There are great lessons to be learned from a quick study of "Hyping Skype". Over two years, Skype went from releasing a beta product to a successful billion dollar sale. I've put together two quick charts on a rough timeline to share Skype PR releases and some of the lessons learned and gathered along the way. It's a much bigger story than just a couple of PPT's.

I've lived through these lessons and been part of them in many ways. I blogged Skype from the beginning. Over the next few days I plan on sharing a few of the lessons. In the end, the Skype community has been pivotal in determining Skype's direction and creating a momentum far beyond it's size. We are at a very clear inflection point for Skype. Will the momentum continue? Will the elements that made them so successful in Year One and Year Two translate effectively to an eBay managed world?

Year One.

Year Two.

Reality is hard enough to make out without distortion. So facts, data from facts, and testable logic make me happy. Ecademy's Julian Bond fact-checks and rebuts Kevin Tolly's Computerworld opinion column. Tolly called Skype "hazardous" to network health, a poor corporate citizen, and a bandwidth stealing freeloader. Bond says the article is "full of half truths and downright lies."

Your corporate desktops and notebooks are the peers that are consigned as Skype pleases to relay traffic and function as mini-servers in the Skype universe.

If your PC is directly connected to the net with no intervening firewall then there is a possibility of it becoming a supernode. That eliminates every corporate PC. Have you ever seen a corporate network with no firewall?

According to Skype — and validated by our research — a VoIP call will consume between 24 and 128kbit/s. When a Skype station is functioning as a relay the bandwidth is doubled.

If your PC becomes a supernode, you will relay switching traffic and not voice traffic to an expected maximum of 5kbps, according to Skype staff on the Skype forums. Go ahead and do the tests to prove them wrong.

One of the very cool things Skype has done is to publish a few near-real-time statistics to their web site. The statistics rss feed includes "Total Skype Downloads" (177,001,209), "Users Online Now" (3,780,794), and "Total Minutes Served" (14,310,738,687). By looking at the changes in these numbers you can understand more about the size, state, and trends of the skypopsphere's collective behavior.

Reull Consulting, a German consulting firm, sells weekly charts of this data. Here's a thumbnail from their Skype VoIP Statistics Week 39 2005 report, (US$199). It shows Minutes Served (top line) and Users Online (bottom line) from 26 September through 3 October, at 30 minute intervals. Minutes served in a half-hour peaked near 2 million, users online near 4 million.

Skypeteer offers a free flash widget. It shows the number of Skype users online. You can add it to your blog.

Skype Journal has its own number story. In the last seven months we've grown to 71 thousand unique visitors per month, each of whom come about every 8 days, reading 3.3 pages each visit. These are our conservative numbers, after removing search engine and spam activity.

How would you like the freedom to buy In-And-Out services for your Skype client from another company? I think you’ll have that option. It will be good for Skype. And for you.

Let’s start with what you’re paying for when you buy SkypeIn or SkypeOut.

SkypeIn and SkypeOut bring Skype nearly $60 million a year.

These are “call termination” services that let callers talk between the Skype network and non-Skype numbers. SkypeIn gives you a phone number anyone can call, your Skype softphones ring, and you and your caller can talk. Two examples. I have SkypeIn numbers in London, Manhattan, and San Francisco, numbers that connect to my Skype phone. The Katrina.info hotline bought a SkypeIn number in the middle of a disaster zone to accept local phone calls from New Orleans. You rent the number from Skype by the month or year. SkypeOut lets you call a traditional phone number from your Skype software. You pay Skype by the minute, about one euro per hour in most places.

Skype retails the InOut Services

To a Skype user, Skype builds and operates all of this. But they don’t. Skype retails these services, buying them from termination service providers. They provide the logical and physical interconnection to traditional phone networks in various countries. Skype’s partners include Level 3, iBasis, and Teleglobe. Skype sets up billing, buys blocks of phone numbers to be used for SkypeIn, meters use of these services, and sells them to Skype users. When you pay for SkypeIn and SkypeOut, some of the money goes to those partners and Skype keeps the rest. Think of the partners as InOut wholesalers.

Skype locks in customers through bundling.

Skype users can only use SkypeIn or SkypeOut. They can’t use other termination services.

[ Food analogy 1: In-N-Out Burgers. Famous West Coast drive-through hamburger chain. High quality, limited menu, only available at their restaurants. If you want their special sauce, you have to buy their burger in their store. And you can’t bring your own sauce. ]

Lots of companies do this. In the United States, service is locked to mobile phones.

This will change. Customers will have choices. And you will be able to thank Microsoft.

Microsoft must unbundle termination services from Windows

Microsoft will include a VoIP platform and client in Vista, their next version of Windows. Vista rolls out in 2006 and 2007 and hundreds of millions of people will wake up with at least one softphone on their computer.

Seems like happy days for Microsoft, right? Not so fast. If you thought Microsoft was in trouble for not having competitor browsers on their desktop, what do you think will happen when it comes to telephony? Can Microsoft put together a termination service deal that everyone, in all countries will find acceptable? Without massive litigation and regulatory involvement? Not likely.

So Microsoft will pass the choice to customers. They will unbundle the softphone from termination services.

Unbundling creates a new type of business: the InOut Retailer

People will experience this like unbundling your local phone service from your long distance carrier. You get to choose your in+out provider, probably in your softphone preferences or a control panel.

How will this work? Retailers will combine termination services and offer them up in a simple package. And you’ll choose among the packages. Skype could offer SkypeIn and SkypeOut services to non-Skype users, for example. Or you may prefer to get your In service from someone else.

[ Food analogy 2: You manufacture frozen pizza. Eight topping varieties. Then Microsoft comes out with bake-it-yourself pizza dough (a la Boboli). that lets you choose exactly the combinations and proportions of sauces and toppings. An abundance of personal choice and control. ]

Competition and shopping for InOut create opportunity.

So Microsoft unbundles, and Windows users around the world pick from a short list of early InOut services. We may even have a Windows wizard or a web catalog to help shoppers. Each InOut product will include geographies covered, voice networks covered (Skype, Yahoo!, et al), rates and tariffs, and links to account and billing pages. And branding, don’t forget the branding.

This data will be published via xml, RSS syndication style. This will make it very easy to keep millions of subscribers around the world updated. Side effects include very efficient competitive information, useful for those who compete strictly on price. It will also create options for those smart enough to game these markets the way airlines game ticket sales.

Service providers will compete on how well they serve specific markets. One gives great rates to the Philippines. Another provides customer service in Hindi. Enterprises will be able to map InOut service to their customer segments. Some services will be flat rate, others prepay, and yet others a hybrid.

Just as the syndicated product data informs the sell-side of the market, it may make it easier for customers to shop. Depending on the products, it may be as simple as buying a prepaid calling card or as complex as tiered long-distance plans. Expect third-party reviewers to compare services to help your choice.

Will there be switching costs? Aside from the customer attention burden, the biggest built-in switching costs will come from identity and credit verification.

What this means for Skype

Skype, and others like Skype, will respond to the new system. They will play in four ways.

As an InOut service provider. Skype will continue to offer simple, vanilla, global services. As they learn more about their user segments, they will create products optimized for types of use and markets. Perhaps spun off as a sister company, Skype could offer InOut services to people who use competing softphones.

As a softphone network operator. Skype will become a channel for other InOut providers. They will compete against Yahoo!, MSN, AOL, Google, QQ, telcos and others by:

• making it ridiculously easy to buy the right InOut service,
• adding trust to the InOut relationship by screening, rating, and certifying InOut services,
• easily managing my service (Am I really getting what I should out of it? Is the quality high?), and
• easily participating in referral sales through my social network.

As a complementor. Skype is in a great position to lower the costs for InOut retailers. They need back office systems for billing, profile management, credit checking and profiling, usage analysis, and selling to users. Those systems are expensive, a barrier to entry. By polishing up their own back office software, Skype can offer these services to InOut retailers for a fee or a piece of the action.

Non-PSTN Peering. Skype may offer InOut services that peer with selected IM and softphone makers. There’s no technical reason that lowest common denominator chat and telephony shouldn’t work across vendors.

Net: new sources of revenue and new brand touch points.

Skype is adept at hiding the plumbing so users focus on what works. That's their brand, to date. Those skills and brands should do well for them in this new space.

The web 2.0 meme map, from a foo camp presentation by Bill O'Reilly.

Skype's Choice by Gordon Cook for Strategy+Business magazine. Published pre-eBay deal, Cook explores the tension between users of this wild software network and enterprise IT managers who want control; but who are unlikely to get it.

Andy Abramson blogs tidbits from his talk with Skype's new CMO, Saul Klein. A summer survey of IM users, comparing what they say about their behavior by IM brand. Skypers are more likely to use voice, to use it at work, to talk internationally, and to use phone-like features, like call forwarding. Russell Shaw interviews Klein too; good questions.

Three thoughts:

1. Polls don't replace ethnographic research or instrumented clients that show what people do (not what they say they do.
2. Summer may be the worst time to survey IM users; so many are out of school and out of touch with their school-year social networks.
3. This survey focuses on IM competitors vs. the people who don't use softphones: mobile and landline phone users - the unserved market you most want to convert.

I couldn't resist going to the session on IMS, the telecom industry's purported salvation.

As might be expected, I've expressed some strong opinions on IMS previously. I'm always open to learn more and refine those opinions. Yesterday there was a good, educative session once you stripped away the slideware.

For those unfamiliar with IMS, the basic story is this: The old phone network has a media component that reaches your phone's microphone and speaker, and a signalling part that you can't touch (and they screw you hard when you need it to do something for you). The Internet is an IP network that just shifts bits around and doesn't differentiate signal and media; you are in complete control. IMS is an IP network technology that re-introduces a "control plane" for signal and "user plane" for media. Bandwidth and sessions are centrally controlled and managed.

The panel was nicely constructed with analyst (IDC), vendor (Lucent, Intel) and operator (Sprint x2) views.

There's still a lot of strangeness out there. Push-to-talk was given as a great example of an IMS application. But PTT isn't quite real-time; there's no QoS requirement that IMS will fix. If the radio link can't hack it, re-arranging the packets inside an IMS box won't make any difference.

IDC declared: "Equipment providers need to make equipment truly interoperable for IMS to be a success". You can view this statement in one of two ways. One view says that carriers will demand a choice of vendors and low levels of lock-in. More nuanced is the possibility that services will need to inter-operate across multiple carriers. Could the mobile operators define a universal Voice2.0 application and foist it on everyone via control of distribution channels, just as with MMS? Sounds unlikely. Like SMS, Voice1.0 is a minimalist application that is good enough for a massive swathe of users. Richer apps are likely to have narrower, more targeted user bases.

IMS is a double-edged sword to carriers. On the one hand, they get a chance to compete against 3rd party applications that are eroding their revenue base. This competition doesn't need to be ‘fair'. For example, they might only offer the connectivity fast enough for TV and videoconferencing as part of an IMS bundle, not as an Internet service. That raises the barrier to entry because it'll be painful and expensive to build and deploy IMS apps compared to pure Internet ones. This will all feel quite reassuring to telcos, no doubt.

But the curse is that your supposedly differentiating application is now limited in scope to your connectivity customer base. If you have an application that has any form of network effect, you've got a problem. The Internet giants will have ten or a hundred times as many users as you. And increasingly as social networking features get integrated into IP communications, your network operator island looks rather cramped.

I'm seeing the promises of IMS as being great for feature deployment as being hollow. IMS is a Voice1.0 proposition — cheaper, but not better. A juicy qute from the floor:

What can I do with Fortran that I can't do with Assember? Nothing. But we can write programs easier and quicker in Fortran. But the major beneficiary of IMS is the carrier, not the user.

Sprint was honest in saying IMS was enterprise-driven, a means of verticals like healthcare creating secure networks. You won't see the Fortune 100 leading innovation in personal communications. And they won't be held hostage to paying usurious application tolls by carriers. They're used to buying dumb pipes, and IMS will be held to its promise of separating service and connectivity. Just a new form of mentally deficient pipe, rather than dumb pipe.

Even then, I suspect Microsoft might have a few things to say about carriers offering "enterprise instant messaging" as a service. Why stick a carrier SIP proxy between your Microsoft messaging servers? Redmondites don't like being reintermediated.

IMS makes sense from the carrier perspective in consolidating the existing services they have into one architecture. Whether that justifies rip'n'replace on fully depreciated equipment and re-training everyone, I'm less sure. The mobile installed user base is huge, but IMS will grow up as a technology just as the access networks like Flarion, WiMax and WiFi come to obsolete the need for connectivity rationing technology like IMS.

There is the promise of seamless provisioning across multiple networks. But you have to ask yourself whether a vertically integrated, complex architecture such as IMS is really the solution. Isn't this a fairly simple identitiy and authorisation federation problem largely solved by existing IT technology? Why not offer a simpler layered approach?

A good moderator question was what was the litmus test of whether you had ‘true IMS'. The best response, from Intel, was "if you can change you app server without changing your session server in just a week, then you have IMS." Perhaps all IMS is about is the telecom industry discovering the difference between a web server and application server, just as the whole server business is being ripped out of their hands. A decade or two late, but never mind…

Another classic was the usual question: WHERE'S THE APPS? Specifically, what are the services a 15 year-old will want from IMS? The Ericsson response was such a classic (and representative) waffle on this that it deserves to be reproduced in full:

It's all about their methods of communications — they drive the envelope. Everyone comes back to gaming, but I see them spending time collaborating more. We need to shorten the distance between us in a more natural and personal way. These kids would like to communicate more effecively with voice, sight, sound — as many of the senses as we can technically do. The challenge of IP multimedia is to see if we can adapt to this. Be able to replicate these solutions re-usably. Presence and availability, to see if they're ready for a chat session, one that can give them video, voice and chat at the same time. Important thing is for them to have those choices. It's got to be brainless, easy to use, add new value. Today they can chat, get on their video cameras on the Internet.

Err, so, remind me again … where's the value-add of IMS? What new services does it enable?

Just to make sure, I visited the booth of IMS vendor Brooktrout. Nice demo of a game running on a PDA via IMS, but try to get out of them what IMS does for the user experience and nobody can tell me. The only user benefit again is back to that ‘seamless provisioning'. But Boingo does that today on WiFi across a zillion networks without IMS.

To add some more data points on IMS, I went to Hassan Ahmed's IMS presentation. He is the CEO of Sonus Networks, and IMS vendor. His core message:

"It's about empowering consumers. IM, chat, email, phone. They want to be able to seamlessly go between these services. Today's networks don't support that ability."

What! I've been doing almost nothing but seamlessly moving between them, and folks at MSN, Yahoo!, AOL and Skype have been busy making that experience on the Internet pretty slick. There's just no credibility to the story that IMS is fixing something that is totally broken. At best, a minor quality improvement at great expense in limited circumstances.

Hassan sees a transition from Long distance/POTS/Moble -> VoIP -> IMS; vertical integration -> converged networks -> converged services. But we can integrate services without IMS, and millions of VoIP users talk without it. QoS problems inside the edge device or customer network aren't solved by IMS.

Why is nobody calling the bluff on this? The game is over, it's dumbpipeville all round. A few small vertical niches with extreme security and performance needs are all that parts that require anything more.

Having see the WiFi and videoconferencing snafus the previous day, I was wondering. Would IMS have made things better. Perhaps. But the real value of IMS isn't the technology, but the values and attitudes of telcos. IMS should really be It Mustn't Stop. The telco attitudes to scalability, availability, and performance still retain value, even if the delivery technology doesn't.

To wrap up, here is a grin-aloud quote from a Sprint rep:

"IMS separates signalling from bearer channel, not money from wallet."

I think they're on to something, there. Don't you?

What’s wrong with video conferencing?

The usual answer is that we don’t have our makeup on straight and pick our noses during conference calls, and don’t want this stuff broadcast and recorded.

I think the answer is simpler. There’s nothing to point at!

Without having something to gesticulate at — other participants, a diagram, the window — you’re left limp and lifeless. So perhaps there’s a Superman-style blue backdrop screen type of technology that can re-insert those elements.

Whatever it is, it’ll have to be pretty clever to do it.

Posted by Martin via Telepocalpyse.net

Financial Times

Skype plus eBay equals conversational markets

By Stuart Henshall
Published: September 21 2005 03:00 | Last updated: September 21 2005 03:00

From Stuart Henshall of skypejournal.com.

What's the developer's view of the Skype/eBay deal? What are the new opportunities? From a telecommunications industry perspective is there less to fear or more?

Let me lay out the prize that Skype developers are playing for and put even more fear into telecoms suppliers.

Here's the situation. First, eBay has 500,000 sellers, most of which don't know or understand Skype. However, they are entrepreneurial, quick to copy best practices, and used to working with new forms of software. They are motivated by money.

Secondly, eBay has clarified Skype's strategy. There is no longer a question of "when will there be an enterprise version?"

Skype had been claiming to be a consumer play. Now it is clear it is a platform play, part of a multi-modal commerce engine and no longer has to remain cautious about the enterprise. It only has to unleash its developers and open up access.

And the start for developers is "call transfer". The functionality is almost embedded in Skype.

In the 1.4 beta "call forwarding" is available. However, call forwardingis an automated redirection and the inbound caller only knows the call is forwarded.

With call transfer, by contrast, the call can be answered and redirected to either another Skype account (free) or to a landline (at the transferer's cost).

On transfers, inbound callers will receive identity information on the person they are talking to. Call transfer enables interactive voice-response applications, effectively offering call centre functionality.

And because Skype call transfer functionality can bypass traditional private branch exchange networks, small companies can acquire enterprise-style communications systems for a pittance.

And imagine the ease with which the seller can direct details and similarly automate information content, such as allowing potential buyers to watch a video of the product free of charge via Skype.

Similarly, calls coming into an auction will have caller ID of potential buyers, feedback of buyers, and can concurrently provide additional information back, such as details of other auctions.

This isn't even a full list of benefits of the deal. There is the potential here to link Skype and eBay user profiles to databases on other services and create new communities and communication tools. But these will come later.

But for now, by combining their strategic direction Skype and eBay have created a world in which Skype enables a much broader platform. Thus connected to different application platform interfaces and also living within both PayPal - the company's online payment facility - and eBay, we see a Skype emerging which will enable developers to give free rein to their imagination and build a range tools that can be used, as long as they are certified.

Developers might design their own softphones, enterprise solutions, or even "pay to call you" channels - a Skype equivalent of premium telephone services.

Skype's goal of making communications free is two steps closer, by creating a business environment around the technology and then enabling people to sell access.

The opportunity for software-only developers may well turn out to be in designing the tools to manage that access.

But alongside the opportunity apparent in the takeover of creating a market around conversations, there are also questions.

Will Skype or eBay want to carry out much of this development themselves?

Will eBay block potential in the adult market - an area where a great many developers see potential?

What percentage will they want for facilitating the new market? There are very many unknowns at present.

To conclude: Skype/eBay/PayPal find themselves developing a platforming strategy for conversational markets.

At first, this will create new experiences and encourage new developer solutions at the intersection of the three businesses.

How open the enlarged business is to the innovation in the developer community could well determine its success.

There is a shared opportunity for the company and independent developers.

Ebay will undoubtedly find ways to achieve a return on the huge investment it has made in Skype, but the rewards could be all the richer if it opens the platform to outside influences.

Skypejournal.com is an independent blog providing news, views and support for Skype users and developers

1. Do you believe consumer acceptance of Skype-like softphones signals a broader change in consumer expectations?

2. What do you think those expectations will look like in 2008?

3. How long do you believe it will take for those expectations to filter through to enterprise customers? to the industries that serve them?

4. Skype had to muddle through with very little capital. Do you think eBay's infusion of capital will make Skype more competitive or less?

5. Skype's product vision was very influenced by their hardware and portal partners. How do you think eBay will affect their product vision? In other words, what eBay and PayPal business and customer needs will Skype need to support?

6. What will Skype learn by Skypifying eBay's user experiences?

7. Will the rest of Skype's customers benefit? Will their developer partners benefit too?

8. As Skype, PayPal, and eBay harmonize their APIs and roll out more, they will be a platform. How will that platform, and the services and apps built on it, compete with Microsoft? With carriers? With enterprise telecom system makers? With interconnects?

9. Given these factors, what does this mean to you?

Skype Journal has been exploring these questions for a week. We're keeping that focus here at VON.

What should VON goers really be concerned about? If you are headed there to secure the latest in VoIP equipment, then how safe is that investment strategy? In what context should you be thinking?

I sense there are at least 10 things we won’t learn much about at VON. They could be very important. Weak signals from other industries and simple usage and behavioral data that is standing straight in front of our faces, so close it is often hard to even see it. It's very easy to get wrapped up in industry details, mental maps and miss the broader changes. So when you are walking around VON this year look beyond the trade.

Things I don't think I will see or hear much about....

1. Will there be any presentation from ethnographers or research companies talking about the impact of soft phones on communication behavior? What is the impact of presence on usage? What's happening with headsets, handsets, and new device design?

2. Will mobile operators even be there? Will mobile handsets and dual WiFi mode handsets be talked about? Will I hear about the handsoff technologies and enterprise integration or will I obtain new home insights that will drive these devices forward.

3. In fact, what is happening in the home? How’s this VoIP stuff driving or changing consumer perspectives? What’s the outlook for the ATA box, and embedded solutions? Will the embedded WiFi handset kill them all? When will these products be rolling out?

4. Will mobility plays like Jambo, Plazes and Streethive be even talked about? Where do these social locating services fit in the future? Are they the next Gracenotes?

5. Will file sharing systems from BitTorrent to eDonkey be discussed? Will Podcasts and iTunes be part of the changing world view? Will we look at how consumers are managing data, photos (flickr) and mobile dating (Friendsation).

6. Will Orb Networks and TV - media content held by consumers - be introduced? How does this “edge” tivo work? Isn’t this just one video aspect? Will we really explore video, video messaging, video blasts and the future of the advertising industry?

7. Where is the changing face of VoIP at retail. How does the retailer build their VoIP business. What are the hot buttons with consumers? Where are the margins to be made? Will there be any discussion of devices, handsets, headset, and how they are being merchandised? What surprises will Santa bring this year?

8. What’s happening with emerging VoIP related software developers? What’s happened with Skype developers? Where are there opportunities? Where are the discussions on API’s? What API's do we need? Is there any progress on "wallet" solutions?

9. What is the instrumentation for success? What are the real statistics? What happens when we combine IM and Telephony? What segments emerge? What is the global picture? How many minutes are people spending in different modes. How is VoIP impacting on this?

10. Users.

    What bothers me most about VON is the industry has forgotten about the users. That is, the end users. In a world of increasing complexity I can’t begin to fathom the press releases and acronyms I see. I am not alone. Communication is about people. We have voices and a sense of presence. By nature we want to share and trade.

    This leads me to suggest that there is little on the agenda that will help me understand:

    • The socialization of communications media
    • The commercial implications of “edge” driven conversational markets.
    • The real impact of “presence” in a “real-time” always on world.

Wandering the halls of last year's VON I was stunned that so many didn’t see radical changes to pricing models coming, and how many more had never heard of Skype. At VON Spring in San Jose a few more had heard of Skype and some had even tried it. Still I know Skpye is banned in most of the companies attending. VoIP and VON is not a consumer definition under any circumstances. A radical would suggest today that telephony is really a tax on social exchanges. That no longer benefits anyone. The freedom to connect, converse and stay in touch is really for the common good.

Some think Skype was born of zealots wanting to change and disrupt the world. Others would simple say after 100+ years, enough is enough. I believe that the world is now a whole lot tougher for telecoms and VoIP providers. Concurrently, the portals have just got a sniff of what happens when their media distribution model is threatened. Don’t believe me. Just think about eBay and advertising via IM. Think about artistes selling their content. Consider selling access to you, whether for credits or access. Make no mistake, the new world, whether called a social media exchange or conversation markets, is set to favor you and me.

At VON this conclusion is all probably madness. What do you expect will be missing from VON?

We've looked at the buzz before.. Will eBay help to build Skype's Blogpulse score? No surprise that downloads apparently jumped after the announcement.

I just got off the phone with two teenagers from Brooklyn, New York. Gamers, both, who wanted to check that I was really from Skype Journal. It wasn't enough looking at the Skype Journal web site, they wanted to hear me talk, to say aloud "hey, I'm real and I'm the editor here."

There's a lot of getting-to-know-each-other going on in agoras. It is a practical, personal thing. It improves decision making because so much of our trust metrics are based on first impressions. I'm reading Blink now, because it is so on-topic.

Most of Skype's users have been individuals and their friends. And when used in businesses, they have, mostly, been small or home businesses. Skype just hasn't had the plumbing needed to do large scale or complex organizational telephony.

That changed Monday.

eBay directed Skype's management to continue undermining telcos everywhere. But they also added a charter: Skypify eBay. And that makes eBay Skype's first enterprise customer.

We'll be covering and analyzing this, but I see several excellent outcomes for Skype's ecosystem of users, developers, portal partners, and hardware vendors.

1. Skype will have specific problems to solve with measurable results. A year from now eBay will be getting a report that says "18% of Elvis Figurine auctions started a Skype call; 83% of those resulted in a sale." Focus on user behavior is a killer app. Skype can learn to listen differently and more. Cross-fertilization ahead.

2. Skype will address scale and complexity. How do you let 5000 people into a conference call for a hot auction? How do you extend the Skype names and profiles to work with eBay's more detailed and commerce-focused user identities? How can I dial a "room", like a product or a market category, instead of a person? The solutions should look good for all users, especially as they are rolled out in software, public APIs, specifications, and protocols.

3. Skype will open the client to eBay's developers. There is too much to do and everyone will want to expose their own parts of eBay through the Skype client. Remember, Skype is eBay's live, in-the-now, Offical eBay Time desktop presence. Microsoft, Yahoo!, AOL, and every other portal are busy packing the best of their web sites into their clients. As Skype opens up their UI to eBay's internal developers, they will open it up to the independent developer community too.

4. Skype will professionalize its operations. Skype hires brilliant designers and programmers. To Skypify eBay, Skype must shift being a garage band to becoming a symphony, from hand crafting code to becoming a sophisticated design studio and software engineering factory. The alternative is for execution to stifle innovation. As Tallin's agility embraces engineering discipline, everyone will see a new flowering of volume, speed and creativity in Skype's products and platforms.

5. Skype will mobilize eBay. As Skype's software continues to migrate to phone and PDA devices, eBay features will come too. You won't have to be at your computer to follow an auction, to bid, to browse Craigslist, or pay your bookie (you use PayPal for that, don't you?)
   
6. A house of repute. They will work out how to blend reputation derived from social relationships (Skype), transactional behavior (eBay), and institutional certification (PayPal).
   

Skypifying eBay's front office will build Skype's products and competencies. In two years they will be leaping out of their skins, ready to take their newfound knowledge and skill to Amazon, Monster, FEMA, GM, Samsung and the rest of the Online Global 5000. A delightful outcome for all concerned.