Yahoo's new Messenger head talks about where they are going. Best quotable quote. There are more people in the US still using rotary dial phones than there are Vonage customers.

(Note, this was recorded on my iPod with iTalk, it is not meant to be IT Conversations. In a few weeks I'm sure many of these will be available there)

Microsoft demoed Windows Live Messenger (WLM) beta on the show floor. (Snapshots coming soon.) Better looking than MSN Messenger 7.5 (lots of cutesy user interface removed, panes better organized) but it's a small point. One rep claimed the Messenger Beta is better than Skype because:

• audio quality ("we played with the codecs"),
  
• integration of identity and contacts across the Live family (hotmail/live mail),
  
• third party apps delivered through the system, and
  
• having more users (about 200 million) than anyone else.

The team seems to treat Messenger as a walled garden, like US mobile carriers. The product is closed except to partners who pay for the privelege or who have something specific the Messenger team wants. For example, they were bragging about two handset partners who'd come aboard, but WLM doesn't publish an SDK (software development kit). So the hundreds of handset manufacturers here at CES can't tightly integrate their products with WLM. Like carriers, WLM sells advertising right in the user interface, polluting with distractions what for many is their dominant communication tool, and with no way to turn them off. Even the exclusive software developers allowed inside the garden walls cannot build telephony plug-ins at all. This is far from being a strategic communications platform that others can build on.

I have to agree with him about the convenience and power of a common Passport/Live identity. The convenience of single sign-on is a great draw. And having more people in your ID cloud and in connected clouds (like Yahoo!'s someday soon) builds critical mass. It is unclear, by the way, if the IM interop agreement with Yahoo! extends to voice.

Someone in the crowd pressed him on the number of users, asking specifics on the number of active voice/telephony users. He didn't know. I suspect, given the low emphasis of voice in past UIs, there is an infinitessimal but quickly growing body of MSN voice regulars. Helping the average MSN user become multimodal (text to voice) will be a challenge as steep as Skype's (voice to video).

Two other points: Windows Live Messenger voice calls will not support voice conferencing. And users must cut a deal with MCI for call-out services. Both put Microsoft at a disadvantage vs. Skype.

But I'm not worried for Microsoft. Most Microsoft products take years of iteration to mature, and their move to thrice yearly release cycles will help Microsoft overcome these weakness. Their platforming tradition may prevail over short-term walled garden opportunities. What's more, the power of incumbency is real, as is their willingness to explore new ideas. Skype's race for users, features, and new ideas is still a very high stakes game.

See also: the blog, the product page, the faq.

Skype’s problem now is maintaining growth. The second challenge is to get Skypers to adopt premium services and think about dropping their home phone. There are many barriers to this. The PC must be always on. There is currently no embedded Skype device. People just don't want to lose their numbers. Free local calling may apply and be an advantage, as is 911. Many early adopters that have Skype have not yet added SkypeIn (lack of numbers availability) or SkypeOut, as they aren’t making either enough calls, or they are making them on another service.

Let’s consider what a Skype partnership with PhoneGnome would enable:

1. Home Phone numbers to be associated with Skype accounts. Thus every PhoneGnome activated with a Skype Account would 1) ring when the home phone rings (anywhere!) and 2) provide cheap SkypeOut rates when dialing out of your local calling area with the home phone. Thus more integrated than doing what I now do. Which is run SoftGnome and Skype concurrently.

2. Backup/Skype solution for when a computer is not operating. All Skype calls would ring the home phone. This is no different that Skype’s call forwarding option that is offered now. However the ring for this service would be free. Device availability could be communicated as well.

3. It would substitute SkypeOut for creating an agreement with another ITSP. It would also enable dial by number for all Skypers who also have PhoneGnome. This would result in many more SkypeOut minutes being used.

4. New service opportunities for the family are opened up. Currently SkypeIn numbers appeal to a small audience. Eg a business line, or access in other countries. Create a SkypeGnome strategy and the opportunity for additional services that cater to each member is increased. Eg one home line, four extensions. Voice Mail on Skype etc.

From my perspective it’s easy. It’s also easy to test. Probably easier for Yahoo who’s IM platform is more SIP centric than Skype's. People don’t like changing their phone numbers. It’s a pain. PhoneGnome reduces the barrier and requires no permission from the current operator or regulators. That’s a strategic advantage.

Is a little competition still a good thing?

Both Microsoft and Yahoo are deploying dial-out services in their Messenger clients. How do you compete when it comes to call termination? Four points:

1. Rates (converging to flat and free)
2. Reach (going worldwide)
3. Quality (expectations raised by GIPS audio quality)
4. Everything else

It's the everything else that'll matter. Bundling, niching, creative use of call metadata, convenience, caller ID pass through; they and the rest are secondary to making your softphone start up with Windows and be the conversation tool of choice.

Susan Mernit

"One of the ways Yahoo can compete with Google, IMHO, isn't to try to match then in product sets and feature to feature upgrades but to figure out what they can do differently--and do it amazingly well--and integration of tools across media and life management platforms seems like one smart way to go in this regard."

Q. Did the Microsoft-Yahoo IM interoperability agreement include voice calls?

Planck, Henshall, Shapiro, Udell, Hammersley

14 December - Quantum Physics Day. "-- the anniversary of the day in 1901 that Max Planck created the concept -- and the word -- of "quanta" and launched the revolution that has taken over the world." We've all been waiting for Heisenberg ring tones: they tell you who is calling or when, but not both.

Stuart Henshall Resurfaces (Stowe Boyd)

How Skype might help bring Network Neutrality (Mitch Shapiro via Isen. Can you blame poor Skype call quality on your ISP or other pipe-owners? If so, grounds for a consumer fight for customer choice, competition, and for no-filtering rules. David Isenberg: "We can do our part by expressing our outrage when they're outrageous. Early. And often."

Jon Udell appeals for unification of voice and data channels. (InfoWorld) Amen, Jon.

HorsePigCow restates The Madenning Octet, 8 truths driving today's changing Internet:

1. Information wants to be free
2. Zero distance
3. Mass amateurisation
4. More is much more
5. True names
6. Viral behaviour
7. Everything is personal
8. Ubiquitouos computer

This is what is going to disrupt everything you hold dear in the years to come....work with it or perish...

The Enemy (you know who you are)

1. Copyright
2. Borders
3. Censorship
4. Network blocking
5. Identity cards and databases
6. More network blocking
7. Everything is trackable
8. No privacy

(I would add that anybody unwilling to change or open up or collaborate will perish as well)

From the brilliant Ben Hammersley

Syndication, Structured blogging, and the Adaptive Blogosphere

One of the two new ideas in syndication this year: SSE, making RSS bidirectional so you can post back to an RSS publisher. The other, structured blogging, lets you add forms to blog posts and to news readers. Structured blogging is something I wrote a lot about starting three years ago on my a klog apart blog and as proposals to the first Atom specifications for Semantic Component Blogging leading to an Adaptive Blogosphere where your newsreader learns new form types from feeds, and then trains your blogging tools to support those forms, so your blogging tools become smarter over time and the blogosphere shares more structured data. See also: about my liver's weblog.

Would you like to animate your Skype profile? Reallusion has launched CrazyTalk for Skype which enables messaging with facial expressions and character animation. Thus they say making your Skype conversation more amusing and creative. Your friends will have to get CrazyTalk for Skype too to play. It's a free download to get started.

CrazyTalk for Skype is a dynamic animated messaging tool featuring customizable emotive facial animation allowing you to create Skype characters from any photo! It is much more fun than conventional video chatting. Animate Skype with loads of content you can download from the web or create yourself with CrazyTalk Avatar Editor. Share them with your friends whenever you like, using whatever photo you like, animated however you like – to become the face of whoever or whatever you want to be! Reallusion

Overall, this is another smart piece of piggyback marketing on Skype. It creates new value for Skypers interested in having some fun while introducing the "Skype" community to the oppportunities and benefits in animation. To create your own photo animations you will have to trial or purchase CrazyTalk Messenger. More than a few Skypers should know how to use it and get others laughing. Reallusion is offering a "free" CrazyTalk Messenger so you can animate your own photo's in a promotion they are running. Share with your friends and win.

I know some of my readers will ask why would you do this? I really don't have the time. However I can see an animated character taking a voice mail, or providing some other form of info as just a beginning. For the most part the solutions will just be more fun than that. When Skype adds video (real soon) then even more opportunities for sending animated movies may appear.

Reallusion has effectively created an avatar-like program for Skype that goes beyond what's offered on MSN and Yahoo. I'm sure their technology could be worked into anyone of these messenger programs and perhaps that is what they hope to achieve. For the moment Skype's API wins again in leading the way.

Noticed in Tesco that the mobile phone rack has shrunk in half for the Xmas season, with digicams filling the space instead. Tesco, as one of the world’s most astute and profitable retailers, generally gets these things right. Which tells us that for all the hype, “convergence” isn’t automatically a given, and when it happens it can be slow. Also doesn’t bode well for mobile as as a hot Xmas item — can you spell “saturated”?

But what’s really interesting is this. There are no 3G phones. Zero. Tesco is unable to articulate a value story in 3G for the everyday UK mobile customer. There’s no benefit to 3G that the consumate marketers at Tesco are able to spin that justifies any premium price or shelf space!

Doesn’t the inability of Tesco to stock and market 3G call into question, just a teeny bit, the strategic nous of those leading the industry to the world of IMS (a.k.a “3G mk 2”)? Actually, it reminds me a bit of yesterday’s post. Note that the O2 tagline is “Internet at the touch of a button”, when it’s anything but! As is the telco way, they’re conflating a service (Web) with connectivity (Internet). If it really was Internet at the touch of a button (any why bother with the button?) we’d all have a superior voice and messaging experience on O2 devices courtesy of Skype, MSN, Yahoo et al. Now that would be something to crow about.

PS - Note to US readers. Tesco is broadly the equivalent of Target, although the focus is more on food in most stores, and the quality of the food is a bit higher than the often mediocre efforts in the US supermarket sector.

via Telepocalypse

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.

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.

It's intriguing that an IM product that's had a voice component for years must launch a new version "with voice" and yet that is the message that Yahoo is promoting with the release of Yahoo Messenger 7.0 for Windows. As I reported on the beta version it's a big step forward and it does add real utility to Yahoo. Will it hold the tide of IM users flocking to Skype? Maybe. Is it enough to turn the tide? No not yet. Still it makes the Yahoo client much more sticky. Plus Yahoo has some integration options with e-mail and mobile IM that keep it attractive.

Two things Yahoo is really promoting in this release.

1. Free worldwide PC to PC calls. You can also buy a phone card although the integration could be better. Voice now works, often better than using the phone, however it's not well integrated, retaining a bolted on rather than built in feel. Example - the VM voice mail notification (you have to have "messenger" "show/hide" "seach bar") for it to be visible. The voice archives are difficult to find without this. There is no "events" notification. I can't identify how a YahooIn call (Future) would be handled, or how caller ID would be presented in the future. The downside of these additions is a lack of control over whether anyone can call or start a chat etc.
2. Photo Sharing: On the plus side Yahoo has enhanced how pictures can be shared. It's another integration. The more I think about it the more I'd like to see it in the actual client, Slide shows should be possible

Emoticons: Yahoo adds some new ones. They are nicely done.

Things I haven't checked but am curious about.

• Is dialup performance better than Skype? How's the voice quality stack up. Yahoo has many more dialup users.
  
• What will the impact on Yahoo chatrooms be? Will better voice change dynamics? Note the beta and previous versions weren't voice compatible.

Overall

Skype still has quite a lead. From recent reviews of new clients Jajah, Gizmo, Wavigo, Voipbuster, all these are lacking what makes for an easy-to-use telephone replacement. In Yahoo's case they have the resources and capabilities to blow Skype out of the water. Still it's only going to happen if they get the basics right and open up to the developer community. That's key if Yahoo is to get linked to the next generation of hardware devices now being released. Otherwise Yahoo could find themselves locked out of the future because they are not compatible with these upcoming products.