Presented by: Winnie Soh

Overview I.What is Skype? II.Features III.The Man Behind Skype IV.How it Started V.System VI.How VoIP Works? VII.Just for Thoughts VIII.Possibilities of Microsoft Acquisition IX.The Deal X.After the Acquisition XI.Reference

What is Skype ? Voice-over-internet Protocol (VoIP) service and software application which allows users to communicate with peers by voice, video, and instant messaging over the internet. hybrid peer-to-peer and client–server system, and makes use of background processing on computers running Skype software; the original name proposed – Sky peer-to-peer

Features Voice chat - Allows telephone calls between pairs of users and conference calling, and uses a proprietary audio codec. Video Conferencing – between two users was introduced in January 2006 for the Windows and Mac OS X platform clients. Skype 2.0 for Linux, released on 13 March 2008, also features support for video conferencing.16 Version 5 beta 1 for Windows, released 13 May 2010, offers free video conferencing with up to five people Messaging - Allows group chats, emotion icons, storing chat history and editing of previous messages. The usual features familiar to instant messaging users — user profiles, online status indicators, and so on — are also included.

The Man behind Skype Founded in 2003 by Janus Friis from Denmark and Niklas Zennström from Sweden. Background – Niklas Zennström  Dual degrees in Business Administration (BSc) and Engineering Physics (MSc) from Uppsala University in Sweden.  Started his professional career at the European telecom operator Tele2.  Founder of get2net, everyday.com, Kazaa, Joltid, Altnet, Joost and Skype.  Time Magazine's 100 Most Influential People List 2006  Co-recipients of the 2006 Wharton Infosys Business Transformation Award  Recently founded the investment group Atomico and has become a significant figurehead for entrepreneurs in the tech sector.

Background - Janus Friis  Has no formal higher education.  Started a job at the help desk of Cybercity, one of Denmark’s first Internet Service Provider.  In 1996, Friis was hired to run its customer support for Tele2, where he met Zennström.  In January 2000, the partners left Tele2 and started developing Kazaa.  Founder of Altnet, Kazaa, Skype, Joltid, Joost and Atomico.  Founder and chair of Rdio, an online music services company.  Time Magazine's 100 Most Influential People List  Awarded “IT-prisen” ("The IT Prize") in his home country, given by the Danish IT industry and IDG  Co-recipients of the 2006 Wharton Infosys Business Transformation Award The Man behind Skype

1996  Worked together at Tele2 to launch get2net, another Danish ISP, and the portal everyday.com  Co-founded Kazaa, the peer-to-peer file sharing application.  In August 2003, the first public beta version of Skype was released.  In October 2005, Skype was acquired by eBay for US$2.6 billion  Skype became the global leader in Internet voice communications with more than 309m.  Zennström was CEO from Skype's inception until September  Launch Joost, an online video distribution service.  EBay sold majority of its stake in 2009 to a private investment group for $1.2 billion less than it paid.Zennström was part of the investment consortium that bought Skype from eBay and has now re- joined the Skype board.  Skype posted Q earnings of $185m and 521m registered users  On May , Skype was purchased by Microsoft for a supposed $8.5 billion in its biggest ever cash deal. How it started…

System Protocol  Uses a proprietary Internet telephony Voice over Internet Protocol (VoIP) network called the Skype protocol which is based on peer-to-peer architecture, used by Skype only. Audio Codec  Uses an array of different audio compression methods including G.729 and Sinusoidal Voice Over Packet Coder (SVOPC)G.729SVOPC  Added a Skype-created codec called SILK to Skype 4.0 for Windows and other Skype clients to replace SVOPC. SILK is intended to be "lightweight and embeddable".SILKSVOPC Video Codec  VP7 is used for versions prior to Skype 5.5.VP7  As of version 5.7 VP8 is used for both group and one on one standard definition video chat and H264 is used for 720p and 1080p high definition group and one on one video chat.VP8H264 Client  Microsoft Windows (2000, XP, Vista, 7, Mobile), iOS (iPad, iPhone, iPod Touch), Mac OS X (Intel, PPC), Symbian S60, Sony PlayStation Portable (PSP), Linux (includes Android, Maemo), and for 2010 TV models from LG, Panasonic, and Samsung, but these TVs need a special webcam.

Computer VoIP Phone Cable Modem phonePhone adapter Internet Computer phone How VoIP Works?

Why Microsoft buy Skype for US$8.5 billion? Microsoft already has its own software comparable to Skype - Windows Live Messenger, which offers free instant messaging, and voice- and video-chat. Windows Live Messenger Skype  330 million active users/ mth.  40 million online users at any one moment.  Free of charge.  Does not offer phone services  124 million active users/ mth.  million online users at any one moment.  About 8 million Skype users pay for the service  Telephony infrastructure - Able to make both outbound and inbound phone calls. Just for Thoughts…

Possibilities of Microsoft’s Acquisition  User base. Microsoft hopes to sell other products to Skype's huge user base -- more than 660 million users, including more than 120 million active or "connected" users.  Peer to peer video. Lync has one-to-many videoconferencing, but Skype's peer-to- peer video chat adds another potentially more efficient and easier way to place video calls. Competitors- Cisco and Google.  Rumors of other companies' interest. Microsoft made a fairly generous offer back in April -- over the $7 billion that Skype insisted on as a starting point -- because it had heard rumors that other companies like Cisco, Google, and Facebook were interested in Skype as well.  Windows Phone 7 (Mobile OS) and Nokia. The software giant needs a competitive offering to Google Voice and Apple’s emerging communication platform, Facetime.  Microsoft is an investor in Facebook : It gets access to Skype assets and it gets to keep Skype away from Google.

The Deal..  eBay gets $2.55 billion for its 30% stake in Skype.  Niklas Zennström and Janus Friis, the co- founders, with their 14% stake, take home about $1.19 billion.  Silver Lake, Andreessen Horowitz and the Canada Pension Plan Investment Board (CPPIB) own 56% of the company, and that stake is worth $4.76 billion.  Andreessen Horowitz had 3% of the deal and made $205 million profit on their $50 million initial investment.

After the acquisition… Skype announced two new versions of its product on 17 Nov 2011: Skype 5.4 Beta for Mac and Skype 5.7 Beta for Windows. Skype 5.4 Beta for MacSkype 5.7 Beta for Windows  Include Facebook integrations that essentially add your Facebook friends to your Skype contact list.  Able to see Skype’s dashboard when Facebook friends are online, read their status updates and IM them  Users who connect their Facebook profiles can make video calls from within Skype to friends who will answer using Facebook.

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