A lot of people in China, Taiwan, Japan and Germany are using Skype, too. There are different drivers in different countries.
Again, it's something that will prevail because it's ultimately very beneficial for end users - consumers and businesses.
And the VCR did the same thing: the movie industry thought nobody would ever watch movies any more.
Another differentiator is that Skype is free and simple to set up, and it costs us virtually nothing for a new user to join the Skype network, which is why we can offer the service for free.
At home, I still have a regular phone line because I sometimes need to send faxes.
At no charge, if they both have the software installed. Or by using SkypeOut if they need to call a land line or mobile at low rates.
At the office, we actually don't have a land phone line. We use Skype mostly, and mobile phones to receive calls from people not on Skype.
But let me stress that Skype to Skype calls and all the features that you see today - except for SkypeOut - will remain free.
But that technology enabled the movie industry to make much more revenue. The single largest revenue source for the movie industry is videos.
If you can use a Web browser, you can use Skype.
If you could utilize the resources of the end users' computers, you could do things much more efficiently.
In fact, we just surpassed our first 1 million simultaneous users online.
It is very similar to companies like Google and other internet companies. When you go and search on Google you don't pay for that. But sometimes you click on an advert and Google makes money on that.
It was more a technical proof of concept that it was possible to transfer files between two end users rather than going through servers.
It's the same thing with Skype. Some users are paying for services, but not everyone.
On the other hand, Skype, just like Kazaa and other software, are encouraging people to buy broadband connections.
Our early adopters were primarily male, 18 to 38 years old, but we have users now from across every demographic, from young children using it to keep in touch with a parent who may be traveling on business to great grandparents using it to keep in touch with family living all over the world.
People need to access Skype wirelessly, no matter where they are, and what happens is that we'll be taking advantage of the rollout of Internet everywhere - WiFi and WiMax in particular.
Skype is easy enough to use so that people don't need to be tech savvy - a lot of users just want to communicate with their friends and family, and they find this is the easiest, cheapest way.
Skype is for any individual who has a broadband Internet connection.
Skype to Skype lets you call anyone else in the world who has downloaded the Skype application on their computer or PDA, for free.
The average call time is over 6 minutes - longer than traditional phone calls.
The telephone is a 100-year-old technology. It's time for a change. Charging for phone calls is something you did last century.
Then people started using it more and more and it became the most downloaded software on the internet.
They also can combine voice with instant messaging and online file sharing.
Today, less than half of the population has broadband. This enables the phone companies to sell broadband to the other half.
We also have a conference call feature where up to five people can talk on one Skype call.
We decided to make Skype available on multiple platforms and independent of the PC.
We don't have any launch dates yet for any of those platforms. It's going to be wonderful to be able to make a Skype call from cell phones or PDAs.
We don't need to make as much money per user as the traditional phone companies because our marginal costs are so low.
We have 2 million users in the U.S. and about 13 million worldwide in more than 200 countries.
We have a much higher penetration in countries like Brazil and Poland, where phone rates are high and service is hit or miss in some places.
We have just started, and if you compare the number of people using Skype to the number using a telephone network around the world, we're still just starting.
We started with Pocket PC, and now we're looking at other mobile platforms like Windows SmartPhone, Symbian and Palm.
We were founded on Aug. 29, 2003, and now have 70 employees, about half in London and half in Tallinn, Estonia, and some in Luxembourg.
We're getting 80,000 new users each day. And more than half a million people are connected via Skype at any given moment.
What we are doing is taking advantage of the broadband Internet to provide basically unlimited free calls to anyone at a higher voice quality than they can with the phone lines.
When radio stations started playing music the record companies started suing radio stations. They thought now that people could listen to music for free, who would want to buy a record in a record shop? But I think we all agree that radio stations are good stuff.
With our work at Kazaa, we began seeing growing broadband connections and more powerful computers and more streaming multimedia, and we saw that the traditional way of communicating by phone no longer made a lot of sense.
With SkypeOut you can call anyone anywhere in the world at cheap local rates, often two or three cents a minute.
With Vonage, you're using a regular telephone, dialing a number, and its services have rates similar to the telecoms.
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