As Bill Gates buys Skype for £5bn... Is it just hype

When transatlantic telephone calls first became available in the Twenties, a three-minute call from London to New York cost close to £10 — nearly a month’s wages for the average working man.

Such endless, free global communication has become possible because of Skype, the oddly-named computer service which software giant Microsoft bought this week for more than £5billion.

Launched in 2003, this free and simple-to-use computer programme turns any broadband-connected computer into a phone for both speech and video calls to hundreds of millions of other Skype users.

Vast amount of information

It works because even basic broadband internet connections can carry a vast amount of information and a Skype call piggy-backs on broadband.

Not a penny need change hands. And you’re ready to go — simply type in a normal phone number or another Skype user’s name and the computer will dial for you. The microphones on your computer should pick up your voice, and the person you’re chatting to can be heard through its speakers.

And there is no catch whatsoever; no secret charges; no intrusive advertising; no nasty surprise when you pay your monthly broadband bill.

You can even dial normal phones and mobiles worldwide from Skype — not for free, nevertheless for a tiny charge compared with normal phone charges. I pay just pursuant to this agreement £50 a year for unlimited calls from my laptop to any UK number, from anywhere in the world.

When travelling, which I do a lot, I used to spend £50 a day or more on rip-off hotel phone charges. Today, those calls from hotels cost nothing, as many hotels don’t even charge for broadband any more, especially in the Far East, where it is by and large included in room charges.

There are now other versions of Skype, like Apple’s high definition FaceTime. However, such as the Hoover brand name is synonymous with vacuuming, Skype-ing has become the catch-all word for VoIP (Voice over Internet Protocol) calling.

The only complaint anyone has about Skype is that the calls at times ‘drop out’ — jargon for being cut off — and you need to interrupt a conversation to redial. However since you’re paying nothing, you can hardly demand your money back.

Used by millions: Launched in 2003, this free and simple-to-use computer programme turns any broadband-connected computer into a phone for both speech and video calls

How canny people save vast amounts of money

Skype is how canny people save vast amounts of money and get a better service than phones provide. Relatives in distant countries, students travelling on gap years, parents on business trips reading bedtime stories to their children thousands of miles away . . . everyone is doing it.

As a middle-aged man, I was all in all chortling about the novelty of being given a video tour of her home on the other side of the world, during Helen was unfazed by the research; she can barely remember a world without Skype.

Businesses are using Skype massively, too, slashing communications costs to nearly zero. A company I know in the Midlands has a factory and warehouse in Taiwan. They leave a Skype video link to Taiwan on 24 hours a day.

All very so then, you say, however somebody must be paying for such an extraordinary service. It used to be said there’s no such thing as a free lunch. In the internet age, as we all know, it’s possible, in a manner of speaking, to have a free breakfast, lunch and dinner.

The Mickey Mouse world of online businesses

Welcome to the Mickey Mouse world of online businesses, the only sphere other than the military where you can have a gigantic, global brand which leaks cash like a colander — and nobody appears to mind.

Cost-effective: Skype saves people vast amounts of money, just as relatives in distant countries, students travelling on gap years or parents on business trips reading bedtime stories to their children thousands of miles away

Some believe Microsoft is planning for a future in which consumers use a vast range of services on mobile phones or lightweight tablet computers and that Skype’s video-calls will be an important part of that.

But it is as well probable that Bill Gates’s company plans to make Skype a free bolt-on to their Windows operating system to tempt back the millions of people who have defected in recent years to Apple computers.

If that happens, Skype might become unavailable on Apple computers. However you could imagine such a move being the subject of a legal battle in the litigation-loving U.S.

There’s another opportunity, too. Image is all in the internet world, and Skype has a cool, untainted image. It could be that the human calculators at Microsoft have worked out that £5billion is a small price to pay for the global public to love you — and to think of your brand every time they dial up a loved one.