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I like both. I use Skype more -- but this is mostly because many of my contacts are on Skype. My experience with Skype is that it can be unstable on certain links, especially using wireless internet at some hotels and such. Then again, I have used it for international connections from all over Europe, Latin America and North America and would rate my satisfaction >95%. I like Google Hangouts as well and it has been stable for me in all cases. Then again, I have not tested Google Hangouts on the same connections where Skype has experienced difficulty. I have only used Google Hangouts from wired or otherwise strong internet connections where Skype works fine as well. My sense is that Skype/Hangouts connection quality is linked directly to internet connection quality.

The link between Google+ and Google Hangouts stopped me from using Hangouts for a long time (I have zero interest in social networks), but I finally joined to use Hangouts because certain work collaborations had a pre-existing culture of using Hangouts and not Skype. Since then, I have been surprised at the number of contacts who have joined Google+ principally to use Hangouts. Anecdotally then, I would say that Hangouts is competing well and perhaps this is why Skype dropped the fee. I think my ideal scenario would be an open or standard communication protocol like email for multi-head video chat so that different people, groups could all be using different clients without being centralized in some database. This probably exists, but if everyone is on Skype/GooglePlus/Facebook it is not necessarily suitable.