As I was talking to my uncle in Poland the other day and my aunt showed me her new haircut over a webcam while my grandmother listened in on a landline from her home, we all reminisced about how not so long ago we would have had to make a reservation with an operator to make a long-distance phone call. If you were lucky and got through, you literally had to yell into the phone to be heard. The conversations were always way too brief.

Skype is a public voice over IP (VoIP) application that allows users to call each other from PC to PC free-of-charge and set up conference calls between multiple users. It also offers additional services for a small fee that allows users to make calls on landlines via Skype-out, calling in to the service (Skype-in), voicemail, instant messaging, file transfer, and video calling. Skype is available in 28 languages and is used in almost every country around the world. Thus far, there have been over 250 million downloads worldwide.

Skype was created by Niklas Zennstrom and Janus Friis both from Tallinn, Estonia in August 2003. Since its creation, the service has experienced rapid growth and was acquired by eBay in September 2005 for $2.6 billion. To this day, the service continues to gain popularity among a variety of user types. With the current recession, many companies are looking for ways to reduce communication charges. However, many organizations are skeptical of the open VOIP network.

Some of the drawbacks of Skype include no central call-log from an organization and the file transfer is only person to person. The limitation means that calls cannot go through a company?s email for virus-scanning, logging, and content control, allowing viruses and Spyware to possibly enter while confidential information leaves the organization. Additionally, voice and video calls cannot be recorded because the encryption is proprietary.

Most established businesses are not interested because they have already made significant investments in their telecommunication infrastructure including voicemail, conference room telephone systems, video conference equipment, telephone wiring, telephones, headsets, speakerphones, telephone operators, call center equipment, printed and online telephone directories, local and long distance contracts, etc. It is clear why companies would hesitate to change their intricate phone systems with Skype. However, many believe that as the technology improves and gains popularity within the corporate market, Skype will eventually become the norm.

In the meantime, I will keep reminding my grandma that she doesn?t need to yell into the computer?s microphone and continue to acknowledge that my Aunt?s hair looks great.? I?ve now installed Skype onto my G1 phone so that my friends and family can reach me at a moments notice even though we are about 6,000 miles away from each other. What a small world indeed!