Business Week: The Great Firewall of China:

Skype had a dilemma. The Internet telephony and messaging service wanted to enter China with TOM Online (TOMO), a Beijing company controlled by Hong Kong billionaire Li Ka-shing. Li's people told their Skype Technologies (EBAY) partners that, to avoid problems with the Chinese leadership, they needed filters to screen out words in text messages deemed offensive by Beijing. No filtering, no service.

At first Skype executives resisted, says a source familiar with the venture. But after it became clear that Skype had no choice, the company relented: TOM and Skype now filter phrases such as "Falun Gong" and "Dalai Lama." Neither company would comment on the record.

Hmmm....

1. Is the filter list embedded in Skype's source for TOM? Or updated via download? Does anyone have the url for the list?
2. Is the filtering happening in the client? Or are the TOM Skype clients passing through an IM proxy service that filters the text?
3. Does this mean that Skype ceases to be a p2p client if one of the parties is operating behind the GreatFirewall?
4. Does Skype filter voice as well as text?
5. Does Skype offer governments the option to be a hidden party to any voice or video Skype call? Or just to those downloaded from TOM?
6. Does the TOM Skype filtering engine inform the Chines agency of its specific actions and identify the speakers?
   "All that is necessary for the triumph of evil is that good men do nothing." (Edmund Burke)
7. Will Skype lockout specific accounts from the Skype network if asked by a government authority? Does it have to be a national security authority or will Skype respond to requests by regional and local police or civil authorities? How about divorce courts?
8. The United States (a big market too and a target for Skype growth in 2006) National Security Agency wants the power to eavesdrop on Skype conversations too. Will Skype give them access too?

• UAE Etilisat moving forward with Skype call blocking. (GulfNews via BlogRamble)
• Skype Bug allows you to listen to music. (Sermonade) My WinAmp on your speakers.
• Sony to put Instant Video Everywhere on their Vaios. VoIP/Video softphone has multichat video.
• The reason webcams need blinders. (User Friendly)
• Skype rivals: Monster Communicator, JSkype, vBuzzer. Anyone try these Skype rivals?
• The GestureBank, a service of the Attention Economy (Steve Gillmor)
• Advice for working through a bad situation. (Mena Trott) Hard earned truths.
  1. Read what your customers have to say
  2. Ignore the tone of nasty complaints, but pay attention to the underlying messages
  3. Understand that the people giving feedback represent many who remain silent
  4. Don’t spend too much energy on distractions
  5. Don't be afraid to communicate
  6. Trust your customers
• At Traditional Phone Companies, Jobs May Not Last a Lifetime (New York Times). They blame fiber!
• 45k new Chinese Skypers daily. Skype may launch translation service in 2006. (Time Magazine)

Richard Zhao Liang and Bill Campbell.

Although the worldwide VoIP market is booming and Skype has wooed millions of users, its road to China is not so bright as in other parts of the world, especially for revenue.
There are four kinds of VoIP services: phone to phone, phone to PC, PC to phone, PC to PC. In China, the phone to phone and phone to PC are clearly defined in law as the basic telecom services that no one besides these six services providers can provide: China Mobile, China Telecom, China Netcom, China Unicom, China Railcom, and China Satellite Com.).

The Ministry of Information Industry (MII), according to the notification no. 413(2005) on July 18, will continue to ban commercial PC-phone VoIP services, except for a trial at four cities countrywide: two for China Telecom at South China (Shenzhen and ShangRao, Jiangxi Province), while two for China Netcom at North China (Changchun, Jilin Province and Tai’an, Shandong Province). During the service trial by Shenzhen Telecom (a subsidiary company of China Telecom), the price of VoIP phone is about 2.5 cents (US) for both domestic and international calls.

A joint venture with TOM Software will not help Skype generate revenue in China. Skype would require a joint-venture with China Telecom or China Netcom. But without clear commercial benefits to those two fixed line carriers such a joint venture is unlikely to occur.

Skype’s only source of revenue from mainland China will only be from SkypeIn and SkypeOut originating from outside of China. And none of that revenue will flow to Skype’s Partner TOM Software. So the marketing approaches shown below might be suitable for Skype into China:

First, continuously fight for an increasing market share at IM and PC to PC market, competing against QQ, MSN, YIM, Google Talk, Sina UC, and NetEase PP.
Second, cooperate with those smartphone/handset/pda hardware vendors for solutions like USB-plugable PC phones.

Skype’s competitive advantages come from its voice quality, encryption, and ease of use.

See original post here.

Skype and TOM Online announced an exclusive joint venture (51% TOM Online, 49% Skype) to "further cement their strategic partnership in China's rapidly growing online communication market." Hutchison Whampoa Ltd. owns TOM Online.

The deal is for "simplified Chinese" which seems code for "not-Taiwan." Executives have not been named. Neither company responded to questions about which personnel will leave TOM or Skype for the new firm.

Hutchison Global Communications works with Skype as a distribution partner in Hong Kong, facing customers through the "HGC-Skype" portal. TOM and Skype do the same thing for China.

Li Ka-shing owns TOM Online and Hutchison Wampoa. He is a 75 year old Hong Kong billionaire (Net Worth: $12.4 bil), number 19 on the Forbes list of the 400 richest people in the world in 2004.

In Skype Journal:

• Skype’s new Portal Plays..., where Skype actually modifies their software to include a browser that links to TOM-Online properties.
• China keeps VoIP Illegal despite various Chinese companies' projects.

The Skype and TOM Online news releases...

From Skype...

TOM ONLINE, SKYPE ANNOUNCE JOINT VENTURE IN CHINA

Skype's First Joint Venture Demonstrates Commitment to China’s Fast-Growing Market

(Beijing, China & Luxembourg, September 5, 2005) - TOM Online Inc. (Nasdaq: TOMO; Hong Kong GEM: 8282), China's leading wireless Internet company, and Skype, the pioneering Global Internet Communications Company which makes it possible for anyone with an Internet connection to make free high-quality phone calls to anyone in the world, today announced they have signed an agreement to establish an exclusive joint venture to further cement their strategic partnership in China's rapidly growing online communication market.

Working together will allow an even deeper level of integration between Skype's award winning software and services with TOM Online's over 70 million wireless Internet users. The joint venture will leverage TOM Online's mobile and Skype's Internet communications expertise to further develop advanced communication and community features for mobile Internet platforms.

Skype and Tom Online launched their relationship in November, 2004 with a customised, simplified Chinese version of Skype, which was co-developed by the companies. The co-branded software has already attracted over 2.5 million registered users. The latest simplified Chinese Skype version incorporates a TOM Online tab, which makes TOM Online's leading wireless products and the contents of its popular media portal directly accessible from within the Skype experience. China is one of Skype's top three markets.

The joint venture holding structure will be 51% and 49% by TOM Online and Skype, respectively. Under the agreement, this joint venture company will develop, customise and distribute simplified Chinese version of Skype software and premium services to Internet users and service providers in China.

"Tom Online have already been a wonderful partner to Skype and we're delighted to now take our relationship to the next level through the formation of this joint venture. By uniting Skype's market-leading global Internet communications platform with TOM Online's wireless leadership and understanding of the needs of the Chinese market we believe we have a powerful mix of skills in place to bring the Skype experience to millions of Chinese consumers." said Niklas Zennström, Chief Executive Officer and Co-Founder of Skype. "We expect this relationship to accelerate broadband penetratation, already growing quickly in China."

"In less than a year since beginning our cooperation with Skype, we have seen robust growth in user numbers. It indicates Chinese Internet users' readiness to take advantage of the latest communication technologies available." said Wang Lei Lei, Chief Executive Officer and an Executive Director of TOM Online. "The signing of this joint venture agreement is a testament to both companies' confidence in the tremendous business potential of the joint venture, given Skype's unrivalled technology strength and TOM Online's unique knowledge of China's market."

China is the world's largest mobile phone market by users, with more than 360 million subscribers at the end of June, 2005. Its numbers of Internet users are expected to grow to approximately 154 million by 2007, representing a compound annual growth rate of 18% since 2003, according to technology consultancy IDC. In addition, the demand for broadband grew by more than 140% to almost 43 million users in January 2005 from a year earlier. With the convergence of mobile and Internet technologies, Skype and Tom Online's joint venture is uniquely positioned to capture the growth opportunities in China's substantial communications market, which was RMB 572.6 billion (or about US$70.8 billion) for the year 2004, according to government statistics.

Terms of the deal were not disclosed.

About Skype Technologies S.A.

Skype, the Global Internet Communications Company(TM), 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 155 million times in 225 countries and territories. Over 52 million people registered to use Skype's free services, with over 3 million simultaneous users. Skype has more than 2 million premium customers, with over 12 billion minutes served. Skype Technologies S.A. is headquartered in Luxembourg and is growing its offices in London and Tallinn. Skype Technologies is privately held and backed by top tier international venture capital firms, including Bessemer Venture Partners, Draper Fisher Jurvetson, Index Ventures, and Mangrove Capital Partners. www.skype.com

Monday September 5, 4:59 PM

PRESS RELEASE: TOM Online, Skype Announce Joint Venture In China

TOM Online, Skype Announce Joint Venture In China

BEIJING, China and LUXEMBOURG, Sept. 5 /Xinhua-PRNewswire/ -- TOM Online
Inc. (Nasdaq: TOMO; Hong Kong GEM: 8282), China's leading wireless Internet
company, and Skype, the pioneering global Internet communications company
which makes it possible for anyone with an Internet connection to make free
high-quality phone calls to anyone in the world, today announced they have
signed an agreement to establish a joint venture to further cement their
strategic partnership in China's rapidly growing online communication market.

Working together will allow an even deeper level of integration between
Skype's award winning software and services with TOM Online's over 70 mn
wireless Internet users. The joint venture will leverage TOM Online's mobile
and Skype's Internet communications expertise to further develop advanced
communication and community features for mobile Internet platforms.

Skype and Tom Online launched their relationship in November 2004 with a
customised simplified Chinese version of Skype, which was co-developed by the
companies. The co-branded software has attracted about 3.4 million registered
users to date, making China one of Skype's top three markets. The latest
version incorporates a TOM Online tab, which makes TOM Online's leading
wireless products and the contents of its popular media portal directly
accessible from within the Skype experience.

The joint venture holding structure will be 51% and 49% by TOM Online and
Skype, respectively. Under the agreement, this joint venture company will
develop, customise and distribute a simplified Chinese version of the Skype
software and premium services to Internet users and service providers in
China.

"Tom Online have already been a wonderful partner to Skype and we're
delighted to now take our relationship to the next level through the formation
of this joint venture. By uniting Skype's market-leading global Internet
communications platform with TOM Online's wireless leadership and
understanding of the needs of Chinese market we believe we have a powerful mix
of skills in place to bring the Skype experience to millions of Internet
users," said Niklas Zennstrom, Chief Executive Officer and Co-Founder of
Skype.

"In less than a year since beginning our cooperation with Skype, we have
seen robust growth in user numbers. It indicates Chinese Internet users'
readiness to take advantage of the latest communication technologies
available," said Wang Lei Lei, Chief Executive Officer and an Executive
Director of TOM Online. "The signing of this joint venture agreement is a
testament to both companies' confidence in the tremendous business potential
of the joint venture, given Skype's unrivalled technology strength and TOM
Online's unique knowledge of China's market."

China is the world's largest mobile phone market by users with more than
360 million subscribers at the end of June, 2005. Its number of Internet users
is expected to grow to approximately 154 million by 2007, representing a
compound annual growth rate of 18% since 2003, according to technology
consultancy IDC. In addition, the demand for broadband grew by more than 140%
to almost 43 million users in January 2005 from a year earlier. With the
convergence of mobile and Internet technologies, Skype and Tom Online's joint
venture is uniquely positioned to drive even more broadband uptake and capture
the growth opportunities in China's substantial communications market, which
was valued at RMB 572.6 billion (or about US$70.8 billion) for the year 2004,
according to government statistics. Terms of the deal were not disclosed.

About Skype Technologies S.A.

Skype, the Global Internet Communications Company(TM), 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 155 million times in 225
countries and territories. Over 52 million people registered to use Skype's
free services, with over 3 million simultaneous users. Skype has more than 2
million premium customers, with over 12 billion minutes served. Skype
Technologies S.A. is headquartered in Luxembourg and is growing its offices in
London and Tallinn. Skype Technologies is privately held and backed by top
tier international venture capital firms, including Bessemer Venture Partners,
Draper Fisher Jurvetson, Index Ventures, and Mangrove Capital Partners.
http://www.skype.com .

About TOM Online Inc.

TOM Online Inc. (Nasdaq: TOMO; HK GEM stock code: 8282) is a leading
wireless Internet company in China providing value-added multimedia products
and services. A premier online brand in China targeting the young and trendy
demographic, the company's primary business activities include wireless
internet services and online advertising. The company offers an array of
products such as SMS, MMS, WAP, wireless interactive voice response services,
content channels, search and classified information, free and fee-based
advanced email and online games. As of June 30, 2005, TOM Online is the only
portal in China that enjoyed a top three ranking in every wireless internet
service segment.

TOM Online is a subsidiary of TOM Group Limited ("TOM Group"), one of the
leading Chinese language media groups in the Greater China region. TOM
Group's diverse operations span five media sectors: the Internet (through TOM
Online Inc.), outdoor (through TOM Outdoor Media Group), publishing, sports
and TV & entertainment.

Forward Looking Statement

The Press Release of TOM Online Inc. (the "Company"), constituting
Exhibits 1.1 [and 1.2] to this Form 6-K, contain statements that may be viewed
as "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Such forward-looking statements are, by their
nature, subject to significant risks and uncertainties that may cause the
actual performance, financial condition or results of operations of the
Company to be materially different from any future performance, financial
condition or results of operations implied by such forward-looking statements.
Such forward looking statements include, without limitation, statements that
are not historical fact relating to the financial performance and business
operations of the Company, the continued growth of the telecommunications
industry in China, the expected benefit of any strategic alliances with other
companies and our ability to cooperate with our alliance partners, the
development of the regulatory environment and the Company's latest product
offerings, and the Company's ability to successfully execute its business
strategies and plans, including its ability to expand its market share and
revenue through strategic alliances.

Such forward-looking statements reflect the current views of the Company
with respect to future events and are not a guarantee of future performance.
Actual results may differ materially from information contained in the
forward-looking statements as a result of a number of factors, including,
without limitation, any changes in our relationships with telecommunication
operators in China, the effect of competition on the demand for the price of
our services, changes in customer demand and usage preference for our products
and services, changes in the regulatory policies of the Ministry of
Information Industry and other relevant government authorities, any changes in
telecommunications and related technology and applications based on such
technology, and changes in political, economic, legal and social conditions in
China, including the Chinese government's policies with respect to economic
growth, foreign exchange, foreign investment and entry by foreign companies
into China's telecommunications market. lease also see the "Item 3 - Key
Information - Risk Factors" section of the Company's Annual Report for the
Fiscal Year ended December 31, 2004 on Form 20-F (File No. 000-50631), as
filed with the Securities and Exchange Commission.

"Since July, the 27th Skype Global Rate will also cover Poland, China, Greece, Taiwan, Hong-Kong and Switzerland. Other prices are also being lowered, although not to the SkypeOut Global Rate, in the Czech Republic (mobiles), Bulgaria, Slovakia, Croatia and Finland."

"27th July is the first anniversary of SkypeOut. This is a reason to lower the price to 0.017 Euro per minute."

This is my rough translation of news from Dziennik Internautów, Internauts Daily, reported to Skype Journal by Tomasz Tybulewicz, Gdansk, Poland: "Since tomorrow evening SkypeOut users will be able to make cheaper calls to Poland. Poland will be covered by SkypeOut global rate at last. Prices to Polish mobiles also will be a little lowered."

From China Tech News:

China's Ministry of Information Industry (MII) reiterated that it still has not formulated guidelines concerning VoIP businesses and that many current VoIP businesses could potentially be illegal.

Companies like Netease (NTES), Tom Online (TOMO), Skype, and Tencent have all started VoIP services in China. And the 263 Group and HL95 have also recently entered the sector.

The VoIP sector offers great financial rewards for companies because voice communications on the network can be as much as ten times cheaper than traditional fixed-line phones.

MII says that it is still testing VoIP and forbids illegal "phone cafes" from opening in China. It also offered no clear date on when it will issue guidelines for businesses to operate legally.