CaptainAmerica Maverick gave me a bracelet tonight. A Skype presence bracelet. It shows my Skype availability when I wear it in Second Life. And if you're in 2L with me, you can use it to Skype me (I'm "Phil Arrow").

Stephen "CaptainAmerica" Klosky is using Skype's "SkypeWeb", a web service that takes a Skype username and returns that user's public status.

Web services are the life blood of Web 2.0, published protocols that open a company's software engines to programmers. SkypeWeb is Skype's only public protocol.

Skype must do more to empower developers who want to blend Skype into the rest of cyberspace. On Skype Journal's short list:

1. Turn the Skype client messaging APIs into web services. All of them.
2. Skype user authentication as a web service.
3. Directory service for public chats, public conference calls, and open contact groups.

Offering a "Naked Skype," (Skype devzone wiki, Skype issue database) a bundle of protocols to the cloud, would let developers blend Skype with any service, including email (like Microsoft, Google, and Yahoo!).

Skype is in an earnest race. (Skype management has not acknowledged this.) The company wins who publishes the most complete, friendly web services for live communication. The measure of success: developers everywhere mashing up your communications with their social networks, mashing up your social network with their services. Skype's performance so far: not in the game.

Today, for example, I must use the unscalable Skype client on projects to: 

• Write a web page that shows a Google map of the locations of a logged-in visitor's contacts, colored by contact group, indications of when they are likely to be online.
• Build a web based feed aggregator that crawls urls mentioned in buddy profiles, showing updated web pages and blog posts.
• Run gateways between the Skype network and SIP services.

In the Skype 3.0 public chat, Julian Bond said Skype's new Skype4com ActiveX wrapper gets us partway there. I suppose it does, if all you care about is embedding a Skype widget in web pages or rich clients. So much more is needed.

Web services will unleash the power of Skype's

• communication infrastructures,
• identity infrastructures,
• social infrastructures and collective social capital, and
• commercial infrastructures.

Web services open new markets, attract new customers, reinforce your value propositions.

In Second Life, web services literally open up new worlds. Skype's rivals get it and are acting now. Where is Skype's leadership in this race?

"When you go online,
you can see the world.
Richard Pombo hates that.
So he's selling control over which sites you visit
to strangers,
gatekeepers to the Internet.
People who get to choose for you.
Pombo is selling your freedom for cash.
The freedom to read what you want,
to say what you want,
on the Internet.
Fight for your Freedom of Speech.
Save your Free Internet.
Fire Pombo."

You haven't seen ads like that in this campaign. Not on TV, radio or the web.

Because Net Neutrality never cost anyone an election. And NN advocates aren't peppering the Internet or the airwaves with independent advertising for/against candidates.

Russell Shaw doesn't expect Tuesday's US election to remove Republican control of the Senate, so doesn't expect a shift in Congress's net neutrality stance.

I'll go further.

Even if the Dems win both houses of Congress, it will not matter.

Since nobody will win on a "net neutrality" platform, no political capital will be earned for NN. So NN won't be a priority in the 2008 election. It's not like anyone tied NN to big issues like jobs, the war in Iraq, political corruption, or public morals.

And nobody raised a million dollars to advocate for net neutrality.

GigaOM today reported on Vonage's latest results: new subscribers down, churn is up, ARPU is down, subscriber acquisition costs up.  All indicators going in the wrong direction; in fact, one could say that Vonage continues to dig its own hole (as predicted here and here).

Maybe Vonage's board could use Vonage's latest service announced yesterday: calling 811 for assistance in digging holes. Hat tip to Garrett Smith at VoIP Supply for digging up this story.

Questions this raises:

• Should not the FCC be developing e811 regulations? From the press release:
  • Note that 811 access depends on its availability within your area. States set their own timelines and procedures on when to call. In some states it is the law to call before you dig. Subscribers should check with their state and local governments for further information.
• Is there a Vonage VP who became totally confused when he heard about Digg.com as a "user driven social content website"?

But we'll all know when Skype is getting desperate - when they start stating: "Skype is not a telephony replacement service and cannot be used to dial 811 or other hole digging assistance phone numbers".

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I could do a long critique of every softphone out there, and there's plenty to pick apart. I thought I'd just select one little detail to show why the portal IM clients and Skype remain top dog: they just deliver what the user wants, no hassles.

Every time I log in to Windows I get this:

Go away! Shoo! Don't irritate me with unnecessary login screens. Fade into the background. I don't want to think about you until you're needed. (If the wireless Internet connection comes up too slowly, it also tends to crash.)

I suppose I should also point out some of the other usability issues. As Amazon long-ago discovered, the way you present the login/new user screen makes a big difference. If it's confusing (high cognitive load) people bail out, probably (rightfully) assuming the rest of the experience inside will be equally bad.

Gizmo fluffs this with a strange radio button layout. In the user's mind, registering is a different process from logging in, even if the information requested is identical. The drop-down text entry box is the wrong cue for creating an account name, because it implies a selection of existing data. (Yahoo is superb at managing this process in a crowded namespace.) Gizmo operates from the perspective of the programmer, not the user. Contrast with Skype:

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Yesterday Andy posted a reference to an article in today's San Jose Mercury News about various new "mobile lifestyle" companies that want to change the way we are using phones. But Michael Arrington has made an excellent point in stating that:

A bunch of VOIP services have launched to help people make cheaper calls from normal phones. None of them are compelling for the mass market.

The question any VC's need to ask when considering funding of any of these startups is "How do you intend to readily migrate these services into the mass market?".  This is a market that fundamentally picks up a handset, "dials" a number (or looks it up in an embedded directory to dial) and makes contact with the called party. Unless it can perform this basic simple algorithm for establishing a voice connection, additional services and features become technology showcases without hope for any mass adoption (and all the associated revenue opportunities).

Over the past three months I have had the opportunity to use the VoIPVoice UConnect when in my office and their CyberSpeaker W Skype phone when on the road. (Both use the same driver software and start with a standard telephone keypad user interface.) Two weeks ago I had the opportunity to preview what is coming out this fall in cordless phones. As mentioned previously I am evaluating some relatively new wireless devices. Over the past year I have not had to pay more than 3 cents a minute for any landline long distance calls whether at home or on the road beyond any basic service fees (and since mid-May that has gone to zero for SkypeOut calls within North America).

The combined experiences have helped me establish a base line for the level of simplicity I would expect as we see the emergence of both cordless phones and wireless mobile devices that use or access Skype (and/or other VoIP-based services) while serving as a standard telephone handset:

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Organized crime organizations suppress competition in a market. This keeps margins high on vice goods and services. Higher prices means overall crime rates fall, some people just can't afford vices at higher rates. Organized crime trys to avoid "wars" with rivals because they are expensive and bad for business. Big Crime also stifles small time rivals who expand the market by bidding down monopolist pricing.

In theory, police would cooperate with mafiya to keep the streets clean of petty crimes that interfere with the mafiya's business. Total crime falls because monopolists will maximize profits in a smaller market at higher prices. General law and order benefits those holding monopolies on drugs, gambling, prostitution, and other steady businesses.

But there's a greater problem. Monopolies concentrate wealth and power. This leads to corrupt government.

So we write special laws that hurt organized crime. We add penalties for large quantities of drugs. We legalize big gambling to bring it out of the underground economy, producing tax income instead of fueling crime lords. We mandate property forfeiture and allow mobster surveillance. In short, we make it more expensive to do big crime and we level the playing field. You never do away with crime altogether, but you cut the concentrated cash flow that corrupts.

Which brings me to net neutrality.

Our Martin Geddes thinks little of laws and regulations supporting net neutrality.

I've said it many times before, but Network Neutrality is a treatment for the symptoms, not the causes - and it's an ineffective anti-consumer folk remedy at that. Good intentions aren't enough. ... Picking at one tiny part of the anti-competitive edifice isn't the way forward. Better to have power over suppliers through your wallet than via politicians.

I agree. In a perfect world.

But the markets are imperfect, power is already concentrated. We see the corrupting power of the largest lobbyists in Washington D.C. and other centers of political power. We see their astroturfing and other bad acts.

So we must act.

We must effect change.

We must out-innovate and out-market.

We must organize as consumers.

We must organize as citizens. We need to educate this generation's Judge Greens, the judge who broke up Ma Bell and made the mobile revolution possible.

We must lead our society to define unmediated access to the Internet as a human right, a civil right. And to react with anger and purpose to anyone who tries to tamper with that access.    

We must find allies, if not friends, in other industries. Companies that need their bits to go untrammeled. That need an Internet without gatekeepers. Companies that know how to lobby.

Like the mafia, yakuza, or bratva, the concentrated power of the telcos will fight back.

They won't fall to any one measure. So we need a theme that All that is necessary for the triumph of evil is that good men do nothing.
 -- Edmund Burkedrives many measures, new ones over time, each driving the monsters toward acceptable societal norms. Perhaps the theme is liberty and freedom?

I agree with Martin that fighting the telcos with laws is hard. Maybe impossible. And not without risk.

But doing nothing is not an option. The societal consequences of giving absolute control over public assembly, public speech, over our new libraries, encyclopedias and news sources, over our civic participation and education - this is tantamount to creating a new branch of government, one without oversight, without checks, balances or accountability.

Martin, we don't have dozens or hundreds of viable suppliers in the United States. We don't have efficient markets for Internet access. And we have damning evidence of the foul intentions of these monopolists to subvert civic freedoms and rights.

So, instead of waiting for Adam Smith's invisible hand to restore rights seized by phone and cable companies, what do you think should we do? 

P.S. Dr. Magaddino, my old economics professor, challenged me to consider crime, applying supply and demand theory to social evils instead of goods.

I often forget when writing for Skype Journal that terminology in the English language may have different meanings in different parts of the English speaking world. For instance, there is no boot on my Canadian car and I'm sure there is no trunk in Martin's car in Edinburgh.  I guess wireless and cordless can have different interpretations in different parts of the world.

Also sometimes I wonder if anyone is reading my blog posts (although I am learning lots of VON Fall 2006 attendees do). But I was glad to see my post where I recommended that Skype drop their WiFi phones drew at least one response questioning my recommendation.  Furthermore I recommended that Skype work with Nokia, RIM and the Windows Mobile wireless platforms to include Skype as an option for wireless phones.  But a wireless phone is not a cordless phone -- in North America at least.

Rest assured, Howard, today I have seen a solution that can meet your requirements for an easy to use phone that your parents can use with no PC and no learning curve, namely, the entire range of cordless phones being shown at VON Fall 2006, especially in the Ascalade booth. Here they are demonstrating the cordless Phillips and NetGear Skype phones announced last week plus models that will be introduced soon by US Robotics, Linksys and Creative Labs. (In the photo, L-R, are the USR, Phillips and Creative cordless phones.) The cradles hold the power adapter to charge these phones; the modules in the background are cordlessly connected to the handsets using DECT technology and include a processor with an embedded Skype client as well as an Ethernet connector for connection to a cable/DSL router and an RJ-11 connector to the PSTN line. While each vendor will be pricing these units, it appears that these base unit devices will sell for about $150 with additional handsets in the $50 to $80 range.  So not only is the base solution lower cost than the Skype WiFi phones, you can have additional phone handsets around the house or apartment as appropriate at a much lower cost than buying additional Skype WiFi phones.

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This is the second post in a series reviewing wireless devices in the emerging Personal Handheld Assistant space; the ultimate aim is to identify roles that Skype can play in this market of converged functionality devices. This is a special post in the series that was triggered by a VON Fall 2006 session. Links to other posts in this series are available at the end of this post.

Monday afternoon I attended the first Fall VON plenary session: IM: The State of Presence featuring a panel of executives and managers from the GYMAS-five representing over 90% of the IM usage worldwide. Carl Ford ran his usual vibrant Q&A format, offering each member of the panel an opportunity to provide commentary on several topics surrounding IM and where it is going. It was a very informative and stimulating discussion overall.

One major direction for IM is the extension of IM's access and reach by its incorporation into wireless devices. We heard about many of the issues that challenge the ability to provide seamless wireless IM clients, including login barriers, coverage and the relatively high cost of data services.

But the session confirmed a belief I had started to hold about a month ago during my evaluation of several wireless platforms. In particular, my evaluation of one Skype WiFi phone demonstrated to me the futility of providing such a device:

• The battery life was about eight to twelve hours in standby mode
• It could not handle DTMF tones
• The basic clock would arbitrarily drop a couple of hours
• It provides the presence functionality of Skype's IM client but no text chat capability
• Skype was the only application that runs on the device
• While the Skype client provides Skype names and the Contacts' other phone numbers (if available via the Contact's registration), there is no address, email or other information such as provided by synchronization with Outlook.
• They would only work in open access WiFi zones; they would not work in WiFi hotspots requiring a browser-based logon.
• They were purely engineering toys that demonstrated one could make the concept work but they badly needed an experienced wireless phone product manager to get the feature set right.
• In a market of multi-function devices in a similar price range, a Skype-dedicated device could not be price justified.

I came away with the feeling that, while they perform more or less as advertised, Skype WiFi phones are nothing more than a prototype engineering demonstration of Skype on a wireless platform.  Certainly they would have a very limited market -- maybe in enterprises that wanted to provide "walled garden" communications amongst geographically disbursed nomadic employees. But they certainly are not a wireless phone that will gain broad consumer acceptance and market share of any significance.

Combining this experience with my experience with Nokia N-series phones, the Blackberry and Skype for Mobile on the Dell Axim I have to recommend that Skype drop the concept of a dedicated Skype WiFi phone and focus their efforts on getting Skype incorporated into those other wireless platforms. (It is for this reason that I did not bother to mention which brand of Skype WiFi phone I evaluated; it's the entire product concept that is a problem.)

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This is the first post in a series reviewing wireless devices in the emerging Personal Handheld Assistant space; the ultimate aim is to identify roles that Skype can play in this market of converged functionality devices. Links to other posts in this series are available at the end of this post.

Over the past couple of months I have received several wireless handheld phones/devices from Nokia (manufacturer of the last three cell phones I have owned), Research in Motion and SMC for evaluation. In addition I have been using a WiFi-enabled Dell Axim X50v as a PDA over the past two years and a Canon PowerShot A610 for photography; the Axim, of course, can run Skype Mobile, . Recently Sony announced its WiFi-enabled mylo; meanwhile last week saw the arrival of the Blackberry Pearl 8100.With such a variety of feature sets and user experiences, one needs to take a pause to review what is fundamentally important in a wireless handheld device to provide a basis for reviewing these devices, particularly in view of the convergence emerging in the various Nokia, Windows Mobile and (RIM) Blackberry devices.

This avalanche of handheld devices has made me ask the questions:

• How much convergence of functionality do I want or need on a handheld device?
• Where should Skype play a role in wireless-enabled handheld devices?
• Can my previous three devices (phone, PDA, camera) be combined into one unit or do I continue to need three device holsters on my belt?

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Skype did a great job packaging Skype into the new Mylo. And I'm desparate for a device like this that lets me carry Skype around. But Sony's Mylo doesn't deserve this moment of love. Like the T-Mobile Sidekick, Mylo:

• is a closed device and platform when we need open platforms;
• only has Wi-Fi when we need the ubiquity of wireless edge networks; and
• lacks authoring tools when everyone creates, mashes up, and publishes photos, sound, and video.

Definitely not for the MySpace generation, despite the great job at embedding Skype, Yahoo! and Google IM clients.

Save Mylo, Sony.

1. Add a good still and video camera. We're sharing our work and our lives. I want this to replace my mobile camera phone, but you are betting it won't, at least for now. Please try! 
2. Add audio, video and photo recording software. Surely Adobe is ready to come out with pocket versions of ImageReady, Audition and Premiere.
3. Add authoring (or at least uploading) tools for blogs, vlogs and podcasts. A browser can only do so much, even with Web 2.0 goodies.
4. Publish developer tools and seed an open ecosystem. I want to code rich clients (feedreader, please) to run on Mylo, especially apps that work offline.
5. Open the device to third-party apps, without prior Sony approval. So I can buy Mylo editions of Quicken, Flight Simulator, QQ, and embedded Firefox (with extensions). It's much easier to be closed, but a Sony bizdev tax is a barrier to user adoption.
6. Add AIM. Still being used by millions, even adults.
7. Let me use Skype without a plug-in earbud (built in noise-cancelling microphone). Just one thing to carry, please.
8. Support the U3 flashdrive standard for better desktop integration.
9. Bundle more memory. 1 GB is too small to do the job needed, and an insult at this price point.
10. Support IMAP and POP3 email servers. How can Sony segment work from life when work and life are blended for most people?
11. Talk through GSM and EDGE data networks. Wi-Fi-only is premature in most places for most people.
12. Add bluetooth. The better to play with desktops, cameras, and mobile phone.
13. Lose the big orange and blue lights (or at least make them optional). Nobody around me needs to know when I'm using Mylo or I'm online.
14. Add batteries. So you can do all that and sustain the long battery life you offer now.

Mylo represents a great stab in the right direction. Product managers trade off time, features, cost, quality, risk and prices. Here's hoping Mylo continues to evolve and expand into a development platform to rival the Playstation, Windows Mobile, the Palm OS, and Symbian.

P.S. Good luck to the musician Mylo, who's had no Google juice competition until now.

Last week Microsoft cranked up the hype machine and had lots of people wondering if their announcement today would be something approaching earth shaking.  In the end it turned out to be about the consolidation of several communications related servers, such as Exchange and Live Communications Server, onto on Office Communications Server, available in Q2 2007. It was announced today so that IT and communications managers can start to plan architectures, hardware requirements and budgets for its implementation shortly after availability. Fundamentally it is a server product with clients that could potentially replace PBX's. But at what cost in revamping resources, redefining business processes and defocusing an enterprise's primary business strategy.

Two good posts I have come across:

Alec Saunders has an indepth perspective as both a former Microsoft product manager and a potential competitor to iotum's Relevance Engine. But, as Alec says:

When the announcement came, it was a damp squib. Microsoft will rename Exchange as Communications Server, and add telephony features to Communicator, and other products. It's an integration announcement, as opposed to a dramatic new direction -- a reprise of the 1993 announcement that created Microsoft Office out of Word, Powerpoint, and Excel. Interestingly, this tactic may backfire for them this time around. Today there's much more focus on open standards. The idea that you must buy all of your infrastructure from a single vendor just isn't palatable for many companies today. Certainly, that is the view expressed by TMC's Tom Keating in his coverage of today's announcements.

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A Skype Journal Exclusive. It is a great book, a great read. It belongs beside your computer, (Windows, Mac OS X or Linux) not on a book shelf. "Skype: The Definitive Guide." The book is rightfully portrayed as the only official guide to Skype, every chapter reviewed and approved by Skype staffers. Written by Skype insiders Harry Max and Taylor Ray (more on them later this week) with a foreword by Skype co-founder and CEO Niklas Zennström.

The whole book feels good. It has balance. Skype stories, user stories, interweaved with useful but hard technical facts. Even QUE Publishing and Amazon got it right. They understand the Skype user is not going to pay big bucks for a book. The price of $12.99 (US) means just about everyone can afford it.

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by Steve Smith, Lavalife Chief Scientist

I'm a huge user of Skype, as my friends and colleagues know. I've helped shift the management of several companies over to Skype as a productivity tool. One of the main reasons I use to promote Skype is the value of the seamless pyramid of communication: presence ⇒ IM ⇒ Voice. However, some factors are interfering with this value, and I think there's a paradox in the direction Skype is taking.

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At the end of the second day of trading Vonage (VG) closed at $13.00 with over 11.3 million shares traded today; down 24.6% from the IPO price. There is some interesting and inisghtul commentary coming out:

Andy Abramson, VoIP Watch: My Thoughts on The Vonage IPO

So really, this reaction to the stock price is not a reflection of how VoIP will do, for VoIP, especially with new and different services coming on line every day that can only be delivered by IP will do very well in the hands of companies with real leadership and vision, not just a sales model that costs more to acquire the customer than will ever pay back.

No, this reaction is a show of no-confidence by Wall Street in the company, their leadership and their approach to business. Nothing more. Nothing less.

Jon Arnold was interviewed by ROBTV (a Canadian business channel); this link will work until May 31.  Jon points out that, whereas the legacy telco and cable competitors at least have a customer base to whom they can market a VoIP service, Vonage needs to recruit a customer base ... thus, the high marketing costs. Well worth a listen for an overview of Vonage and its positioning.

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I'm looking forward to blogging the Conversations that develop from the sessions at mesh 2006 tomorrow and Tuesday. With featured Conversation Mentors such as Om Malik, Michael Geist, Steve Rubel and Paul Kedrosky there should evovle some interesing perspectives on how the a Web 2.0 world will evolve.

Mark is getting excited in preparing over the weekend, he says:

I couldn't help but think that we are a long way from a cold winter night a few months ago at the Paddock Tavern when someone raised the idea of putting on a conference. Little did we know what we were getting ourselves into! I'm looking forward to meshing as much as possible so if you see me wondering around, please introduce yourself.

As a media sponsor, Skype Journal will be reporting back daily with a particular focus on how Web 2.0/Voice 2.0 can be integrated into, impact and influence a public beyond the geeksphere.

Lots of developments in preparation for the Toronto mesh Conference:

Mark Evans reports on the selections for 15 Minutes of Fame. They're "giving three people a day 5 minutes each on stage to talk about their ideas, their companies or themselves."

Mark also reports on how they have organized this conference with no budget largely using web-based communications via the blogosphere. (I think he meant to say they have been able to "sell a whole bunch of tickets".)

Matthew Ingram expands on how Web 2.0 is rewriting the rules for the marketing business and how, with appropriate credits to Seth Godin, their success has turned out to be the result of using the web to "create a relationship, a dialogue -- a conversation".

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The Skypecast service, announced today, is a fun and useful app. A quick and dirty internal project, about a month old, it lets you log in to a Skype site and create a public voice auditorium for up to 100 people. If you catch this in time, we'll be hosting Skype Journal forum - Today's Skype Announcements - Good, Bad, Great, or Useless? today at midnight Eastern, 9:00pm Pacific, GMT

I love it and will be using it.

But Skype didn't give the people in its third-party Skype developer programme or their online partner programme the tools to build it themselves. Skype staff built the plumbing, then built the app, but kept the plumbing closed to the public.

Skype must carefully and quickly build out their application infrastructure. Their focus must be on seducing entrepreneurial engineers, enterprise IT technologists, and phreaks around the world to a rapidly evolving and increasingly capable Skype platform.

Investors must care. In the coming battles for control over technical standards, over market share, and over conversational commerce, Skype will need friends. In particular, Skype will need a strong, confident, committed ecology of businesses building on Skype as a platform. Skype's bizdev seems up to the task, but Skype's API remains an afterthought.

Who is the product champion at Skype for the API? Which senior executive is driving the client and service APIs forward? Who is committing developer headcount to architecting and constructing server APIs and server agents?

Skype's independent developers want to know. Now. Some certified partners have told me they are limiting their investment in the Skype platform for just this reason, Microsoft, Yahoo!, AOL and other platforms to be the beneficiaries.

There are many bases for competitive success. This one is key.

Apple's "digital living room" follows the money of passive media consumption (iPods and iTunes) instead of Apple's traditional role of enabling expression through content creation. We spend more time reading than writing, listening to radio than podcasting, watching TV than shooting and producing video. So Apple's just following human behavior, and the money.

I'm disappointed, though. I've always prized the culture of the Mac for emphasizing creativity, artistry, action and collaboration, at work, school, public service and the arts. That spirit attracted me to blogging in 1998 and to Skype in 2003. Giving people tools to express themselves and to connect with one another ennobles us all. It decentralizes power and makes our world civilization less fragile.

As Apple conditions the channel surfing reflexes of iPodders, are we losing something?

Here's three Skype products that aim to enhance your Skypeing experience that leaves me questioning exactly what I'm buying with Skype Certified. The three products are the VoSky Chatterbox, Jawbone Headset and the Motorola Wireless Interenet Calling Kit. Each provide a different angle on bettering the standard Skyper's headset and as you might expect each has their pro's and con's.

VoSky Chatterbox.

This simple USB device provides an easily portable plug and play speakerphone for Skype. It's simple to use and requires no additional software to be loaded. It has a volume and mute button on top and works probably as expected, as a low cost speakerphone. I'd liken it to the solution we had as kids when we could finally plug in a speakerphone box between the old phone and the whole family sat around. In principle great, in practice it left something to be desired. The Chatterbox is a little like this. It works. It's also no substitute for a decent headset. The caller on the other end of the line will know and possibly complain. Handsfree solutions curently work better with a good set of speakers and a proper stand mic. Locate them correctly and the caller won't get a any feedback. Many laptops work as good as the Chatterbox. If you feel the need try it. Just don't expect it to be a Polycom and ready for the office. For kids it may be more robust than a headset - read youngsters talking to Grandma.

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Deal done. Retail VOIP in the offing? Views later.

eBay has agreed to acquire Luxembourg-based Skype Technologies SA, the global Internet communications company, for approximately $2.6 billion in up-front cash and eBay stock, plus potential performance-based consideration.

Skype generated approximately $7 million in revenues in 2004, and the company anticipates that it will generate an estimated $60 million in revenues in 2005 and more than $200 million in 2006. For Q4-05, eBay expects the acquisition to be dilutive to pro forma and GAAP earnings per share by $0.01 and $0.04 respectively. For the full year 2006, eBay expects the transaction to be dilutive to pro forma and GAAP earnings per share by $0.04 and $0.12 respectively, with breakeven on a pro forma basis expected in the fourth quarter of 2006. On a long-term basis, eBay expects Skype operating margins could be in the range of 20% to 25%.

The acquisition is subject to various closing conditions and is expected to close in the fourth quarter of 2005.

Full text of news release...

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Stuart Henshall, Skype Journal's publisher, posted his Grade "D-minus" for Skype's developer ecosystem. I think it's too harsh. Slightly. I give their developer program to date a "C".

Two reasons: My metrics biases are a hair kinder. And I cut Skype a lot of slack for their small size and tender years.

"Doctor, the labs are in."

Generally, you model what you want the system to do. You diagram the states and flows. Then you seek out metrics that sense general system health, that help diagnose problems and prescribe solutions.

In this case, you want a large and vital business ecosystem. It's many outside developer subcommunities, several subcultures within Skype, and the processes you design and deploy to keep virtuous cycles going.

Some of my favorite measures...

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by Jan Geirnaert, an IT/Internet Business Consultant in Malaysia.

I have worked here in Kuala Lumpur, Malaysia, as the IT manager and network administrator for a small non-IT business. One of the many things I did is cutting the cost of the phone bill by implementing Skype as a VoIP solution. These thoughts are not purely IT/technical. My wage was paid by the cost-savings on the telecom-bill.

Here are some issues to be taken into account before implementing Skype. What you read below is how I did it, these are my personal experiences. The standard setup-recommendations can be found on the Skype web site.

Make your case gently and with numbers

Explain properly to all involved management levels and teams (especially Finance and higher management-levels) what the solutions consist off. Don’t go too much into IT-technical issues. Focus on the advantages and the low cost (only your time and skill are important here). Take into account that VoIP (Skype included) is something new and a low-level entry is better than no entry at all. If you make things sound complicated, it just won’t work.

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Skype has an online survey up. It's all about habits and practices - but there seems to have been little thinking on and stretch in terms of options, scales, wants and wishlists. It's not well designed, poorly structured, with many gaps in areas covered, and no real behavioural information being collected. A wasted opportunity!

Just because online surveys are simple doesn't mean they shouldn't be well thought out. It's also more dangerous to have information that is incomplete or poorly collected than to have no information at all. Unfortunately many organisations fall into this trap. There is down and dirty research -- this is not it.

Breaking down the survey to understand the gaps further, there are problems in several areas :

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Video4Skype is clearly a hot item. Slashdot picked up the story today. According to a spontania representative: “we had 3000 downloads just in 24hrs and our server got colapsed. Right now it is up and running so you can proceed to download it.” In my experience that makes it the hottest Skype add-on ever.

The product also received coverage on the PRZoom Newswire.

Nicolas asked me to remove his Skype User ID form the pic in my previous post because he was getting too many requests for authorizations. (Girls… he is happily married.)

I have tested with about a dozen users now. So just how good is it?

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Their statement: Restrictions on running Skype P2P software at CERN. Because Skype clients help each other find others on the net (acting as supernodes), basically behaving too much like KaZaA. via physics professor Jacques Distler's thoughtful blog post.

The stated reason seems a little shaky to me. Aside from the unsavoury nature of its cousins, the P2P filesharing programs, I don’t see why skype supernodes would pose an undue burden on the CERN network. It seems to be more of an “It’s the principle of the thing!” issue, than an actual concern about bandwidth or network performance.

This is another update on SkypeVM, voice messaging in my language and voice mail in theirs. In my initial post I figured that VM could be one of Skype most profitable early money raisers. Currently it's not performing to my adoption expectations and that traces to their execution. Let me illustrate with a story.

I spent time reconnecting today with a colleague who has a friend who doesn't like interruptions. It's the type of job they do. They don't like chat messages that popup they don't like incessant ringing of their cellphone which they just turn off. For my colleague it puts her off ringing them.

How'd this all come up and and does it predict Skype strategy? Well I was sharing an aspect of Pamela-Systems' soon-to-be-released Pro version. I was experimenting with personal answer messages and sharing that I could customize one for each one of my friends. Now she jumped at it for this guy. She said.. you mean I can leave and update messages for him when he calls.. so even if I am not here he gets them. The answer is yes!

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Mixed messages? Two clips from the same day from Skype's website. Are recent E911 rulings scaring Skype? I find real mixed messages here for consumers too. As a Skyper, Skype has replaced the telephone for me. So it is a "replacement." Yet it isn't apparently a "replacement" service.

If VoIP providers want to win / and work with users to get the "right" regulation in play then better language is required. Users don't care about quibbles. Portray it as a "nomadic service", define it as a "socialnet", or augmented communications. It is both very much more and very much less. It is certainly different. Users know this.

What feedback is Skype getting from country regulators? How are the current experiments in the US, UK, Denmark, Poland, Finland, Sweden, France, and Hong Kong going? (Note Norway is no longer available.)How many numbers have now been issued?

While I'm happy with the service having spent another 55 Euro today on Skype for an English number and more minutes others may want to read the terms and conditions There are not a lot of guarantees there. We understand the emergency dialing, and then most phone companies would refuse to guarantee your number too.

The New York Times Op-Ed Columnist THOMAS L. FRIEDMAN, and author of "The World Is Flat, A Brief History of the Twenty-First Century," (a very good read, by the way) tells a great story in his column today "Where Have You Gone, Joe DiMaggio? as he continues his rant on America's failure to meet foreign competition.

"I helped teach a course at Harvard last semester on globalization, and one day a student told me this story: He was part of a student-run collaboration between students in the U.S. and China. The American and Chinese students had recently started working together by using Skype, ... But what was most interesting, the student told me, was that it was the Chinese students who introduced their U.S. counterparts to Skype. And, he noted, these Chinese students were not from major cities, like Beijing, but from smaller towns."

I am sure it is not only telcos who will feel the disruptive affects of change... of Skype.

That's my thought for the day from Long Island, New York where Stuart, Phil and I are meeting to discuss our Skype strategy. "What's your Skype Strategy?" Have you given it any thought lately?

Andrew Ferguson is a disturbed young man. Brilliant, but disturbed. Funny and innovative. But disturbed.

You know the email spam you get that says, please call this bloke in Africa to send him money to (fill in the appeal here) in the wake of (insert natural or national disaster)? Well Andrew decided to call. Using SkypeOut. Interminably. At odd hours. Tying up the con-man's phone line.

Aside from the dark pleasure of petty revenge, what's going on here?

Skype's design favors offensive tactics

First, there's an imbalance in our cost of calling. As a Westerner, he can afford 10 Euros for 10 hours of calls. If he buys more, the rate falls even further. As a percent of disposable income, this is small potatoes to Andrew.

Second, there's an asymmetry in the opportunity cost of tying up the spammer's phone line. Others aren't getting through to the spammer, so every hour the line is tied up is a sucker missed and money foregone.

Third, Skype calls can be automated. So you can program a thorough barrage of short calls scattered throughout the day. And night. This optimizes your use of your SkypeOut minutes since there is not per-call charge, just a charge for the time. It also exploits the spammer's need to answer each time the phone rings or never talk to another sucker. So every call both increases the effort needed to capture a sucker, since for each sucker there are dozens or hundreds or thousands of fake calls. With little effort (one programmer coded this in 20 minutes) you can make it pointless for a spammer to keep a given number.

Take this a step further: decentralize. Create a spam filter that looks for, say, new Nigerian phone numbers in your email spam bin. Automatically grab them, and post to a listserve, sharing targets. Then have your Skype run the attacks against multiple targets, randomly selected by you and others. This decentralizes the work, aggregates your SkypeOut minutes, buying power, and exposure (if someone tries to find out who you are) among many Skypers. Putting the Power of Many to use.

This is a hoot.

Until the number being attacked is a fire department, or a hospital, or your home. Or air traffic control, or a credit card processing center. Or your mobile phone, where you have to pay high rates for every call, even one lasting just a few seconds.

What can you do about a telephonic denial of service attack?

Other than changing your number?

Maybe we can adapt defenses against flooding attacks in other media, like email and DNS. Maybe not; much of the information used on the Internet isn't available with POTS.

Can you detect an attack building up?

How about a distributed DOS attack?

Who would you call for help?

After the fact, which laws would apply? When would Skype cooperate with law enforcement or civil litigators to provide SkypeOut logs connecting calls to SkypeOut user accounts? Would Skype provide billing data?

And could we blame it on Andrew? Or his Doctor from Nigeria?

Gordon Cook has been writing the Cook Report since 1992 as a bi-monthly industry service. For the past few weeks I've had the pleasure of his retelling of a deeply passionate discussion over the direction of VoIP, SIP and Skype. His May June report is now available. Telephone Become Software and the Phone a Computer: Skype Examined as Virally Spreading Second Generation of VoIP While SIP and World of Enterprise VoIP Live in Very Different Universe" If you do nothing other than read his introduction you will feel and hear the retelling of a dialogue and conversation amongst some of the great thinkers in the space. In the report you will learn of David Reed and Gordon's Stories about Nepal and much much more. What's interesting about Gordon's journey is that in a few short months this telecom and IP insider has had his whole rocked. Read his summary if nothing else.

I am concluding that the profound story here in “VoIP land” is not Vonage and Cisco's "stuff," or SIP, or IP PBXs etc - this "stuff", one way or another is tied to hardware and not surprisingly to the phone system and its related hardware. What I am increasing certain of is that Skype represents a second generation of VoIP that will have a far more profound impact than the first generation.

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Why does the SkypeAPI provide the potential solution that Yahoo 360 and others are unable to match. I've been in Yahoo 360. (Learn more about Yahoo 360 here here and here). I even approved one buddy, so I've not made it a big test case. I remain convinced that the social networks are broken until they act and operate in real time. While surveying some of my friends 360 profiles, Judith Meskill and Stowe Boyd trying to work out if Yahoo's presence indicator does more than online or offline, I came across Stowe's blog post there.

So, why did they do such a bad job integrating with Messenger? I really want a real-time social network, with blogging, photo sharing (a la Hello), music sharing (a la last.fm), and instant messaging. They have all the pieces. But what they need is to map my friends into the messenger buddy list. Everything should work in the obvious way, but when I click on a Messenger online icon it just brings up Messenger, not an IM session with the friend I just clicked on. And the 360 friend might not be on my buddylist, although they are an approved 360 friend. Ugh. Yahoo 360? - Ambivalence

Stowe welcome to an ass-backward world. Rather than enabling you to create a dynamic social network Yahoo 360 has created a static network from the top down which fails the real-time tests. That's the problem when the solution is a complex set of connections centrally controlled. It was ok as long as all the networks continued to operate in an asynchronous world. By contrast creating a world of networking that bubbles up from the participants, is dynamic and always changing. For me to share my dynamic network with you in real time I must be able to share the status of my buddies. When sharing their status along with mine I also need to adapt to any rules for sharing they may have with me.

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These are my VON notes from one of the bluntest session on the death of traditional telephony. Ok it's not my message it could have been. Stuart Alsop is a VC with New Enterprise Associates, and (interesting to me) has "money" in Vonage. I didn't feel the audience squirming in their seats, or really know it the message was ignored. These were some pithy little quotes:

"talking about tranforming the telephone" "change telephones and you change everyone and everything" "VoIP could be the biggest change yet. death to the PUC, FCC, 911, universal access etc. VoIP leads to the complete deconstruction ot the telecoms industry"

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It's not clear yet what this announcement on Cidav means. There are some similarities to MrBlog's most recent post on owning your own phone system.

So take a standard Linksys router and toss this free code on it, and you have yourself your own SIP proxy server. No more NAT problem (the router has a real IP address and and can properly map to all SIP phones on the NAT LAN). It's open (not locked to a provider). This allows one to simultaneously use whatever services and PSTN termination provider one likes, in any mix and match fashion you like. Mr Blog Entry - 02/22/2005: It's here, the user owned phone system

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Fiction author makes up new stories on Skype. Pehaps he enjoys it Skype so much that a tall tale was required. Lots of misinformation.

I'm sure by now you have discovered the new online messenger and chat format called Skype. Like all new services, it soon develops a nature of its own. Michael Jackson's Profile On Skype

Who wants to share a line? I couldn't find Om's motivation to download and install Bellster and so far have quite happily managed to live without it. Still I'im usually one of the first to test these things. Even force them on my buddies. Not this time. So I've not tested it. After reading Andy and Aswath I'd still want to attempt a simple point. In a world of VoIP and Mobility (Cellular) who needs a line? And why would you want to set up a business to start sharing them cooperatively? It's hardly going to help the third world and locally in the US there really isn't the incentive.

So it would be great if it makes broadband more pervasive. There's certainly not a good argument for using Bellster to call foreign cellphones, many times they are very expensive to call in the home countries and thus hardly a local call. Finally, nothing, absolutely nothing promises me a better audio / sound experience. Telephony is supposed to be getting simpler, faster, easier to use and doing more things. Bellster just didn't smell to me like it was going to. Take a look at the setup guide.

Are you thinking outside the box. Yet another article suggesting that telecoms are underestimating the threat of VoIP and new entrants like Skype. It's notes like this that tempt me to blog "If I was a major Telecom CEO today.... ". One of the interesting elements is that many telecoms have worked with scenarios that include rapid VoiP adoption. Yet it's clear that the delivery has never got them at the visceral and gut level. That's a shame and poor execution. For the result is no immersion in "what could be" and thus they aren't creating new options for their stakeholders.

AMSTERDAM (Reuters) - Making cheap telephone calls over the Internet could be much more popular among consumers than previously estimated, leaving incumbent telecom service providers highly vulnerable, a survey revealed on Thursday.

Over 50 million western European consumers with a broadband Internet connection at home may use telephony software and special phones by 2008, British research group Analysys found.

"The impact on traditional telephony providers' revenues could reach 6.4 billion euros in 2008, representing 13 percent of the residential fixed-line voice market," said analyst Stephen Sale, adding this was a worst case scenario drawn up for operators who want to know how badly Yahoo News