VoIP (Voice over Internet Protocol) is a technology used to transmit voice messages over IP (Internet Protocol) networks. Common VoIP packages include Skype, MSN Messenger, Yahoo and many more. Everything transferred through VoIP is digital. It is also known as IP telephony, or broadband telephony. The main reason for using VoIP technology is because of cost.
VoIP allows you to make a call directly from a computer, a special VoIP phone, or a traditional phone connected to a special adapter. A high speed internet connection is required for VoIP. Usually, telephone calls over the Internet do not incur further charges beyond what the user is paying for Internet access, much in the same way that the user doesn't pay for sending individual emails over the Internet.
- VoIP on Wikipedia