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Skype is a proprietary, peer-to-peer telephony solution that was created in 2003 by Niklas Zennström and Janus Friis, the founders of the popular file-sharing application, Kazaa. (http://www.skype.com/intl/en/welcomeback/)




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Skype offers the Instant Messaging (IM) and Voice over Internet Protocol (VoIP) telephony solution that are used frequently today as modern and easy ways of communicating.
Skype is one of the popular and pioneers in voice communication over the Internet, and many other applications and services have followed suit, many outweighing Skype in features and quality.
You make free calls over the internet to anyone who also has the service. The service is free and is also easy to download andto use, and compatible with most computers. Skype offers free global telephony and unlimited voice calls with its next-generation peer-to-peer software.


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Skype is an application that turns a personal computer into a telephone. Skype uses voice over Internet protocol (VoIP) technology, which converts voice signals into data streams that are sent over the Internet and converted back to audio by the recipient’s computer. It functions on a P2P model rather than as a centralized application. With the P2P model, users download a piece of software that allows computers to communicate directly with one another, without having to be routed through a central location. This decentralized model allows Skype to function as a robust, distributed medium for communication. The service allows communication between Skype-equipped devices, which is free, or between a Skype device and a conventional telephone for relatively modest fees.

The Skype application Does Not Need To Be Installed On A Computer. Yes, Skype can run from a USB flash drive. Users can plug a flash drive into any Internet-connected computer and immediately have access to the service. With USB handsets, users can talk on Skype using a conventional phone device, and Skype-equipped Wi-Fi phones let users tap into the Skype service anywhere they have Wi-Fi access, without needing to have a computer.

Skype Features
User’s can modify his own profile, manage or find online contacts, choose his mode of communication (IM/ Videocall / Voicecall), manage his files online or sharing a common activity (like drawing) with other online users among many other features. In the following screenshots, each feature will be explained clearly.


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The third Screenshot displays Martin Anderson's videocall session with Barbara (fictitious account made by Skype.com) and the different options available with it. The videocall session is rather simple. The options are all explained in the user interface and the user has the option to start his video call on prompt or only to view his contact's videocall only.
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OTHER FEATURES
Features
Explanation
SkypeOut
Call traditional telephone numbers, including mobile telephones, for a fee.
SkypeIn
Receive calls on their computers dialed by regular phone subscribers to a local Skype phone number.
Skype Voicemail
Voice-mail messages for Skype users who are unreachable online.
Skype Chat
Group text chat with an interface similar to IRC with 100 People.
Skype Me
Informing that they are open to callers from around the world.
Skype Video Calling
Cross-platform video conferencing solutions between Windows and Mac. Skype only supports one-to-one video chat.
Skypecasts
Moderated conversations allowing groups of up to 100 people to converse, moderated by the "host" who is able to mute, eject or pass the virtual microphone to participants when they wish to speak.
Skype Sms
Ability to send SMS messages to mobile phone numbers.
Skype Zones
Provides access to Skype through Skype-friendly hot spots.
SkypeFind
Community-generated directory in Skype 3.1
Skype hardware
Tethered to a PC, or have a built-in Wi-Fi client to allow calling from Wi-Fi hotspots.
Voice Services:
Applications that you interact with by dialing a special Skype phone number (currently +99) – (live horoscope readings).
Productivity:
Applications that provide you with rich functionality to help you be more productive while using Skype. Examples include digital assistance.
Games:
Chess, Bingo, Backgammon, Checkers, Yatzee, Kniffel.
Personalise:
Change the way you appear and interact.
Business:
Tools that integrate Skype into your existing enterprise solution.
Development:
Assistance and software development tools for Skype applications.
Community
Websites and social networks that have been extended to support Skype.
Collaboration
Sharing applications help you work together with your Skype contacts.
Miscellaneous
Tools that provide additional functionality for how to interact with Skype and how Skype integrates with other applications.(EBay)

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Advantages of Skype
Disadvantages of Skype
Allow multiple Skype users to be online at the same time on the same broadband connection.
Target for hackers.
It gives the ability to make voice conferences (many users at a time), a feature not yet introduced by its competitors.
Closed Community - Skype is incompatible with other software VoIP clients.
The SkypeOut option allows Skype users to call traditional telephone numbers, including mobile telephones, for a fee.
Voice traffic is routed through unknown machines on the internet (supernodes). Skype is a closed client, we are unable to tell if the encryption has been broken
All its features are either free or very cheap which is encouraging for its users and potential users.
No peer review. Skype has never been through rigorous review by industry experts; this disturbs some security experts about its security levels.
Call quality is stated to be superior to other computer based VoIP software clients
Rapid spread of malicious files.
Skype is gaining much popularity and has a helpful community of users.
Network Security bypass. Skype supernodes allow a new and different way into networks that hackers can take advantage of.
It is easy to install with its wizard.
Skype currently permits multiple concurrent logins: if an attacker is able to obtain a user's login password, the attacker could login as that user, and change their status to "Hidden". Thereafter, any chat sessions involving the real user are possibly copied to the hacker's "ghost" account
Skype works behind typical network security services.
Skype provides an uncontrolled registration system for users :( you have no guarantees that the person you communicate with is the one they say they are in real life)