skype earned $165 million in operating income in 2009, a 42 percent jump from 2008, Thomas Weisel Partners LLC estimates. If Skype increases its profits to $400 million by 2013, it could go public at a valuation of $4 billion, says Bard, who specializes in IPOs.

“Investors would have a big appetite for a profitable Internet IPO with its growth and scale,” he says.

Zennstrom and Friis will have to get along with some of the most powerful personalities in technology to deliver a hot IPO. Skype board member Marc Andreessen, the computer scientist who helped engineer the Web browser and usher in the Internet boom in the late 1990s, is working on the company’s growth strategy. A director at Hewlett-Packard Co., EBay and Facebook, Andreessen owns a Skype stake of about 5 percent through Menlo Park, California-based venture-capital firm Andreessen Horowitz LLC.

“Ongoing Battle”

Egon Durban, head of European investments at Menlo Park- based Silver Lake, is also playing a lead role at the Internet company. And EBay CEO John Donahoe will have a say in Skype’s direction; his company retained a 30 percent stake.

Phillip Phan, a business professor at Johns Hopkins Carey Business School in Baltimore, foresees difficulties in the boardroom between Zennstrom and Friis and their fellow stakeholders.

“It’s obvious that the founders have an emotional interest in the company,” says Phan, who teaches corporate governance. “I suspect you will see an ongoing battle in the executive suite between the founders and the rest of the partners.”

Zennstrom and Friis refute this assertion. “That skepticism is entirely misplaced,” their spokesman Tom Rayner wrote in an e- mail. “Niklas and Janus have a huge and genuine respect for their new partners, with whom they are very much looking forward to working.”

“Not Grade School”

Andreessen, 38, says he expects the founders to bring zeal and innovation to the company they created, not acrimony. Seated in a sunlit conference room of his venture capital firm, with a view of the redwood-covered Santa Cruz Mountains, he says all of Skype’s owners share the same goal of making it a Google-caliber business.

“What’s great about the alignment of interests is that it doesn’t require everyone to love each other; it’s not grade school,” says Andreessen, who fires off comments with the speed of a machine gun. “If Niklas and Janus have six ideas on how the company can increase exponentially from where it’s at, I want to hear those.”

The new owners’ big idea is to expand Skype into the $203 billion market for corporate telecommunications. The company, which has about 700 employees, will form a new division with a sales force, product development managers and customer-support teams to offer businesses a suite of services and software.

New Rules

“We’re chasing a big opportunity,” says Skype CEO Josh Silverman, 40, former head of EBay’s Shopping.com unit.

The Internet company will have to gain the trust of corporations, which today largely rely on dedicated fiber-optic networks for their communications. Businesses may be unwilling to switch to a phone service built on the less-secure Internet, says Vanessa Alvarez, an analyst at Frost & Sullivan in Boston.

“Enterprises aren’t completely comfortable bringing in a consumer Internet company that’s mostly used for chitchat,” Alvarez says.

Skype has also lobbied the Federal Communications Commission as part of its strategy to become available on more mobile telephones. In September, FCC Chairman Julius Genachowski proposed new rules to bar telecom carriers from blocking Internet traffic on their wireless networks, a problem that’s hindered Skype. The commission may vote on the initiative this year.

“Massive Threat”

A Skype IPO would mark a coming-of-age for Web-based social and professional networking companies such as Facebook and LinkedIn Corp. These so-called Web 2.0 startups are enlarging their online communities each month with millions of new members, who then recruit their friends, family members and colleagues to join. Skype may take market share from AT&T Inc. and Verizon Communications Inc. much like Google and Craigslist Inc. snatched advertising from newspapers.

“What’s valuable about Skype is having half a billion connected users,” says Bill Gossman, an executive-in-residence at Mohr Davidow Ventures in Menlo Park. “It has a platform for delivering all these other services, and that’s a massive threat to traditional phone companies.”

Skype makes money by charging about 2 cents a minute for calls to nonservice users. Today, seven-year-old Skype is the No. 1 provider of cross-border calls, with 12 percent of the market, estimates Washington-based TeleGeography Research Group. The company also collects fees for voice-mail, text-messaging and other services.

Like Mr. Spock

Zennstrom and Friis set out to shake up traditional industries soon after they met in 1997. Zennstrom, then a manager at Swedish phone company Tele2 AB, hired Friis to work on the customer service desk.

Zennstrom, a married Swede with dual degrees in engineering physics and business administration from Uppsala University outside Stockholm, is analytical and disciplined and shuns small talk in meetings, former colleagues say. One former colleague likens Zennstrom to Mr. Spock, the cerebral Star Trek character who prizes logic above all else.

Friis, an unmarried Danish high school dropout, is a restless man who constantly taps out text messages on his smartphone during business meetings, even when addressing others, the former colleagues say.

In 1999, the pair collaborated with engineers in Tallinn, Estonia, to write the software for Kazaa, a technology that helped upend the music industry. The peer-to-peer MP3 file- sharing program akin to Napster allowed users to copy and distribute songs without paying for them.

Whitman’s Wager

The music industry and other entertainment groups sued Kazaa for copyright infringement; Zennstrom and Friis denied wrongdoing. In 2006, the duo, which no longer owned Kazaa, took part in a settlement of the litigation.

By then, Zennstrom and Friis had already created Skype using the same peer-to-peer technology that powered Kazaa. In September 2005, Skype had 54 million users, and Google and Yahoo! Inc. were negotiating to buy it.

Meg Whitman, a Harvard Business School graduate who had been CEO of EBay from its infancy in 1998, joined the chase for Skype. Whitman, 53, boosted EBay’s sales sevenfold to $3.3 billion in 2004 from four years earlier. As revenue and profit growth slowed in 2005, she wagered Skype could spur sales by letting buyers and sellers on its auction site talk for free with a mouse click.

Missed Flight

Whitman outbid Google and Yahoo and agreed in September 2005 to pay $2.6 billion for a money-losing VoIP phone startup. The CEO sweetened the deal with an additional $1.5 billion in incentives if Skype reached growth targets between 2006 and 2009.

“With the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net,” Whitman said in a statement in September 2005.

Whitman didn’t obtain total control of Skype. Zennstrom and Friis kept ownership of the underlying peer-to-peer software in a company called Joltid Ltd., which licensed the technology to Skype. And Zennstrom intended to continue running Skype as an independent enterprise.

“We didn’t look at this as selling the company,” Zennstrom said at a technology conference in Athens in October 2005, according to Bloomberg News. “We were looking for a partner, a company that would help us grow. We hit it off well with EBay.”

Imposing Discipline

Not for long. In late 2005, Whitman and her lieutenants flew from California to Estonia, the site of Skype’s engineering staff, for their first in-depth review of the company with Zennstrom and Friis. The two men didn’t show; they’d overslept in London and missed their flight, says a former senior EBay executive familiar with the meeting. After traveling across 10 time zones, Whitman and her team had to wait hours in Estonia for the founders.

As startup entrepreneurs, Zennstrom, Friis and their engineers seemed to chafe under EBay’s bureaucratic rules, the executive says. They were obliged to produce a stream of budgets, employee reviews and weekly metrics reports.

“They didn’t say it to us directly, but they kind of looked at us and said, ‘This is stupid,’” the executive says.

EBay grew frustrated at its inability to impose discipline on the Skype camp. EBay wanted the founders to embrace a long- term growth plan that generated profits. Instead, Skype’s engineers produced applications with limited interest to consumers, such as three-dimensional chess, instead of VoIP business services, as they chased the short-term growth targets set by the acquisition’s $1.5 billion incentive agreement, the former executives say. Rayner, the founders’ spokesman, declined to comment on their tenure at EBay.

Regaining Control

When Zennstrom quit as Skype’s CEO in September 2007, EBay paid the founders and other early Skype investors $530 million from the 2005 incentive agreement. EBay also wrote down the unit’s value by $900 million.

“The Skype deal didn’t make any sense,” says George Shipp, a money manager at BB&T Asset Management Inc. based in Richmond, Virginia, which holds 1.4 million EBay shares.

Whitman stepped down as CEO of EBay in March 2008 and is running for the Republican Party’s nomination in the 2010 California gubernatorial race. Sarah Pompei, Whitman’s spokeswoman, defended the Skype deal.

“Meg strongly believes this is and will continue to be a beneficial acquisition for EBay,” Pompei wrote in an e-mail.

Legal Battle

In early 2009, Zennstrom and Friis saw their chance to regain some control of Skype as Donahoe, Whitman’s successor, moved to spin it off. They joined with Elevation Partners LP, a Menlo Park-based private-equity firm, to bid for it. On Sept. 1, EBay instead agreed to sell 65 percent of Skype to the Silver Lake-Andreessen group, which includes the Canada Pension Plan Investment Board, in a deal that valued the company at $2.7 billion.

In response, Joltid, Zennstrom and Friis’s holding company, sued in two courts in September. The suits claimed that EBay and the consortium misused the peer-to-peer software in making their deal and asked the courts to block them from proceeding. Eager to eliminate the legal distraction, the buyout group offered to bring Zennstrom and Friis into the deal.

On Nov. 5, the two agreed to invest $83 million, transfer ownership of their software from Joltid to Skype and drop their suits in exchange for a stake in the company worth $378 million. EBay reduced its equity position to 30 percent, and the buyout group decreased its stake to 56 percent from 65 percent.

“They created a big legal kerfuffle to edge themselves into the deal,” Mohr Davidow’s Gossman says.

Zennstrom and Friis disrupted the music industry with Kazaa and then earned a windfall by selling Skype to EBay. Now, they must prove that they’re entrepreneurs capable of winning corporate clients on the way to an IPO -- not just tech rebels who play by their own rules.

How Google's Purchase Of Gizmo5 Can Benefit The Consumer

from PC World

Has Google found the final piece of its voice-calling puzzle? Rumors have it that the acquisition-happy search giant has acquired Gizmo5, a Skype-like VoIP startup.   TechCrunch is reporting googlethat Google has plunked down $30 million in cash for Gizmo5, which offers a software app that lets you make free phone calls to other Gizmo users, as well as inexpensive calls to landlines and cell phones. It supports SMS and instant messaging, too.

Google has yet to formally announce a Gizmo5 buyout, but many industry watchers think acquisition is a done deal. A Google spokesperson on Monday told PC World that the company doesn't "comment on rumor or speculation."

Andy Abramson, author of the VoIP Watch blog, sees the Gizmo5 acquisition as a key component of Google's overall voice strategy. The VoIP startup's technology provides Google with a PSTN link, or a means of enabling inbound and outbound calls to convention landline and cell phones. By integrating Gizmo5's tech with Google Voice, a clever call-management app that provides one number for all of your phones, and the Google Talk voice/chat client, a powerful phone service is born.

"If you put all of this stuff together, you have something a lot more powerful than Skype," Abramson says. "Google has just gotten to where Skype wants to go a little faster, assuming the deal is done."
Free Phone Service Coming?

So how might Google integrate the various pieces of its business VoIP puzzle? And how might consumers benefit?

Given Google tendancy to stir up trouble in established tech markets -- just ask GPS mapping firms Garmin and TomTom -- a free, ad-support phone service doesn't seem too far-fetched.

"Google has a very deep investment in voice search, features that enable people to say, 'find this, find that,' and then make a phone call," Abramson says.

"Let's face it, with the phone companies monopolizing (voice calling), Google could come in and say, 'Hey, we'll give you phone service that costs nothing, and that's driven by our advertising revenue,'" he adds.

One thing's for certain: Voice will soon get a lot more interesting.

Skype Connects U.S. Soldier To Live Home Birth

Story from Skype News

Darvin Butler may be thousands of miles away from his wife while serving in the U.S. military in Afghanistan. But he won’t miss out on the birth of the couple’s new baby in the states, thanks to Skype, an online videoconferencing service.

Under a technological partnership between CompUSA and Forgotten Soldiers Outreach, Butler and his wife, Vanesia, will the technology, developed by CompUSA and FSO to be together at the time of the birth virtually.

Vanesia Butler will use of the free service to make video and voice calls to her husband from a laptop. Just in time to go online and watch his daughter's birth, Darvin Butler will receive the second laptop in the next few weeks.

Since preparing for the birth of their child, Butler, who is six-months pregnant, knew that her husband’s duties would keep him away. But now, Butler is thrilled at the prospect of her husband listening to the first cries of the baby.

“We are honored to be a part of a worthwhile organization like FSO, which inspires soldiers with hope, strength and courage,” said Gilbert Fiorentino, chief executive of Systemax Technology Group, which includes CompUSA, in a statement. “We wish Vanesia and her husband only the best.”

Butler’s place of business, located in Coral Springs, Fla. has already received two Hewlett-Packard (News - Alert) ProBook 4510s with built-in Webcams from a team of CompUSA technology experts. The team showed Vanesia how to make video and voice calls usingSkype ( News - Alert). CompUSA and CA, a leading independent IT management software company, will also donate a $10,000 scholarship for the Butler family to open a college savings account for their new baby.

Recently, the company selected Activant Solutions's Activant Eagle software solution to be its business management and point-of-sale platform. Activant Solutions said that the storewide internet in Afghanistan connectivity, which makes the product and price information available to both customers and CompUSA team members, is central to the Retail 2.0 concept and will be enabled by the Activant Eagle solution.

AT&T And Apple Handcuffing Skype Users

Story from PC World

If you've been an InfoWorld reader for more than two years or so, you no doubt remember that we used to be a magazine. Now we're online-only and doing rather well, thank you. But it's been a wrenching change, and many other publications, particularly newspapers, have not done nearly as well.

The Internet is a source of what historian Joseph Schumpeter called creative destruction, bringing with it enormous benefits along with the collapse of old business models. And now that wireless technology is well on the road to convergence with the Internet, even more business models are being challenged. Indeed, the technology itself is being pushed as consumers and businesses demand ever more complex services.

Which brings us to the latest episode of this story: Skype versus AT&T and Apple, a duopoly I like to call Ma iPhone. Since Skype put its app on the App Store, more than 2 million downloads have been recorded because people want to make cheap Skype calls with their iPhones. Go right ahead, says Ma iPhone, but you can only make those calls via Wi-Fi, not 3G.

Apple implemented the policy at AT&T's behest.

The high-speed Skype internet phone ban has touched off a wave of protests, including calls for Congress and the FCC to get involved, if not directly, via regulation that would clarify the issue of Net neutrality and wireless services once and for all. It's an important debate that speaks to issues that we in the IT community should be thinking about.

As you may have guessed, I'm on the side of the consumer. I don't buy Ma iPhone's arguments that it can't afford to give Skype, which it considers a competitor, a leg up. And I don't believe the claim made by pro-corporate bloggers that the iSkype would be a bandwidth-hogging problem child.

Just whose network is it?

Ma iPhone's argument was well summed up during an interview with USA Today. Jim Cicconi, AT&T's top public policy executive, says AT&T has "every right" not to promote the services of a wireless rival. "We absolutely expect our vendors" -- Apple, in this case -- "not to facilitate the services of our competitors," he says. "Skype is a competitor, just like Verizon or Sprint or T-Mobile," he says, adding, Skype "has no obligation to market AT&T services. Why should the reverse be true?"

On the surface, the argument has some appeal. Why help a competitor? But we're not talking about a widget maker. There is a well-established set of legal and regulatory principles regulating telecommunications networks. They must be open. AT&T can't pick and choose what services customers can use on their landlines. And it appears that the law also leans in the direction of opening the less-regulated wireless networks. "Telecommunications networks are there to provide access for everybody. If not, they [the carriers] are breaking the bargain inherent to communications," says Chris Riley, policy counsel of Free Press, a nonpartisian advocacy group that is pushing the FCC to act.

"Wireless broadband networks cannot become a safe haven for discrimination," he says. "The Internet in your pocket should be just as free and open as the Internet in your home. The FCC must make it crystal clear that a closed Internet will not be tolerated on any platform."

AT&T argues that it can't afford to deliver services to a competitor. I don't believe it. There's a lot more money to be made selling wireless services than there is in the moribund landline business. Just as InfoWorld had to change its model to live in the age of digital publishing, AT&T has to accept that its business model has to change. Like it or not, the old ways of doing business no longer work.

There's plenty of bandwidth

Riley, who sports a doctorate in computer science as well as a law degree, makes short work of the argument that Skype calls will slow down the network. "VoIP calls are low-latency, but also relatively low in bandwidth usage," he says. Indeed, AT&T, unlike some in the blogosphere, doesn't even make that bandwidth argument about Skype. But it has made the bandwidth argument about streaming video services. Several weeks ago, AT&T briefly changed its terms of service to ban certain third-party streaming video from the iPhone. It quickly backed off that position, but it's worth noting that -- while claiming streaming movies, television programs, and so on would clog the network -- the company continued to offer similar services over the same network. It even has a YouTube button on the iPhone, notes Riley. "AT&T wants to have its cake and eat it, too," he says.

I don't mean to argue that the bandwidth is unlimited. There are real issues here, and I'd encourage you to read a special report InfoWorld published on the subject late last year. Still, I think Ma iPhone is way off base in its treatment of Skype, and I urge you to defend the principle of Net neutrality, whether it be wired or wireless. But don't do so in a knee-jerk way: The destruction of business models by new technology is of great importance to those of us who make our living in media and information technology, and I'd urge you to give it real thought.

eBay Woos Businesses With Skype

As Originally Posted at San Francisco Business Times

EBay Inc.'s Internet calling unit Skype unveiled software on Monday that works on corporate telephone systems.

Skype for SIP lets workers make calls using their regular office phones instead of having to plug a headset into a computer.

SIP is the acronym for Session Initiation Protocol, a voice over Internet protocol used on many business telephony networks.

The charge for calls made to cell phones and landlines will be 2.1 cents per minute, but there will be no charge for calls made from computers to other Skype networks. The beta version is available today and the product will be fully launched later this year.

About 35 percent of its customers already use the service for business purposes, Skype said.

Skype, headquartered in Luxemburg, was acquired by San Jose-based EBay in 2005 and has been one of the best known voice over Internet protocol (VoIP) systems on the market (San Jose Business Lawyer). Speculation about its future as an eBay (NASDAQ:EBAY) picked up last week, however, when Google Inc. (NASDAQ:GOOG) announced an expanded version of a phone service previously known as GrandCentral.

Skype President Josh Silverman said at an analyst event last week that the unit had posted $550 million in sales in 2008 and would more than double that to more than $1 billion in 2011.