WSJ.com - Kazaa Creators Connect to Phones

WSJ.com - Kazaa Creators Connect to Phones "The creators of popular music file-sharing software Kazaa have launched a Web site offering software that allows users to make free phone calls to each other over the Internet.
Called Skype, the software has been downloaded 520,000 times -- and has 200,000 registered users -- since a test version was made available two weeks ago, according to the Web site, growing faster than Kazaa itself in its early days. Once a user has downloaded the software, it remains on the computer.
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Skype works in a similar way to other free Internet voice services run by the likes of Time Warner Inc., Microsoft Corp. and Yahoo Inc. Skype users can call others who have downloaded the same software and registered for the service. They talk to each other via headsets that are plugged into their computers. Users need a broadband Internet connection to achieve the best sound quality, though it can work on a dial-up connection.
Skype can't be used to call existing landline or wireless numbers. But Janus Friis, one of the founders of Skype and its vice president of strategy, recently said the company plans to launch a service within six months to allow people to make calls over Skype using their traditional phones. Skype intends to make money by selling a package of additional telephone services to users, such as voice mail, Mr. Friis said. Phone calls will remain free.
Behind the scenes, Skype uses so-called peer-to-peer technology, like Kazaa, that relies on user computers, instead of a centralized server, to help route data between users making a call. That means there are no infrastructure costs for Skype."

I started using Skype this week -- it has very good voice quality; it'll be interesting to see how it scales after mainstream press coverage such as this WSJ article. The download page asserts "no spyware/adware"; I wonder if they learned their lesson from the KaZaA adware etc. experience.