Skype is a messaging service that allows users to make VoIP (Voice Over Internet Protocol) calls to each other over computers, phones, and other mobile devices.  VoIP calls can deliver a higher sound quality for a significantly smaller price, which in theory should make landline calling (aka POTS – Plain Old Telephone Service – how absurd is that acronym) obsolete.   Skype connects users through a network of numerous decentralized Internet nodes and super-nodes that make the traffic efficient, but also make specific calls extremely hard to intercept and/or eavesdrop on. 

Government agencies trying to spy on calls were frustrated with both the Skype network and the fact that Skype wouldn’t release its encryption codes (being a European company, it wasn’t required to). In 2009, NSA quietly offered a reward of “billions” for any firm that could offer reliable eavesdropping on Skype.  In 2011, Microsoft bought Skype for $8.5 BILLION, which was surprising financially since Skype had a $7M operating loss the year before, was $686M in debt and was valued by analysts at around $3-4 billion.  Moreover, Microsoft’s Windows Live Messenger was basically providing the same service as Skype, and was about 3 times as popular. 

Microsoft then went about changing the internal Skype network, re-engineering the supernodes and re-routing the calls through monitored servers.  The end result was a VoIP call that was easy to track, trace, and listen in on – even more so now that Microsoft, a Washington-based company, has the encryption codes.  The bottom line? If you’re using Skype, you might as well assume that the NSA, the agency accused of keeping a secret dossier on every US citizen, is listening in.

PS - Ironically the term “Wiretapping” is the most outdated term possible for this scenario.

PPS - Dear NSA, if you’re reading this, I love you and I’d love to come work for you… Should I send in my résumé or is your secret dossier on me is enough