Skype Journal: Analysis Archives

Analysis

Hyping Skype - Lessons

Stuart Henshall on October 10, 2005 12:32 PM

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.

Pesky facts

Phil Wolff on October 6, 2005 08:29 AM

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.
Chart of Number of Visits and Visitors to Skype Journal March-September 2005

Microsoft will reshape the SkypeIn and SkypeOut business

Phil Wolff on October 3, 2005 10:34 AM

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.

Readable

Phil Wolff on September 30, 2005 08:45 PM

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:

Polls don't replace ethnographic research or instrumented clients that show what people do (not what they say they do.
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.
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.

IMS: It Means Something?

Martin Geddes on September 29, 2005 12:17 PM

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?

Proof by arm waving

Martin Geddes on September 23, 2005 10:14 PM

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

On Conversational Markets by Skype Journal in The Financial Times

Stuart Henshall on September 23, 2005 10:23 AM

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

Seven questions for VON exhibitors and speakers

Phil Wolff on September 19, 2005 06:13 AM

Do you believe consumer acceptance of Skype-like softphones signals a broader change in consumer expectations?
What do you think those expectations will look like in 2008?
How long do you believe it will take for those expectations to filter through to enterprise customers? to the industries that serve them?
Skype had to muddle through with very little capital. Do you think eBay's infusion of capital will make Skype more competitive or less?
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?
What will Skype learn by Skypifying eBay's user experiences?
Will the rest of Skype's customers benefit? Will their developer partners benefit too?
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?
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.

Ten Things You Won't Learn at VON

Stuart Henshall on September 17, 2005 05:28 PM

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....

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?
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.
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?
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?
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).
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?
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?
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?
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?
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?

Blogpulse on Skype eBay

Stuart Henshall on September 16, 2005 11:04 AM

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.

eBay: Skype's first Enterprise Customer

Phil Wolff on September 14, 2005 01:20 PM

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.

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.
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.
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.
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.
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?)
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.

Sold to mwhitman, a member from San Francisco

Martin Geddes on September 13, 2005 12:56 PM

A most valued reader (i.e. my brother — my mum is the other reader) points me to a colleague's blog busy referring to my previous entry. So to complete the nepotistic circle of cliquedom, I'll point you back to the other side of the echo chamber. It's one of the more succinct observations of what the Skype-eBay thing is about:

Google is now going to have to play an uphill battle. That battle was made conspicously apparent when Google released GoogleTalk. Why does Google continue to insist on invitations to grow it's Gmail accounts? Why is the only other registration mechanism is to use a mobile phone? I take it that Google understands the value of tying one's digital identity with something tangible in real world. That is you have a Gmail account because of your real world contacts or your ownership of a mobile phone.

Interestingly enough, it is eBay that has the enviable position of providing digital identities with true value. eBay's reputation system is without competition. A seller's ability to command a premium bid is affected by his reputation. Buyers without established reputations are sometimes barred from bidding. Paypal's verified attaches a real bank account to an identity. When one attaches a credit card to an identity, the address becomes verified and adds additional reputation for a buyer.

This is an elaboration of Stuart's allusion to the digital identity imperative of eBay and Skype:

Skype and eBay profiles: A huge winner in this area is possible. eBay will provide just one form of reputation data. Caller ID solutions are not far behind.

I gave a talk about 18 months ago one why the real asset of a telco was the data in its customer database, and not the network. Nice to see the real world catching up.

One shouldn't ignore the international aspects of this deal. It's easy to be parochially US or Euro centric, as Jonathan Boutelle notes:

This also means that in many emerging markets no one has heard of eBay, and eBay has no effective way to reach these markets other than expensive late-stage acquisitions.

Owning Skype will make eBay immediately relevant to millions of Pakistanis, South Africans, and Georgians. It gives them a way to reach customers and drive marketplace adoption in every country on earth.

The only way an eBay-Skype hookup can justify the price paid is if eBay infects Skype with transactional functionality. Skype has to burst out of a pure C2C voice play as there's not enough money in it to support big-league financial expectations. There are many break-out points, but B2C/C2B communications strikes me as the easiest to mine for gold.

Telepocalyptic prediction #1: We'll see a "merchant edition" of Skype within 12 months, and this will be indirectly a paid-for service to eBay sellers. Skype becomes the "PBX for micro businesses", and it's the seed from which eBay can grow a bigger assault on the moribund PSTN application, particularly the 800 number market. The economic driver will be increased conversion rates, larger transaction sizes, lower transaction defect rates (e.g. wrong address), and increased up-sell during closure. Only an advanced multi-modal client can achieve these things.

Telepocalyptic prediction #2: Within 18 months, Skype will be giving away ougoing PSTN calling to places with low call termination charges, in exchange for people adopting the Skype/eBay identity and proffering personal data. eBay needs to grow Skype as fast as possible to keep as much calling on-net as it can. There comes a point when your network effect means you can suddenly drop the price for a wide range of vital services to zero (think: search, browsers) in order to support an adjacent business.

As Yannick Laclau notes, the telcos will respond with their own scorched earth policy of offering PSTN service for free in conjunction with Internet access. As he later observes, this is fatal for the PSTN disintermediators:

The internet players are deflating voice to support their applications-layer businesses in commerce, content, and advertising; the telcos are deflating voice to support their growing broadband access business.

The losers in this will be folks who only make money selling voice. Top of mind in this category is Vonage, SunRocket, Packet8, VoiceGlo, GossipTel, and the other pure VoIP guys. Skype, I felt, was dangerously headed in this category until today's rescue by eBay.

Many of the telcos unloaded their directory businesses in a fit of panic to raise some cash during the downturn. This will now look foolishly short-sighted as local search becomes the hottest part of the telco value chain. Expect to see the most "e-enabled" local search providers being snapped up by Google, eBay and Amazon. (I'm not brave enough to make specific predictions! Apart from anything, I've not been tracking the space closely — go read Om and Andy for the detail.) This local directory business will be particularly critical to integrating "voice-centric" small businesses like plumbers, take-away restaurants, etc. rather than the web-centric ones that are the traditional eBay fodder.

The collective loss of the directory businesses will also weaken the ITU cartel's ability to dissuade the listing of non-PSTN contact identifiers.

Ultimately, though, I can't beat Stuart's pithy cluetrained comment:

A marketplace is nothing without conversations.

Whether the messages over Skypenet are worth the crate of gold that was offered, I'm skeptical, but the strategic fit is certainly there. We definitely live in interesting times.

via Telepocalypse.

eBay and Skype: Back to basics

Martin Geddes on September 12, 2005 07:20 PM

Two weeks ago, I explained how Google needed Skype to move Google up the value chain from when an advert is clicked. I noted that eBay was Google's real competition for connecting consumers to merchants, and eBay has a structured transaction environment. They don't just do the search, they also help complete the transaction, including payment.

So, a fortnight later, and eBay buys Skype. What does it mean?

Companies like Dell, eBay, Google, etc. got big by thinking big. They picked a unique business model, and drove it to completion without losing focus. To understand this transaction, you need to look for where the big prizes are.

The obvious one is the wrong one. Google and eBay are already in the business of generating sales leads. The Skype community, for all its size and vibrancy, is not being bought because they can be pitched to and turned into eBay users. Or if it is, this story will have a nasty ending where all the heroes get bumped off and the princess just grows old and ugly.

There are two conveniently located stones under which to look: transaction revenue, and the freefone number business.

Banking is big, slow, cartel-like and lacking in innovation. eBay is unbundling part of the transaction chain using Paypal, and re-intermediating the settlement process. Remember that Paypal is largely a virtual payment mechanism, used to front other payment services. Communications services are a natural generator of the small transactions that Paypal thrives on due to its low comission fee structure compared to credit cards. Skype and Paypal also have an international footprint, leaving many parochial banks struggling to offer a competing product. They fit together nicely.

This is classic Innovator's Dilemma stuff. Eat your way up into the big boys' businesses by starting with the small stuff.

So the first big prize is to suck some of the profit out of the banking payments system. This is a big pool, and Skype is just a small straw. That makes the eBay/Skype transaction interesting, but not critically important.

Guess what? Telecom is big, slow, cartel-like and lacking in innovation. And it has some big prizes ready for snatching. Almost all of current retail VoIP plays are abount disintermediating high end-user toll charges. It's a massive race to the bottom, where you get your monthly talk time by cropping three coupons off your Shreddies packet.

There are other puddles of money in telecom, though. One is the 800 number revenue bucket. I don't have the figures to hand, but this isn't a small deal. And because Skype is a child of the "stupid network", it can evolve quickly to integrate new transaction-supporting functionality making the profit pool bigger.

I suspect that eBay's ambition is to become the mediator of 800-number style interactions between consumers and merchants. The www.ebay.com web site is their text distribution channel, and Skype is the audio one. Each will have different sets of merchants, buyers and transaction structures. So don't look for "eBay" functionality to appear in Skype, because they're addressing strategically similar but functionally different needs.

One last thought. If you're a telco, now is a great time to cross your chest and start saying your Hail Marys. Someone with deep pockets is about to give away telephony to support their adjacent transaction business. Browsers are free — as long as enough people tip Bill G., search is free — as long as enough people leave a few cents in Larry, Sergey and Eric's pension plan. And telephony will be free — as long as you click the "pay here" button on your Skype-powered eBay telephony device often enough.

PS - eBay still hideously overpaid given the size of the effort needed to claim the prizes.

eBay buys Skype

Dina Mehta on September 12, 2005 03:51 AM

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.

eBay will host an investor conference call to discuss the announcement at 5 am Pacific Time today. A live webcast of the conference call can be accessed through the eBay's Investor Relations website at http://investor.ebay.com. An archive of the webcast will be accessible through the same link.

Full text of news release...

On Skype.com:

eBay to Acquire Skype

London, September 12, 2005 – eBay Inc. (Nasdaq: EBAY; www.ebay.com) 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. The acquisition will strengthen eBay’s global marketplace and payments platform, while opening several new lines of business and creating significant new monetization opportunities for the company. The deal also represents a major opportunity for Skype to advance its leadership in Internet voice communications and offer people worldwide new ways to communicate in a global online era. Skype, eBay and PayPal will create an unparalleled ecommerce and communications engine for buyers and sellers around the world.

“Communications is at the heart of ecommerce and community,” said Meg Whitman, President and Chief Executive Officer of eBay. “By combining the two leading ecommerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net.”

Founded in 2002 by Niklas Zennström and Janus Friis, Skype offers high-quality voice communications to anyone with an Internet connection anywhere in the world. The Skype software is easy to download and install, and enables free calls between Skype users online. Skype’s premium services provide low-cost connectivity to traditional fixed and mobile telephones. Skype’s software also offers a robust set of features, including voicemail, instant messaging, call forwarding and conference calling. Upcoming product innovations include Skype video, expressive content such as avatars, and customized toolbars for Outlook and Internet Explorer.

One of the fastest growing companies on the Internet, Skype already has 54 million members in 225 countries and territories. Skype is currently adding approximately 150,000 users a day and has created a thriving ecosystem of products, services, developers, and affiliates. Skype is considered the market leader in virtually all countries in which it does business. In North America alone, Skype has more users and serves more voice minutes than any other Internet voice communications provider.

“Our vision for Skype has always been to build the world’s largest communications business and revolutionize the ease with which people can communicate through the Internet,” said Niklas Zennström, Skype CEO and co-founder. “We can’t think of any better platform to fulfill this vision to become the voice of the Internet than with eBay and PayPal.”

“We’re great admirers of how eBay and PayPal have simplified global ecommerce and payments,” said Janus Friis, Skype co-founder and senior vice president, strategy. “Together we feel we can really change the way that people communicate, shop and do business online.”

Zennström and Friis will remain in their current positions. Zennström will report to eBay CEO Whitman and join eBay’s senior executive team.

A Powerful Ecommerce and Communications Engine

Online shopping depends on a number of factors to function well. Communications, like payments and shipping, is a critical part of this process. Skype will streamline and improve communications between buyers and sellers as it is integrated into the eBay marketplace. Buyers will gain an easy way to talk to sellers quickly and get the information they need to buy, and sellers can more easily build relationships with customers and close sales. As a result, Skype can increase the velocity of trade on eBay, especially in categories that require more involved communications such as used cars, business and industrial equipment, and high-end collectibles.

The acquisition also enables eBay and Skype to pursue entirely new lines of business. For example, in addition to eBay’s current transaction-based fees, ecommerce communications could be monetized on a pay-per-call basis through Skype. Pay-per-call communications opens up new categories of ecommerce, especially for those sectors that depend on a lead-generation model such as personal and business services, travel, new cars, and real estate. eBay’s other shopping websites — Shopping.com, Rent.com, Marktplaats.nl and Kijiji – can also benefit from the integration of Skype.

PayPal and Skype also make a powerful combination. For example, a PayPal wallet associated with each Skype account could make it much easier for users to pay for Skype fee-based services, adding to the number of PayPal accounts and increasing payment volume.

In addition, Skype can help expand the eBay and PayPal global footprint by providing buyers and sellers in emerging ecommerce markets, such as China, India, and Russia, with a more personal way to communicate online. And consumers in markets where eBay currently has a limited presence, such as Japan and Scandinavia, can learn about eBay and PayPal through Skype. Skype can also help streamline cross-border trading and communications.

With its rapidly expanding network of users, the Skype business complements the eBay and PayPal platforms. Each business is self-reinforcing, organically bringing greater returns with each new user or transaction. The three services can also reinforce and accelerate the growth of one another, thereby increasing the value of the combined businesses. Working together, they can create an unparalleled engine for ecommerce and communications around the world.

Transaction and Financial Information

eBay will acquire all of the outstanding shares of privately-held Skype for a total up-front consideration of approximately €2.1 billion, or approximately $2.6 billion, which is comprised of $1.3 billion in cash and the value of 32.4 million shares of eBay stock, which are subject to certain restrictions on resale.

The maximum amount potentially payable under the performance-based earn-out is approximately €1.2 billion, or approximately $1.5 billion, and would be payable in cash or eBay stock, at eBay’s discretion, with an expected payment date in 2008 or 2009. Skype shareholders were offered the choice between several consideration options for their shares. Shareholders representing approximately 40% of the Skype shares chose to receive a single payment in cash and eBay stock at the close of the transaction. Shareholders representing the remaining 60% of the Skype shares chose to receive a reduced up-front payment in cash and eBay stock at the close plus potential future earn-out payments which are based on performance-based goals for active users, gross profit and revenue.

The above-mentioned dollar and eBay share amounts are approximate, based on the Euro-Dollar exchange rate and eBay’s stock price as of September 9, 2005. The final value of the stock component of the consideration may vary significantly from this estimate based on the value of eBay stock at closing.

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.
About eBay Inc.

Founded in 1995, eBay pioneers communities built on commerce, sustained by trust, and inspired by opportunity. eBay enables ecommerce on a local, national and international basis with an array of websites – including the eBay Marketplace, PayPal, Kijiji, Rent.com and Shopping.com – that bring together millions of buyers and sellers every day.

About Skype Technologies SA

Skype, the Global Internet Communications Company™, allows people everywhere to make free, unlimited, superior quality voice calls via its award-winning innovative peer-to-peer software for Windows, Linux, Mac OS X, and Pocket PC platforms. Skype is available in 27 languages and is the fastest growing voice communications offering worldwide. Since its launch in August 2003, Skype has been downloaded more than 163 million times in 225 countries and territories. Fifty-four million people are registered to use Skype’s free services, with over 3 million simultaneous users on the network at any one time. Skype Technologies SA is headquartered in Luxembourg and is growing its offices in London and Estonia.

Forward-Looking Statements

This announcement contains forward-looking statements regarding Skype and the expected impact of the acquisition of Skype on eBay’s financial results. Those statements involve risks and uncertainties, and actual results could differ materially from those discussed. Factors that could cause or contribute to such differences include, but are not limited to, the timing of the closing of the transaction, the possibility that the transaction may not close, the reaction of the users of Skype’s services, the future growth of Skype’s user base and public acceptance of Internet voice communication services, rapid technological changes in the Internet voice communications sector, the reaction of competitors to the transaction, global developments in the regulation of Internet voice communication services including those provided by Skype, the possibility that integration of Skype’s offerings following the transaction may be more difficult than expected, and the possibility that entry by Skype and eBay into potential new lines of business will not be successful. More information about potential factors which could affect eBay’s business and financial results is included in eBay’s Annual Report on Form 10-K for the year ended December 31, 2004, the company’s Quarterly Reports on Form 10-Q, and current reports on Form 8-K. All forward-looking statements are based on information available to eBay on the date hereof, and eBay assumes no obligation to update such statements.

The eBay announcement:

***A New Way to Communicate***
I’m excited to let you know that eBay plans to acquire Skype, the leader in online voice communications.

Skype has set a new standard in online voice communications with
outstanding sound quality and unmatched ease of use. And like eBay,
Skype has a fast-growing community -- some 54 million Skype users
around the world already use their PCs to talk with one another.

And best of all, conversations between Skype users via PC are free. You
can get up and running on Skype in just a few minutes. Just go to http://www.skype.com/go/x.home to learn more and download the free Skype software application. Try it – it’s fun!

Over time, we intend to make voice communications a part of the eBay
marketplace – a huge step forward in making transactions faster and
easier, as well as bringing even more interactivity and humanity to the
eBay Community.

You can include your Skype ID in your About Me page. For now, however,
Skype links may not appear in View Item pages. We’ll be working with
you, our Community, over the next few weeks to thoughtfully work out
the details of how eBay and Skype will interact, including any policy
changes that may be required.

We expect this acquisition to be finalized soon. In the meantime, you can learn more about our Skype plans in the news release we issued just a few minutes ago.

Working together, eBay, PayPal and Skype will redefine online trade and
community. I hope you’ll join us in this exciting new chapter in eBay’s
history.

Sincerely,

Meg

Morning jolt of cola: eBay gossip and Skype bizdev misses the point

Phil Wolff on September 8, 2005 02:22 PM

The Ebay rumors are hilarious. Nobody can verify or confirm anything. Not even vague denials from any of the parties. Who benefits from the leak? Skype's VCs pushing valuation buzz and Skype's bizdev team, both to better arm-twist partners.

Everything Skype can offer eBay or its subsidiaries (technology, network access, Skypification of its user experience, PayPal currency conversion of Skype Minutes) can be delivered as a service, without an equity entanglement.

And then you get the Skype Voice announcement. Bill Campbell does a fine job skewering the outrageous charges imposed by Skype. Can you imagine paying 30% of a sale to your credit card company? Or to your phone company for letting you hook up your computer to the phone network? That's Skype's program!

But that's not the worst of that deal. It's that Skype's BizDev team is driving for tactical profit but creating a strategic disadvantage. I'm tempted to say they're trying to think like a mobile service provider but Bill says it looks like simple opportunism.

This deal is an innovation killer.

This type of deal, cherry picking three players out of an entire industry, only reinforces Skype as a "walled garden," a private, tightly controlled place with one master. The other way to do it is to set things up so anyone who wants to compete can do so. Publish protocols and specs and some common tools for call termination (SkypeLite, maybe?) and for commerce. Set rates comparable to what credit card processing companies charge for debit transactions; Skype minutes are risk free since all funds are prepaid cash.

By the way, do you understand what Skype Voice companies do? They are middleware. You call a number. Their computer picks up the phone and answers with a recorded message. It creates a user experience for you using a library of prerecorded messages, a little speech recognition, Voice-XML to guide the conversation, and whatever database of content you're sharing. Like calling up for movie times and making it easy to search for the blockbuster playing near you.

Enormously helpful.

And these companies offer the service now, on regular phone lines, on toll free numbers. They make their money by selling their service to companies that want to engage their customers over the phone. Like banks for bank balances. Or a newspaper for delivery problems. Or a shipper for tracking problems. In none of these examples does money change hands. It's just my business process talking to customers in a convenient, narrow, well structured conversation.

They don't pay the phone company extra for the privilege.

Skype's partnership model doesn't allow this. If there's no revenue, nobody gets paid. And Skype must be paid before they let you pick up when a Skype caller rings you.

Skype's model doesn't allow public service implementations. The volunteers who put together KatrinaHelp would love to implement a service like this but will not charge the dispossessed to find a lost child.

And companies that want to plug in their own IVR systems are shut out too.

Like Bill said, it's a mess.

Instead of putting up a new api, protocols, etc. upon which vendors can innovate and add value the way tellme adds value (terminating calls and doing something with it), they are doing custom deals for a handful of players for short term cash, closing out the developer and entrepreneurial ecosystem including dozens of Tellme rivals.

Skype can fix it but, as it stands, the Skype Voice program is one step back.

Chinese Skype partner TOM Online's SkypeOut is blocked

Phil Wolff on September 8, 2005 04:34 AM

TOM Online faces severe competitive and regulatory problems in China per reports compiled by Jirong Zhou. Jirong posted to his Zalbazone blog that TOM Online is not only far last in a three-way race for the Chinese IM market, but that major telecom operators are defending their own VoIP strategies (vaporware?) by blocking Skype.com and SkypeOut in major Chinese cities.

This is another example of telco incumbents aggressively defending their turf. Could Skype have picked a better partner, one with stronger guanxi, one better able to negotiate access to China's major markets and forge more alliances with China's regulators and incumbents? Right now they're walking away from SkypeOut revenue. How long until Chinese users get the same service as Skype users everywhere else?

The full article, including screenshots of the blockage and quotes from Tom.com CEO Wang Leilei follow...

From this post.

Cold Water
For Tom.com, third largest Portal in China
For Skype, world's largest VOIP player
For Tom Skype, their Joint Venture.

Just 3 days after Skype and TOM Online announced an exclusive joint venture (51% TOM Online, 49% Skype), there appeared a negative news on Sina's homepage, China's largest Portal. Telecom Operators are going to block Skype in ShenZheng, Shanghai, Beijing, GuangZhou. Red circled in the up picture.

I found the picture in Tom's Skype forum showing he is unable to login SkypeNet. A journalist from First Financial Daily reported his experience by calling China Telecom Shenzhen branches' 10000 service number. They said:
We detected that he used SkypeOut which is illegal to use. His number is in the black list. He must Guarantee not to use it any more. Or he will get the FINE.
Tom failed to land SkypeOut in June. And the Information Industry Department files that it is illegal to operate VOIP except the 6 Operators in China.
Within one year, TomSkype successfully get a 3.4M user group. It's an amazing rapid speed, however it still looks too slow, compared to Tencent's hundreds of Millions user group. Wang Leilei, Tom.com CEO, said,
"It's impossible to be profitable even if the 3.4M users are all using SkypeOut. So we are not going to seek opportunities to land Skypeout in the near future. The joint company is going to enrich user experiences with TomSkype."
Virtual Operators
Though it's illegal to offer VOIP Service, there are many operators making deals under the surface. Up to now only 263 got a pc to pc VOIP operating license.
Phone to Phone and PC to Phone are settled as basic Telecom service, only the 6 Operators has the legal identity to offer service. All other parties are designated as Virtual Operators. What's their fate?

[Posted by Jirong Zhou 2005-09-08 19:36:22. Mr. Zhou is business development and marketing director for Skype developer The Masters Team, maker of PowerGramo (coming into beta soon).]

Skypemonkey

Phil Wolff on September 7, 2005 08:18 AM

How do you open up your software's user experience to outside parties?

It's distressing to hand your hard fought, crisply crafted, sophisticated design to imperfect strangers.

But you must.

It's key to learning new things. To multiplying the value you create by the curious, concerned, and committed. To meeting more customer needs. To lock-in.

So what's the best way to do it?

Prior art includes plug-in standards, high level human-computer interaction specifications and browser based methods.

With plug-ins, you parameterize everything within a few fixed guidelines. Think about Adobe Photoshop plug-ins, all looking more-or-less the same, but packaging different calculations in one consistent set of controls.

Sometimes a plug-in definition restricts too much. Kai's Power Tools went outside the Photoshop client to create user surfaces that better served user goals than anything possible within the plug-in UI spec.

"An interface is about hiding complexity from the user, It's about guiding a process, without cognitive understanding of what goes on beneath. Interface design is the art of enveloping the observer in an enticing, "try this" exploration with ever-new elements and designs as the tools to triumph in new territories." - Kai Krause

Ever wonder why it's easy to learn a new Macintosh program? Apple's famous UI specs for the early Macintosh OS guided the design of Mac apps.

Enter the AJAX era [wikipedia], a universe of loosely coupled, thoroughly decentralized, OS-independent applications. Where 14-year-olds can create toolbars for Firefox that produce new navigation of Flickr's photo site. Where users record and share Greasemonkey scripts that rewrite web pages so phone numbers become clickable SkypeOuts. Where Vonage users write and share desktop widgets to show Vonage status, minutes used, and performance. Where a weekend hack shows a Google map of a Craig's List of apartments renting near you.

Ten years' ago users were putting up words and pictures on the web.

Five years' ago users were storing them in databases.

Now we're creating applications, in a wave of design riding atop existing data, databases, and services.

The elements are straightforward, even if creating an effective platform remains an art.

So here's my first cut wishlist to open Skype's UI.

Open up your embedded browser to users
Let us open arbitrary web pages
Open up your tabbing and menuing navigation, subject to to
Expose its document model
Add JavaScript
Add Java
Support the web2.0 protocols: RSS, Atom, XML-RPC, SOAP, etc.
Support Flash
Open up the messaging/alerting system
Open up the help/documentation system
Build a toolbar system, so I can configure feature sets
Docking of external UI components/widgets with or within the main application
Skin the UI, so I can distribute my enterprise's branded skin or my Natasha Lyonne fan club skin.

Let

engineers add functionality,
designers adapt function to specific purposes,
partners to channel their content, and
users to make their copy of Skype their own.

Create a safe and flexible place, and they'll experiment and play.

VoIP Bingo - Telecom Identity

Phil Wolff on August 26, 2005 09:36 AM

Vonage thinks of itself as a phone company. Others do too. Google does not. While being thought of as a telco simplifies your positioning and marcom plans, there are tradeoffs. For one, you don't have a portfolio of other services and activities to leverage.

For example, Google can easily GTalk-enable its email, social network, and blogging services. They are already building on their digital identity (gmail accounts). Tribal search ("hey, team, let's find who leaked the story.") can't be far behind.

Yahoo! can deliver movie previews and Microsoft can let you know of updates to your blog.

Vonage and Skype don't have other assets to leverage. At minimum, they can be more reliable (apparently the Vonage approach) or add more features (the Skype approach). At best, they can partner through alliances and through turning their networks into open application platforms.

Can the landed gentry of telecommunications change their self image and their brands?

VoIP Bingo

Phil Wolff on August 25, 2005 09:51 PM

It's been a busy week. Vonage going public. Google Talk launched. SkypeNet and SkypeWeb announced. And everyone's waiting for the portals to jump in hard. MBAs around the globe are figuring out where all the players fit, where they're strong or weak, going up market or down, mobile or landline.

So let's play.

Four buttons on the left:

S for Skype
G for Google
P for Portal (AOL, Yahoo!, MSN, et al) and
V for Vonage

To Play:

Name your axes, label the columns and rows
Place the tokens on the grid
Write a Caption
Post it to your blog and leave us a comment, or email it to FUN @ SkypeJournal.com

We'll post your chart, and ridicule it without mercy. (Maybe learn something, too.) Do your worst.

Google Talk Skype Killer?

Stuart Henshall on August 24, 2005 12:28 AM

Is it all over for Skype? As Google Talk launched tonight with an Orkuttian viral shove provided by Gmail. At first glance it could be Skype's worst nightmare or the kick start necessary to refocus Skype. If you missed the buzz, Google Talk is the long awaited and predicted IM / Voice client. It won't be over for a while and the battle will take to the trenches with Yahoo, MSN and AOL battling to the end. This is a first salvo. Don't expect Google's feature set additions to follow Skype's path immediately to Telecom as Google has other opportunities sitting there within its empire. These are my first impressions.

Extreme Simplicity. If you have a Gmail account you can just log in. The client is very simple.
Find buddies quickly. If they are in Gmail then you can make hundreds of invites very quickly. Authorization is simple.
Presence. Simplified and more intelligent than ever with customized field options that add new fun to presence. It's about time!
Chat. Very basic, no emoticons etc. Still it's clean and archived and I bet searchable (if not now soon) by google desktop. Chat uses XMPP and thus iChat and Jabber clients can connect directly to Google Talk. You can also add it immediately to Trillian. (Trillian could be quite a winner). Guess that will put Google Talk presence on mobiles too!
Talk. Talk is chat centric. Ie click to chat rather than Skype's click to call. Clicking opens a chat dialogue box. You then initiate a call from the chat window. Talk quality matches Skype and is better than Yahoo.
Chat Window Organization. Windows self organize in an interesting fashion until closed.
No profiles and no friendly pictures at this time.

How it really worked.

I had 8 conversations all around the world. Some of the voice connections didn't connect immediately and felt like they failed. There was just no sound. Sometimes the sound started after the call was connected for 30 seconds or more. This is likely just a short term bug. I enjoyed the inbound ring tone. Distinctively different from Skype. The invite process was very simple, building my list very elegant.

What's Missing?

From a Skype user's point of view: Almost everything. There are no profiles, no photos / pictures, no voice mail, no multi-conference or multi-chat. Plus there is no SkypeIn or SkypeOut capabilities. This is not a phone replacement. The multi-chat and conference calling should be easy to duplicate. The telephone system more difficut. However, each name is a SIP name and that is designed to connect with Vling and Gizmo project in a very short time. Plus with rumors around Google raising money, a TMobile USA purchase can't be that far away. That would provide a user base, the WiFi hotspots and most importantly the chance to integrate mobile numbers with VoIP.

Where's the Strength?

Talk is already integrated with Gmail and thus links nicely with IG, Google's personal content portal. So when will GoogleTalk have access to Orkut (profiles / social networking - pictures and profiles) Blogger (another place to share presence), Desktop (archive searching), Maps (location information) and instantly the whole Jabber/XMPP community. How quickly can Google bring these all together. Then they already have a photosharing program etc. Google has all the elements to bulk up to a Yahoo like client very quickly. Add in Ad Sense etc. Very neat models are likely to emerge. I heard from one punter tonight they had told their mother to buy more Google shares.

Developer Talk

Google has a great page outlining their preliminary plans and open strategy for the future of "talk."

Google's mission is to make the world's information universally accessible and useful. Google Talk, which enables users to instantly communicate with friends, family, and colleagues via voice calls and instant messaging, reflects our belief that communications should be accessible and useful as well. We're committed to open communications standards, and want to offer Google Talk users and users of other service providers alike the flexibility to choose which clients, service providers, and platforms they use for their communication needs.
Google

How does Skype stack up? Yahoo?

Google may win on philosopjy alone (see above mission) or the resources in dolars and manpower. However today, while Google may get it's Orkuttian swell of new users isn't actually an acceptable replacement client for either Skype or Yahoo. Both do more better for their current audiences.
On features, Skype is still ahead and if they would speed up their development and releases of call forwarding, VM improvements, Video, and their Presence Server they still have a chance althougth the market has shifted dramatically. Yahoo is bulking up however still does nothing really well. That may change.

Where should Skype's strategy start?

Open Up! By contrast with Google, Skype is on a philosophical back foot, well balanced. Being closed is no longer an asset, so Skype can compete only on its design, features and capabilities. To open up, the Skype chat client must adopt the Jabber/XMPP protocol, accelerating its interconnect and encouraging developers to "stick" / "start" developing products around the API. So far Google hasn't announced an API (count the hours). They will need one even if just for hardware. Skype will be forced to open up many aspects of its interface now.

Skype Rambles

Stuart Henshall on August 22, 2005 09:46 AM

I had an interesting discussion a few days ago. One of those rambling international ones with a fellow who like me has watched Skype from the beginning. I jotted a few notes down, ideas and points that were made or fleshed out.

Skype 4 Million Active Users Online
Is Skype Netscape
More than Buddies
Free Calls
Voice Differentiator
Developer Program
Skype Video?

Skype 4 Million Active Users Online

The Skype client shares how many are online. Currently I see just over 2.5m. Before the summer arose, we saw this number peak around the 3.25m point. The numbers have been at best flat or declining since then. So if Skype numbers are soft and college kids return to school in September, then we would expect a jump. Conclusion: if Skype is at less than 4 million users online by end of September then somewhere we have all miscued on growth. In that case, Skype may rush video to market to bolster numbers.

Is Skype Netscape?

Microsoft ignored Netscape for a good year, then turned everything around to kill it. Microsoft's IM client sucks. Skype is not Netscape, and there are several voice/IM clients in the play today. Yet, some believe that Microsoft can still turn the corner on Skype. Here's their challenge. Skype, unlike other IM replacements, has created a new "collective" cross-platform buddylist, including phone numbers and people that had never used IM before. The shaping of these new buddylists are now well underway. The more numbers, more names and more buddies people have on Skype the more difficult it will be to jump back to an old client. I have to move the majority for it to be successful. Otherwise I am again using dual clients. Unless there are new features that materially affect the way I work or socialize, the desire to shift won't be there. Just look how long people stuck with the old telephone.

More than Buddies

In my case I have over 250 buddies/numbers on Skype. I never collected the same number (or even came close) on any other messenger system. I'm sure it is an extreme (although my SmartPhone mobile has even more contacts in it) Migrating back to an old IM system even an improved one will not be easy. Add to this hardware (like RTX dual-phones) say $150 in misc hardware that one buys over the next year. Will that work with the new IM system? Will I have to write it off or will I be able to download a software upgrade that will allow it to now work with another IM system. How long will it take the manufacturer to catch up? Hardware represents a potential psychological lock-in.

Free Calls

Voipbusters is providing a free calls almost anywhere service that I reported on last week. Skype isn't working hard enough to reduce call costs. On the one hand, one voice in me says that isn't necessary and why antagonize Telecom's further. The other voice shouts "Free" is a fundamental part of the business model. So how does Skype make all my calls free? How does Skype reduce my broadband cost to zero? Is this an advertising mechanism? Does Skype empower me to sell some data? How can Skype create a better conduit for information exchanges between buyers and sellers? Can Skype more economically deliver the mail.... so to speak? Skype's economic opportunity is to reduce the cost of connecting to the net to free. They are getting there on interconnecting (PC to PC). If Skype doesn't do it the next new entrant will. Does it make sense? Should one use subsidies from one industry to fuel the growth of another? Why not?

Voice Differentiator

So far the only real differentiator Skype has had is voice. It's that part that really made the difference. While firewall busting and installs are important it is the stickiness of voice that created Skype and keeps it growing. However, we've seen no real advancements in voice since Skype launched and GIPS provides the majority of the audio solution. It's now been duplicated and adopted by others. So where is Skype's innovation? Where is the next generation features that will be harder to duplicate and more compelling? I'd look to presence and location information. Concurrently, identity - profile provide an interesting possiblity for leverage. The challenge will be how to enable and gain consumer trust.

Developer Program

Cynicism around the developers program remains. This may stem from Skype's willingness to do deals with "big names" e.g. Motorola, Logitech, Plantronics, (even when some of them have yet to launch a product) and yet completely ignore the small companies and individuals. This leaves one to wonder where it leaves a company like VoipVoice who make the CyberphoneK and provides one of the best software API integrations for usb hardware. It would appear inevitable that Skype just absorbs their plug-in and builds it into the product. Thus any Skype certified hardware device will be supported.

Skype Video?

It may be a question of when. It may also be a question of for what? Will Skype Video be limited to Windows only? Have they choosen a codec that will enable video to follow into OSX, Linux and Symbian? A video solution that stops at Windows won't have the same impact.

How do you measure a cloud?

Phil Wolff on August 20, 2005 02:53 PM

Skype hasn't told us important information about their numbers. This hurts our ability to interpret them (not that we'll stop trying). Continue and see our letter to Skype.

Dear Skype,

Have you always measured "minutes served" the same way? Or has the data collection changed?
Does a 5 minute conversation among 3 friends = 15 minutes served? Or 5? Are they "person-minutes" or "conversation-minutes"? If one of the friends is only on for 2 of the 5 minutes in the call, do you report 12 minutes served (5+5+2)?
Are you including fractional minutes? Your contract says you bill 64 seconds as one minute and 65 seconds as two minutes. Are you counting "minutes served" this way too?
How do you get your data? Are Skype clients pinging you as they enter and exit a call? Or do they ping you during a call, a keep-alive ping? Do all pings get through; are you scoring 100% of the calls made p2p in the network?

About the number of people on the network at the same time:

Why do I see a different number than someone else in the cloud?
People log in or log out all the time. How long does it take for you to learn of this action?
What happens when someone just kills their Skype client, not politely changing their presence. How long does it take for my absence from the network to reach you?
It takes time for the cloud to propagate data. Are you getting this data equally from all regions in the world?
Dial-up users come and go more frequently than midband users. Do you have any way to distinguish dial-up presence from others?
If my presence is set to "invisible" do I still show up in your numbers? If my presence is set to "away" or "do not disturb"?
If I have multiple identities / instances of Skype running on my computer, do you count each of them, from the same IP address? Are you counting Skype IDs or people?

If you spell out your methodology, it will help the news and analyst ecology to get our stories right.

Wickedpedia

Martin Geddes on August 4, 2005 02:52 AM

As an educational aid, Telepocalypse is pleased to offer its readers this essential glossary of industry terms. Simply print it out, fold it up, and stick it under your keyboard for your wife to discover and clean away next spring.

SIP. Abbrev. Standard Initiation Protocol. A meta-technology designed to inspire people to create new, proprietary and competing standards and implementations containing subtle incompatibilities.

VoIP. Very Old Idea Phone. A revolutionary way of extending Bell's original vision for the telephone, allowing you to dial with a mouse click as well a touchtone keypad and rotary dial.

IMS. Internet Monetisation System. A minor adjustment to Internet Protocol to add a "price" field to packet headers. Earlier versions referred to Innovation Minimisation System. This usage is now deprecated. (Expected release Q2 2012, not available in all markets, check with your service provider in case of sudden loss of unmediated connectivity.)

E911. Slang. Emergency! 911. Whenever an incumbent telco feels chest pain, hot flushes, and sudden loss of wealth, they should call their local political office and declare an “Emergency 911”. (A tax-deductible campaign donation of the usual $911,000 is also expected in return for rescue service.)

ATA. Auntie's Telephone Adapter. Gives your desk phone a thicker, less flexible "Ethernet" cord and and weighted anchor to stop your clumsy aunt knocking it onto the floor again.

SBC. Archaic. Session Border Confuser. System designed to prevent Skype users in different corporations from being able to talk to one another. No longer in common use.

Just a game

Martin Geddes on July 21, 2005 04:55 PM

I can recommend this short but thought-provoking article over at The Mobile Technology weblog.

In essence, it critiques mobile J2ME and BREW because they're denied access to the communications-centric functions of the mobile handset.

I've long thought the same thing. What I'd like to see is these environments deploy "opaque objects." This means that they would be able to query and manipulate things like your address book, but without actually seeing the data. Only the phone OS would see the data itself; the program would just hold an object handle. Functions like iteration through the address book, comparison, and set operations, would all be offerred. A number of user interface components would be offered native to the device to perform standard operations like the selection of one or more contacts, or the addition of new entries.

This would help to reduce the danger of privacy and security lapses. A progam that can't see your actual address book data can do less harm to your privacy.

I also believe that the provisioning of access permissions of applications could be substantially improved. When I download a J2ME application, and it wants to access the network, I'm forced to go through a handset-mediated screen asking every session if I want to accept once, repeatedly (but just for the session - not forever), or not at all. This is a gross inconvenience. We don't pop up a "do you really want to make this phone call" confirmation when you press the green button.

What I'd rather see is the permissions get set at install or purchase time. The install-time part is fairly self-explanatory - you set the access parameters to resources like profile, address book and network. The purchase-time one is more subtle, and really refers to the wired Web. The download app would come with a digitally signed set of permissions from the retail environment, where you have provisioned your access preferences. When you buy a certain networked game, you just tick a box saying "I understand that this game will be given access to my address book, and may access the network incurring packet charges." The appropriate permissions are then tagged on, and you are never asked again on the handset.

Some of these could be parameter-driven. For example, my email application may be allowed to transfer up to 1Mb a day without asking, but above that I should be asked to give my consent. Waiting until the app is on the phone is too late to start provisioning this kind of thing.

This would possibly give network operators' in-house mobile portals a large advantage, as third party sites may not have access to this signing facility and their user experience will suffer. Users downloading from third party sites would have to deal with more intrusive access screens on the handset.

Naturally, a balance is to be struck between privacy and convenience. You can ask too many authorisation questions and put people off. But today's model of simply not allowing some highly valuable functions to be accessed by handset applications is decidedly not convenient, either. There are many low-level functions in the phone which could contribute to an enhanced application experience, if only the operators and handset makers weren't so scared of exposing then.

This model also extends to Windows applications. We won't see it, because Microsoft has gotten lost in the wilderness, but here's what I'd like Windows to do when I install a new app. I should be presented with a human-digestible list of the key permissions it is requesting: "Access the web site 'foo.com'", "Modify files in the 'My Documents' folder", etc. (By default, it should only have access to its own preferences directory. And I should be able to increase or decrease permissions - not just "take it or leave it".)

Just because an app gets a buffer overflow or has a control logic bug shouldn't mean it gets to trash my whole hard drive and access the whole Net. All those worms that download via browser bugs would have a hard time, because being able to execute arbitraty code wouldn't automatically enable access to all OS functions. If you go to hax0rs.com by accident, and get a pup-up from the Windows OS asking if you want to authorise access to your address book, you should be deeply suspicious.

(As an aside, the security model of Windows is very broken, and will stay that way, because actions are done on behalf of users, and not applications. Just because I downloaded and installed an application doesn't mean it should be trusted as if it were me. The user model doesn't match the trust model. Unix/Linux is barely any better, but at least you can fake it by creating a different user for each app and constraining its actions accordingly. Ideally you'd have a file system where any haywire application could be terminated and the changes it had made simply undone. Windows also doesn't make it easy to distinguish pop-ups that have come from the OS itself from those generated by the application. Another security headache.)

I hope you've managed to follow this rather abstract stuff, but really it's very simple. If you're going to give applications access to data and facilities that could harm the user, you need to put in appropriate controls, and make the provisioning of them simple. It may be just my ignorance of current developments in 3GPP standards etc., but it seems we are lacking on all three fronts.

via Telepocolypse

Skype Developer Ecosystem Gets a "D-"

Stuart Henshall on July 11, 2005 01:30 AM

Skype Technologies S.A. is failing its independent software developers.

What must Skype do to develop a successful developer community? Skype Journal Grades Skype's independent software developer ecosystem with a big D- How would you score them? How do you approach such a problem?

Developing an effective developer community requires more than just the desire, it require a model, something that will stretch the internal team and inspire developers. It must be so simple that the parties get it. So effective that key dialogs can start.

Eight key dimensions drive the success and behaviors necessary to nurture an effective developer community. This is not just about words. It is also having the right types of personalities and roles involved to make it happen. Too often a developer community is viewed with systems focus. I'd offer up that it is about people. People in all these roles

Judge for yourself: How does Skype's management of the Skype API and developer program score on each of these factors? Where could they improve? How would this map versus Microsoft or Java or...... Rate them "A" to "F" on each of these. Rate them today, then rate where you think they will be in six months. Are they on tract to be the ultimate partner for developers? What new ground must they break to get there?

Architecture Evangelism: Are the systems and documentation for developing your product on the Skype platform clear and comprehensive? Are short-term feature release timetables published? Are road maps disclosed and updated? Are contacts easy to find? Do you know who to talk to? Is access managed and measured? Is the developer education program diverse (accommodating many kinds of programmers), dispersed (geographically and across time zones), stepped (from beginners to gurus, from generalists to specialists), affordable, and comprehensive?
Score: D-

In Six Months? This is totally dependent on Lenn Pryor. C maybe.
Creative Opportunities: Does the API expose many features? Can they be combined to do novel and interesting things? Do they provoke innovative and competitive products and services? What unique opportunities does the API offer? Can solutions bridge APIs etc? Does the Skype developer program provide tools for experimenting and testing a developer's work in progress?

Score: B.

In Six Months? This will be a C- unless they expose more
User Experience: Does Skype help developers create "star" products and services? Toolkits? Is there effective brand synergy and marketing impact? Are third party tools seamlessly blended into the Skype user experience? Best practices: Apple's UI standards.

Score: F.

In Six Months? We'll see whether they become developer friendly C-.
Supportive Team: How effectively does the ecosystem work as a team, as a community? How free and productive is the exchange of ideas? How effective is Skype's communication and updates to the community? What is the opportunity for co-development with Skype? What are the risks of Skype obsoleting third party products through surprise changes to the API? When and how does Skype compete directly with developers and other partners? How well is Skype staffing to support the developer community? Best practices: Microsoft Developer Network.

Score: F.

In Six Months? Unlikely to see a roadmap in less than six months. Could still be an F although a frustrated and trying F.
Legal Agreements and Public Policy: Are contracts and deals between Skype and developers effective? Are they fair? Do they reflect the realities of how programmers develop software and how users use software? Is the legal language clear? Are accurate translations easily available? Are the license terms and conditions best-in-industry? How much does Skype protect developer rights and interests? How well does Skype protect developers by protecting end user privacy? How actively does Skype advocate to governments and industry for personal data privacy, the right to connect, and against hostile regulation?

Score: F.

In Six Months? Complete lack of action or general obstruction. This needs to be an A if Skype is to win.
Business Exchange: Working on Developer Time: Do you respect the ISV developer's time? How many minutes does it take for a developer to get a technical answer? to apply to the developer program?

Does the Skype application enable a two way information exchange? Is data flow through the API one way or two-way or even multi-way? How much is static vs dynamic? Exchanges with the client, exchange of information with the user? Security of information? Privacy management, user rights protection? Can developers build on information exchange to create commerce transactions?

Score F:

In Six Months? I truly wish for improvement. C.
Value Creation: How's the money managed? Integrated? Can payment to the Skype ID be made? Can withdrawals or payments be made? Who pays for services or products? Does Skype offer download "options" for certified software add-ons? Is there a river of monetary opportunity?

Score: D. Although other free services are creating value on Skype's back.

In Six Months? D expect little change.
Investors & Peers: As a developer can you sit at the table? Do you coexist like eBay resellers, integrated into the financial ecosystem? Is Skype a positive facilitator or are their always barriers? Are investors willing to put money in? Who bankrolls the opportunity? Are business cases relatively easy? Do you travel first class or coach?

Score: F:

In Six Months? D at best on current trajectory.

My conclusion.

Now many will say I am very harsh. You are probably right. Most developers would say "Skype is doing their best." "They are a young company." "They basically get it." What developers want is more access and functionality in the API. Communication is a big deal. They also don't want to be screwed by changing Skype road map. I gave the highest score to the API. Without it the only developers interested in Skype would be those applying for a job.

I thought long and hard about posting this blogpost. I did ask other Skype developers. I'm convinced now it has to be said. So this post is more directed to my friends (please don't shoot the messenger) at Skype. It may not be encouraging to get a "negative report card." Still that traces more to a poor attendance record (lack of people) for some of these "streams." Overall the API and developer focus can't afford to be tactical. For example, they focus on what to expose (e.g. voice messaging) rather than on broader strategic issues like how do independent developers make money, create collective value for users. etc. Perhaps thinking more broadly will enable the "score" to change rapidly.

So what score would you give to Skype's Developer Programs? Am I being too harsh? Do you want more systematic metrics? Let me know!

What's Your Presence Strategy? Stuart Henshall's address to the Ecademy

Phil Wolff on June 18, 2005 07:03 PM

Streaming video of Stuart Henshall's talk before the London Ecademy (Windows Media Player) about presence, networks, and more. via cherryleaf's blog.

Rumor Mill on Yahoo & Skype

Stuart Henshall on June 10, 2005 07:01 AM

How much value is there to rumors? Will Skype get sold to Yahoo? Who benefits? Skype probably benefits from rumors like this. Perhaps even Yahoo does. I wonder what the impact is on Yahoo shares today? (YHOO)

My perspective is it is way too early for Skype to move. The brand Yahoo adds nothing to Skype and potentially hampers long term Skype strategy. Yahoo sees the world from a Portal and desktop point of view. By contrast Skype is working toward the mobile market. Yes, potentially complementary. Would Yahoo leave Skype alone?

Perhaps the most interesting market for a business deal would be Japan. There Yahoo and Skype could find some consumer synergies around Yahoo's broadband offer. LiveDoor has also been successful. The real prize will be around the social networking aspects and real-time calling. I don't think Skype has the tech done yet to announce such a deal. Still, in the East they don't have the same hangups about ID's and aliases. Thus if there is to be a rumor... forget Yahoo! USA and look to where Skype has made interesting inroads. Asia is the place to look!

It might be too soon for Skype to be cashing out, and I am not sure if Yahoo can justify the big ticket valuation that would be slapped on Skype. There maybe a revenue share deal in the offering! That would make my recent post on Skype, more relevant. Om Malik

The rumor started here, went here, and is now here. I still see few benefits for Skype in this. Then I've missed the picture before.

Skypenet and online reputation systems

Phil Wolff on June 2, 2005 10:10 AM

I was in the middle of some great General Tsou's chicken and the final battle in The Last Samurai when the phone rang. I paused the movie, swallowed and answered. It was a fundraiser for the wrong cause at the wrong time.

I wanted to be able to vote "thumbs down" on the caller, to affect their reputation, to reflect my frustration at their interrupting my breakfast (yes, breakfast).

Like other social networks, Skypenet users can benefit from an online reputation system. In the before, during and after Skype moments, you want to avail yourself of a caller's reputation.

As part of a Skypenet enhanced caller ID, you want to screen potential callers. Screen using a bozo filter and white lists; for authentication (this is the real Michael Jordan calling); and for contextual screening (this call is for business vs. social vs. activism vs...).
During a conversation you want to assess trustworthyness by context, for example I might trust you to sell me a collectible BB gun (an eBay rating) but not to watch my kids.
As part of hanging up, I might want to give feedback to the caller, the caller's employer, the caller's professional network, et al; voting as closure.

Like on eBay, your reputation becomes an asset worthy of defending, so socially normed behavior follows.

As we become concerned about SPIT and telemarketing, reputation systems may play an important part and be a clear business model.

Questions:

Whose existing reputation systems do you trust?
What new ones would you like to see?
Which social norms for communication cross cultural borders?
And which don't?
Does Skype fail to meet or support cultural norms for telephony? How?