One of the initial names for the project was "Sky peer-to-peer", which was then abbreviated to "Skyper". However, some of the domain names associated with "Skyper" were already taken. Dropping the final "r" left the current title "Skype", for which domain names were available.
In September 2005, SkypeOut was banned in South China. In October of the same year, eBay purchased Skype and in fall of 2009 sold a majority stake to an investor group. In December 2005, videotelephony was introduced.
In April 2006, the number of registered users reached 100 million. In October, Skype 2.0 for Mac was released, the first full release of Skype with video for Macintosh, and in December, Skype announced a new pricing structure, with connection fees for all SkypeOut calls. Skype 3.0 for Windows was released.
In 2006, a now-discontinued feature called "Skypecasting" was introduced. It allowed recordings of Skype voice over IP voice calls and teleconferences to be used as podcasts. Skypecasts remained in beta until its end. Skypecasts hosted public conference calls, up to 100 people at a time. Unlike ordinary Skype p2p conference calls, Skypecasts supported moderation features suitable for panel discussions, lectures, and town hall forums. Skype operated a directory of public Skypecasts. Skypecasts was discontinued as of 1 September 2008.
Throughout 2007 updates (3.1, 3.2 and 3.5) added new features including Skype Find, Skype Prime, Send Money (which allowed users to send money via PayPal from one Skype user to another), video in mood, inclusion of video content in chat, call transfer to another person or a group, and auto-redial. Skype 2.7.0.49 (beta) for Mac OS X released adding availability of contacts in the Mac Address Book to the Skype contact list, auto redial, contact groups, public chat creation, and an in-window volume slider in the call window. During several days in August, Skype users were unable to connect to full Skype network in many countries because of a Skype system-wide crash which was the result of exceptional number of logins after a Windows patch reboot ("Patch Tuesday"). And in November, there was controversy when it was announced that users having London 7 numbers would lose them.
In 2008, Skype released various updates including versions for the Sony PSP hand-held gaming system, version 2.0 for Linux with support for video-conferencing, and version 4 for Windows (with both a full screen and a compact mode). This version dropped support for the "Skype Me" presence indicator, which meant that a user was interested in receiving Skype calls from a non-contact. Skype also discontinued its SkypeCast service without explanation and added internal monthly and daily usage caps on their SkypeOut subscriptions, which had been advertised as "Unlimited". Many users and observers had commented on the high rate of dropped calls and the difficulty reconnecting dropped calls. Skype was used in the seventh season of the U.S. syndicated version of the British game show Who Wants To Be a Millionaire in a new Ask the Expert video chat lifeline. In October, analysis revealed TOM-skype—the Chinese version of Skype run by TOM Online—sends content of text messages and encryption keys to monitoring servers.
In 2009, Skype 4 was released, the Linux client was updated, and Skype for SIP, a service aimed at business users, was launched. At that time around 35% of Skype's users were business users. In April 2009, eBay announced plans to spin off Skype through an initial public offering in 2010. In August, Joltid filed a motion with the U.S. Securities and Exchange Commission, seeking to terminate a licensing agreement with eBay which allows eBay (and therefore Skype) to use the peer-to-peer communications technology on which Skype is based. If successful, this may have caused a shutdown of Skype in its current form. In September, eBay announced the sale of 65% of Skype to a consortium of Index Ventures and Silver Lake Partners. Early in September, Skype had shut down the Extras developer program. In November, eBay completed the sale of 70% of Skype to a consortium comprising Silver Lake Partners, CPPIB, Andreessen Horowitz, and the original founders valuing the business at USD2.75 billion.
In 2010, a report by TeleGeography Research stated that Skype-to-Skype calls accounted for 13% of all international call minutes in 2009; out of the 406 billion international call minutes a total of 54 billion were used by Skype calls. In May, Skype 5.0 beta was released, with support of group video calls with up to four participants. Also in May, Skype released an updated client for the Apple iPhone which allowed Skype calls to be made over a 3G network. Originally, a 3G call subscription plan was to be instituted in 2011, but the plan was eventually dropped by Skype.
On 9 August 2010, Skype filed with the SEC to raise up to $100 million in an initial public offering. In October 2010, Skype announced it had named Tony Bates as their CEO; Bates has been a senior VP at Cisco and responsible for its multi-billion-dollar enterprise, commercial and small business division.
On 14 October 2010, Skype 5.0 for Windows was released with a number of improvements and feature additions, including a Facebook tab to allow users to SMS, chat with, or call their Facebook friends via Skype from the News Feed.
On 14 January 2011, Skype announced the acquisition of Qik which is a mobile video sharing platform.
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