Skype does offer group videoconferencing, but not in the free version. One needs to subscribe to Skype Premium to enable the group chat feature. Skype Premium also includes unlimited (subject to fair use) calls to US and Canada landline/cell phone numbers. For group video, one can chat with three or more people at a time (max 10), but importantly, only one of the people in the group chat needs to be subscribed to Skype Premium.
The others can connect with the regular free version of Skype from a computer. Note that Skype on mobile does not currently support group video chat and each of the participants in the group video chat need Skype 5.0 or higher and a fast internet connection.
Skype recommends a 4mbps broadband connection for the best video quality.
As a free alternative, one can try Paltalk's Super IM - they offer free, 10-person group video chat. Participants only need an invite to join and they can join from any web browser on any Internet connected PC - no download or installation needed.
