Walt Mossberg

With Its New Version, Skype Phone Service May Enter Mainstream

One of the cult hits of the Internet has been a service called Skype, based in Luxembourg, that allows its registered users to make free computer-to-computer phone calls to each other anywhere in the world. Millions of people world-wide use it, and the company was recently snapped up by eBay, the e-commerce giant.

Still, for all its success, Skype has been a niche product, little used by mainstream, non-techie consumers. Much less popular in the U.S. than in Europe, it has mainly appealed here to budget-conscious folks like students and recent immigrants, who often want to make lots of international phone calls.

There are two big reasons for Skype’s niche status. First, many computers aren’t equipped with microphones. Most modern laptops come with built-in mikes, but the vast majority of PCs are still desktops, which typically lack mikes. Second, even when computers have mikes, they make clumsy telephones when compared with real phones, which are specifically designed for voice communication.

In addition, free Skype calls can be made only to other Skype users. If you want to call nonmembers who use real phones, you have to sign up for a prepaid service called SkypeOut, although, at two cents a minute, the calls are cheap.

Now, however, Skype is putting those hurdles behind it. Today, the company plans to release a major new version of its phone-calling software, Skype 2.0, with added features — including video calling — and a cleaner interface. It is taking steps to make computer microphones cheap and easy to obtain. More importantly, it is moving its service off the computer to a new breed of Internet-based telephone handsets.

I’ve been testing Skype 2.0, along with the new, cheap, Skype-branded microphones and a new Skype-compatible phone that frees users from sitting in front of a computer while talking. Despite some flaws, this new combination of hardware and software generally worked well, and I believe it stands a chance of propelling Skype into the mainstream.

There’s nothing new about using a computer as a phone. And free computer-to-computer phone calls, among fellow users of a service, are also common now. America Online, Yahoo, Microsoft, Apple Computer, Google and others have offered this service for a while. Most also already offer free video calls — something Skype is just now adding — for users with Web cameras.

But Skype is the company most identified with free Internet phone calls, and it is trying hard to keep that status. The new Skype 2.0, available at Skype.com, is ready now for Windows and will soon be released for the Macintosh and other platforms.

In my tests of Skype 2.0, I used two different Windows computers to place voice calls to Skype users in California, New York and Berlin, Germany. I also made a couple of SkypeOut calls to phones in the Washington, D.C., area.

The new Skype software was easy to use. It searches for people you know to see if they are registered members, and it lets you add them to your contact list with one click.

All my test calls were very clear, though in most cases there was a slight problem in the first few seconds, when callers couldn’t hear me. In a couple of cases, the sound dropped out briefly during a call. And Skype disconnected my call to Berlin in the middle, forcing me to redial. Still, as a tradeoff for free calls, the glitches were tolerable.

I used a variety of microphones, built-in and added-on, cheap and expensive. In general, the built-in and costlier add-on mikes worked best. Skype’s new cheap mike, which comes with an earbud as part of a $4.99 Skype “starter pack” available at RadioShack stores, was a little muffled unless I held it close to my mouth.

I also made a few video calls, using a Logitech Web camera. These worked fine, though they displayed the graininess that marks most Web video calling. An audio conference call also worked well, though you can’t use video if you’re calling more than one person. Skype also offers a conventional text-based chat system and a feature for transferring files. I tested both, and they worked fine.

But I was most impressed with the new Skype phone I tested, the $100 Linksys CIT200. It looks and works like a regular cordless phone. But it links wirelessly to a little base station that connects to your computer. And it has a big Skype button that connects you to the Skype service via the PC. The phone displays your Skype contacts, and you call them with the press of a button. You can also make calls to non-Skype phones, via SkypeOut.

I tested the phone by calling both Skype users and non-Skype users, and it worked great everywhere in and around my home — upstairs, downstairs, even outside in the yard.

There are other phones that can now use Skype, ranging from a $16 handset that connects to the PC with a cable to a $100 cellphone-style wireless headset and a $140 cordless phone that can use both Skype and your regular phone service to place calls. All of them liberate Skype users from the PC.

Skype has escaped from its niche and is heading for the mainstream. You might want to give it a try.

Write to Walter S. Mossberg at mossberg@wsj.com.

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