The history of Skype is fairly long for a technology company. First, Skype was developed as a peertopeer (P2P) free service. The connections were encrypted and difficult to intercept since you never really knew where the traffic was going in a P2P environment. There were many complaints about the performance of Skype since you had no control over each of the nodes in the network. Users accepted the slow performance since it was free.
Skype was then purchased by Microsoft. Microsoft changed the architecture of Skype to route traffic through Microsoft controlled nodes. The traffic was still encrypted, but was moving through Microsoft resources. Researchers were able to prove that Microsoft could expose the contents of the communication stream since it controlled traffic flow and encryption means.
All of that is changing. Microsoft has announced that it will use the Signal Protocol to encrypt the endtoend communications and make them private. The new feature will be called Private Conversations and will offer end-to-end encryption for audio calls, text, and multimedia messages like videos and audio files. You can only enable Private Conversations between two people and not for group calls. To initiate a new secure communication, click on the plus (+) icon and select "New Private Conversation." Select your contact and you're good to go.
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Digital Forensics/Information Security/Information Technology