The buzz is rising to deafening levels for Skype, new software for making telephone calls over the Internet. It’s a new project from the Swedes who invented Kazaa, and in the last two months it’s been downloaded at a dizzying pace, setting new download records.

Skype is free software and the concept is familiar – armed with speakers and a microphone, you can “call” and talk to anyone else in the world who’s on Skype. It’s grabbing attention because sound quality is reportedly quite good and it’s relatively easy to use.

Lots of companies are investigating “Voice Over IP” (thus the new hot acronym “VOIP”) and the phone companies are scrambling to find defensive cover. Here’s a review comparing Skype with “SIPPhone,” where a specialized telephone plugs directly into an Internet connection and provides decent voice connections to another SIPPhone.

This article in Slate focuses on the possible impact on traditional telcos, especially Verizon, when this technology takes off.

For what it’s worth, I’m being cautious about jumping into this technology. There’s a lot of experimenting left to do before the programs settle down and become polished; these are “early adopters” (AKA geeks) debugging the programs now. Skype is currently giving away its software. Does anyone out there still believe that a business plan can be built on free software? I didn’t think so. Lots of changes and shakeouts ahead.

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