Skype (IPA pronunciation: /skaɪp/, rhymes with type) is a proprietary peer-to-peer Internet telephony (VoIP) network, founded by Niklas Zennström and Janus Friis, the creators of KaZaA and competing against established open VoIP protocols like SIP or H.323. The Skype Group is headquartered in Luxembourg with offices also in London and Tallinn. The system has a reputation for working across different types of network connections (including firewalls and NAT) because voice packets are routed by the combined users of the free desktop software application. Skype users can speak to other Skype users for free, call traditional telephone numbers for a fee (SkypeOut), receive calls from traditional phones for a fee (SkypeIn), and receive voicemail messages for a fee.

In a deal generally criticised by many as overpriced, eBay has recently acquired the company for $US 2.6 billion in cash and stock, plus an additional 1.5 billion in rewards if goals are met by 2008. [1]