Story highlights The heads of Microsoft and Skype show off a new language-translation tool

Skype Translator lets speakers of different languages communicate with each other

Microsoft CEO Satya Nadella says the project is in its early stages

A beta version is expected out by the end of the year

Skype users soon will be able to expand the list of people they can connect with, says Microsoft, owner of the popular Web-chat tool.

Still in its early stages of development, Skype Translator, as it's being called for now, will provide voice and text language translation for calls between people speaking different languages.

Microsoft CEO Satya Nadella and Gurdeep Pall, the vice president in charge of Skype, demonstrated the technology Tuesday night in California at the Code Conference , sponsored by tech-news site Re/Code.

"It is going to make sure you can communicate with anybody without language barriers," Nadella said at the gathering in suburban Los Angeles. "In fact, it's the most human of things."

At the demo, Pall, speaking English, and a colleague speaking German conducted a Skype video call . There were a couple of instances when the voice and text translation mixed up minor parts of a sentence, but overall it appeared to be spot on.

The conversation was no simple "Hello, how are you?" either. It centered on Pall's plans to move to London and included the names of streets and neighborhoods in that city as well as discussion of his colleague's visits to Microsoft's headquarters in Redmond, Washington.

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The two would speak, then wait while the program translated what was just said.

"It is early days for this technology, but the 'Star Trek' vision for a Universal Translator isn't a galaxy away, and its potential is every bit as exciting as those 'Star Trek' examples," Pall said in a blog post . "Skype Translator opens up so many possibilities to make meaningful connections in ways you never could before in education, diplomacy, multilingual families and in business."

After a short delay, the system posts one user's translated comments as text onscreen to the other user while a synthetic voice speaks them aloud.

Pall said Skype Translator will be available first as a Windows 8 beta app by the end of this year.

Microsoft purchased London-based Skype, which has 300 million monthly users, in 2011. But Nadella said the translation technology the program uses has been in development at Microsoft for 15 years.

And, in another development straight out of science fiction, he said the current version is surprising even its creators.

"Say you teach it English. It learns English," he said. "Then you teach it Mandarin. It learns Mandarin, but it becomes better at English. And then you teach it Spanish. It gets good at Spanish, but it gets great at both Mandarin and English -- and, quite frankly, none of us know exactly why.

"It's brain-like in the sense of its capability to learn. It's magical."