Skype News « Skype Journal

Happy 8th Birthday, Skype! Many happy returns.

Phil Wolff 29 August 2011 10:32 am

Wow, It’s been eight years since Skype launched. 2003 to 2011. I’ve been writing about Skype on my own blogs or on Skype Journal from the start. SJ alum Jim Courtney salutes Skype today and Skype pats itself on the back.

Looking back…

The company has been bought and sold, and sold, and sold. And soon to be sold again.

The founders were in, kicked out, then held key technology for ransom to get back on the board for their big payout from Microsoft.

Skype averaged a new leader a year.

Skype disrupted international telephone companies, displacing billions of dollars of hard currency with free or very cheap services. Their success has them banned in some countries and declared “an enemy of the state” in others. Didn’t stop them from partnerships with mobile operators from Hong Kong to Italy.

Roughly half the Internet has tried Skype on a personal computer, a mobile phone, or in a device. Skype isn’t ubiquitous but its brand is. And Skype continues to grow.

Why? What does the future hold?

As for why Skype’s been successful…

Skype’s timing was great, several times. Just in time for broadband to make consumer VoIP practical for millions. A few years’ later, just in time for a lift by eBay’s brand (did you know Skype was an eBay company for half its life?), Skype was able to hire GIPS expats and ready itself for the webcam explosion. And when the world economy imploded in 2008, Skype was a large enough network that people turned to video calling as an alternative to travel (airlines hate Skype).

Skype partnered intensely. If you could bring a million new users to Skype, Skype cut a deal. Large national web portals have Skype sub-sites, laptop manufacturers preinstall Skype on Windows, mobile operators install Skype on Android phones, and you can find Skype on TVs and soon on game stations.

Skype focused on customer acquisition. During its eBay years, Skype pursued new users at the expense of product innovation.

Skype gets the viral business. It takes two to talk and Skype made sure you had every reason to drag your friends and family into the network. Skype keeps removing roadblocks to onramping and adding reasons to subscribe. This could be Skype’s first billion dollar year.

Skype delivered real value, consistently, affordably, to millions of people.

So, a few longer-term Skype predictions:

In 2011:

Microsoft will close the deal.

Skype will have more than 1000 employees.

Luxembourg will become Skype’s HQ in name only. Palo Alto is the new Luxembourg.

Microsoft Watch starts covering Skype closely.

In 2012:

Microsoft’s Skype division will absorb the Lync business unit.

Lync will be rebranded Skype.

Skype will launch its cloud products.

Skype will hit its Q1 peak of 35 million concurrent users, 220 million active users.

Victims sue Skype for not offering emergency dialing after a family dies.

Skype’s new cloud loses the US Presidential campaigns to Twilio, powering team and phonebanking apps.

A Skype toolbar and skinny-client comes with a new release of Internet Explorer.

Skype fuels LinkedIn chat.

Hackers reverse engineer Skype’s p2p network, make it public. Vulnerabilities and prior hacks exposed.

In 2013:

Skype for Mac catches up with Skype for Windows.

Skype for Windows Phone has cooler features than Skype for Mac.

Skype ships on the next Windows, in the next Office.

Skype becomes just one of thousands of products using in-browser WebRTC for calls, presence and IM.

SkypeKit becomes a standard component of Windows.

Skype kills the former Lync product family as PSTN hardware sales drop sharply. Lync becomes a Sharepoint feature, phone stations are all mobile, tablet or PCs.

Skype works with with Windows Live Messenger IM and voice.

In 2014:

Skype will generate one quarter of its revenue through Microsoft internal customers. Bing ads, Xbox subscriptions, Office, Windows.

Leaks reveal Skype cooperated with law enforcement in a totalitarian regime to shut down resistance. Leaks prove false.

Facebook drops Skype as a partner, as their internal pendulum swings to owning.

The Vatican IT department picks Skype as its telecom standard.

Skype for Layar brings talk to augmented reality RayBans.

In 2015:

Skype will deliver one billion minutes of live talk through developers using its cloud platform services.

Skype will generate one quarter of its revenue from platform services.

Skype and Bing launch YouTube competitor.

Skype is banned on student tablets in 903 school districts as a distraction.

Half of all televisions come with Skype inside or in an attached box.

Mass exodus as pre-Microsoft Skype employees fully vest and leave.

In 2016:

Phone banks using Skype for Web prove decisive in Get Out The Vote campaigns.

Facial recognition plug-ins reveal micro expressions and give live commentary.

Stallone Skype’s fighting instructions to his son in Rocky Junior.

In 2017

Platform products deliver half of Skype’s revenue.

Tony Bates named as Ballmer’s successor.

Photo credit: 8th Birthday Cake by Jim Capaldi for Emily’s 8th Birthday Party.

Thanks for all the Skype.

financials | ipo | Microsoft | Skype | Skype News

Leaving early? You were warned. See slide 8

Phil Wolff 28 June 2011 2:36 pm

Skype – Employee Presentation

From the 2009 briefing to employees after the Skype Limited Partners (SLP) took over from eBay:

"Good Leaver": someone who gets fired without "Cause"

Gets the fair-market value of their currently vested option

“Bad Leaver”: someone who resigns, or is fired for “Cause”

Skype buys back their options at the lower of fair-market value or strike price

This provision lapses post-IPO

Monthly vesting after 1-year, not annual vesting (like the eBay RSUs)

Lesson: Hold onto your job. Grit teeth. Sweep floors. Whatever it takes, until the Microsoft deal is done.

Microsoft | Skype | Skype News | SkypeKit

Notes from the Microsoft and Skype press conference

Phil Wolff 10 May 2011 6:59 pm

Microsoft sees itself as offering empowerment and technology. And other buzzwords.

Communication tomorrow will be cooler than today. Reminds me of “I would gladly pay you Tuesday for a hamburger today.” Or “the future is already here, it’s just not evenly distributed.” And we’re selling the future if you can afford it.

What do you get when you buy a Skype today?

Skype’s core assets: technology and users, and ways to make money from technology and users.

Skype rides three trends:

Mobile is growing fast now (42%), mobile video is growing faster (104%), and mobile traffic is expected to grow 26 times in the next five years.

Video is not just about calling, although more than 40% of all Skype minutes involve video. Video is also about advertising.

Social sites are growing (44%), account for 13% of time online (at least in some countries), and communication is kinda the point of social experience.

Skype is doing well. 170 million “connected users.” 40% growth in users per year. 600K signups daily, a Redmond, Washington every two hours. People use Skype a lot. 207 billion minutes of talk in 2010, 30 million concurrent users.

Skype will be its own division with its own customers, staff and support for non-Microsoft devices and platforms.

Synergies…

Microsoft devices, thank you SkypeKit.
Skype for Microsoft’s communication networks and services (like Lync, Outlook, Xbox Live).
Skype in the workplace.
Skype keeps its brand.
Bring Windows Phone to Skype’s mobile operator friends.

Ballmer making synergy shadow puppets.

The deal came naturally during advertising partnership discussions in March and April. Executive “Welcome to Microsoft” road trips start today in California and continuing through Europe this weekend.

Odd thoughts…

Since Skype CEO Tony Bates now reports directly to Microsoft CEO Steve Ballmer, does that add him to the dozens of executives being groomed to succeed Balmer?

The investors are paid, early employees were paid when eBay bought Skype, and the recent slate of “pre-IPO” executives should be selling off decent stock and options. How about the hundreds of other employees at Skype? Are they getting, oh, a year’s salary bonus for staying on at Microsoft? Or are they getting boring, high-downside Microsoft stock options? Money is just one motivator but getting it right as Skype goes from startup to division could take some artistry.

Microsoft is buying Skype with non-US funds. Does this mean the division will continue to be headquartered in Luxembourg? Or can Skype HQ move to London, Palo Alto or Redmond?

We really don’t know the regulatory obstacles in Microsoft’s United States or Skype’s Europe. Are there privacy or antitrust considerations? Does Microsoft have limits on what it can own or operate in various jurisdictions? I hope to learn more.

Microsoft | Skype | Skype News | SkypeKit

Notes from the Microsoft and Skype press conference

Phil Wolff 10 May 2011 1:02 pm

Microsoft sees itself as offering empowerment and technology. And other buzzwords.

What do you get when you buy a Skype today?

Skype’s core assets: technology and users, and ways to make money from technology and users.

Skype rides three trends:

Mobile is growing fast now (42%), mobile video is growing faster (104%), and mobile traffic is expected to grow 26 times in the next five years.

Video is not just about calling, although more than 40% of all Skype minutes involve video. Video is also about advertising.

Social sites are growing (44%), account for 13% of time online (at least in some countries), and communication is kinda the point of social experience.

Skype will be its own division with its own customers, staff and support for non-Microsoft devices and platforms.

Synergies…

Microsoft devices, thank you SkypeKit.
Skype for Microsoft’s communication networks and services (like Lync, Outlook, Xbox Live).
Skype in the workplace.
Skype keeps its brand.
Bring Windows Phone to Skype’s mobile operator friends.

Balmer making synergy shadow puppets.

The deal came naturally during advertising partnership discussions in April. Executive “Welcome to Microsoft” road trips start today in California and continuing through Europe this weekend.

Odd thoughts…

Since Tony now reports directly to Steve Ballmer, does that put him in line to succeed Ballmer?

The investors are paid, early employees were paid when eBay bought Skype, and the recent slate of “pre-IPO” executives should have decent stock. How about the nearly thousand other employees at Skype? Are they getting, oh, a year’s salary bonus for staying on at Microsoft? Or are they getting boring, high-downside Microsoft stock options?

We really don’t know the regulatory obstacles in the Microsoft’s United States or Skype’s Europe. Are there privacy or antitrust considerations? Does Microsoft have limits on what it can own or operate in various jurisdictions? I hope to learn more.

Skype dial tone: 29.5 million users logged in at the same time

Phil Wolff 21 February 2011 12:30 pm

Checking just now, 29,527,474 accounts were connected to the Skype network. That will be close to today’s peak. That’s a lift of 12.8 million from 16.7 logged in last night. This suggests Skype is running at about 177 million active users. Skype’s dial tone is a measure of the value of the network to users; the ability to call and be called.

The last high-water-mark was 17 January 2011, with 28.2 million. That’s a 4.3% bump of 1.3 million in 35 days. This rate of growth seems to be seasonal, based on previous years. We should see growth slow to a crawl by April. Nevertheless, my prediction of reaching 30 million concurrent for this year seems awfully conservative.

Business | pricing | Skype | Skype News | video

Skype Group Video Calling Limits: 4h/call, 10h/day, 100h/month

Phil Wolff 9 February 2011 8:45 am

Group Video Calling Fair Usage Policy

Group video calls are subject to a fair usage limit of 100 hours per month with no more than 10 hours per day and a limit of 4 hours per individual video call. Once these limits have been reached, the video will switch off and the call will convert to an audio call.

© Skype – Last revised: October 2010

Details that matter.

Calendar days start at midnight GMT (Convenient only if you’re in London).
The hours represent the time a subscriber hosts a video call, to the nearest minute. You can be in a group video call but only one subscriber is hosting, typically the one initiating the call.
You can add time with an upgrade but not a downgrade. So you may extend a day pass with a month subscription, but you cannot get extra time within your month subscription by buying day passes.
You cannot have multiple subscriptions at the same time. So you cannot run through your 100 hours in two weeks then buy another 100 hours; you’ll have to wait until the next month. Similarly, you cannot buy two day passes at once; you’ll have to wait until the first one expires before buying the second.
Your subscription or pass starts from when you buy it. No obvious way at this point to “normalize” your subscription to a billing period of your choice.
The 10 hour per day limit is for a calendar day. So if you buy your one day pass at noon and start your group video call, you’ll run out of time at 10pm and must wait until midnight to start your next 10 hours.

Are these limits reasonable? Is this a lot of time? Sufficient?

For comparison, a forty-hour work week averages 167 hours in a month. 100 hours of GVC would be a half-time job, all meetings. I’m not sure why this limit. Conversely, men watch TV 2.8 hours daily, or about 84 hours monthly.

Seem like enough time for most people.

However these limits can hurt if video cutoffs interrupt…

Negotiating a peace treaty
The last stages of combat before leveling
Prepping for your final exams
Your wife is starting her tenth hour of labor
Virtual honeymoons (with a third or fourth or fifth person)
Your 2011 Oscar party (four hours, easy)

For workers who live on the phone or in meetings, it’s easy to imagine bumping into these limits.

Correction: Work month is closer to 167 than 220 (for most of us).

advertising | Business | marketing | Skype | Skype News

In-client Ads for Skype Premium Subscriptions now in US Markets

Phil Wolff 9 February 2011 7:05 am

Skype announced Skype Premium subscriptions at CES2011 last month. Ads are showing up inside Skype clients promoting the package.

The ads offer 33% off until month-end and 25% off an HD webcam. They cite group video calling and live chat customer support, both exclusive features of the Premium plan. Skype Premium’s logo is a modified “plus” symbol, tilted slightly left.

The plan comes in four durations: $4.99 day pass and $8.99 monthly subscription, three month and twelve month subscriptions. The 33% discount only applies to the $26.97 3-month and $107.88 12-month plans, bringing them to $18.07 and $72.28.

Business | people | Skype | Skype News

RIP Rajiv Dutta, former Skype President

Phil Wolff 1 February 2011 8:38 am

Rajiv Dutta was Skype’s President from September 2005 to June 2006, part of the eBay team that bought Skype from its founders and investors. He was the second of eight executives who led Skype.

With fellow former-Skype president Alex Kazim, provided technical services to the 2010 Meg Whitman for California Governor campaign.

He was on Elevation Partners’ investment team.

He died yesterday of colon cancer.

Sten Tamkivi writes “He was the kind of leader who actually knows the answers, but still takes the time to ask you the question so you can figure it out and make it happen. I never heard him raise his voice or force his opinion. I once failed to push my team to fix something in time that some other folks in the company thought is a dead end anyway – but I really wanted us to try. At some point Rajiv called me to do an ‘executive override’ to my decision – the first and last time I’ve heard that pair of words in my life – but even then came across with such clear and common sense, warmth and respect towards the engineers involved that just disarmed the tensions and even diametrical disagreements.”

There are moving comment threads on Fortune’s obit and the WSJ blog post, if you’d like to leave your thoughts.

I’ll update this post as people make observations about his year leading Skype.

Elsewhere:

One of Dutta’s longest professional relationships was with Meg Whitman. Here‘s a rare public "in conversation" between the two for the Drucker Institute, posted in March 2009.

Chat with me on Skype. Call me at +1-510-316-9773 (my mobile), follow on twitter @evanwolf (everything) and @SkypeJournal (just the posts). Visit our Skype Journal private technologist roundtable, one of the longest running public Skype chats, where we’re talking about this right now.

28.2 million Skype users online: record dial tone level

Phil Wolff 17 January 2011 2:55 pm

The number of Skype accounts concurrently logged in to the Skype network hit a new high of 28.2 million today, despite (because of?) this being a national holiday in the United States. Dial tone is a measure of Skype’s capacity: those logged in can use Skype’s services. More importantly, they increase the chances that someone you know is available IM or live voice or video chat.

The “Skype everywhere” product strategy makes this possible. Skypers are signed in from desktops and laptops where Skype is often preinstalled, mobile phones, and televisions.

Business | financials | Skype | Skype News | statistics

Skype grows to 20% of all international minutes called in 2010

Phil Wolff 11 January 2011 11:25 am

The big red line shows billions of minutes of phone calls made the traditional way: phone to phone over the pubic phone networks. 413 billion minutes this year. The big blue line shows Skype-to-Skype and SkypeOut calls, 102 billion minutes this year.

Big deal? No and yes. No, since nearly all regular calls are domestic. In the 99% range. So while this does affect international divisions of phone companies, they are usually pretty small parts of a national phone company’s sales. Skype users spend about half of all their time calling across national borders.

It’s a big deal anyway. On the chart, you see Skype calling grow faster and faster even as other calling grows slower and slower. The conservative trendlines show Skype beating 140 in 2011, and other telcos just 425, giving Skype 25% share by year end.

You could blame Skype, like the telcos do, for extreme price competition. Or give credit to Skype for a superior user experience with convenience and features telcos can’t match, like video and IM. All true. I also credit Skype’s great timing: see Skype’s growth grow faster starting in 2007 with the Great Recession. Everyone becomes more price and cash sensitive and Skype’s looks like a network worth using.

As glorious as this growth is, it’s just one small niche in the $trillion world telephony market. It shows Skype can compete. It also shows Skype is building a brand not seen often in the world of telecom: a truly global telephone company.

First picture of a Skype #MegaSuperNode

Phil Wolff 23 December 2010 2:06 pm

Skypelandic engineers turned ordinary blog and accounting servers into powerful superheroes, harnessing Cloud Power to restore conversation to peaceful Skypelandia. Rolf, one of the Mighty MegaSuperNodes, posed for this portrait.

For the best illustrations of how Skype’s nodes and supernodes work, see Dan York’s readable Understanding Today’s Skype Outage: Explaining Supernodes.

Thanks to Pixartica for the Skype chest icon, Marvel Comics for the toolkit, and Skype for the scenery.

17.5 million: Skype restored dial tone twice as fast as in the 2007 outage

Phil Wolff 23 December 2010 1:36 pm

I’m showing 17.5 million people on Skype in my Windows client. We’re approaching normal for Skype’s dial tone: basic IM, voice and video calling. One day would be nearly twice as fast as 2007’s outage recovery. Skype’s active forums and many other Skype.com services are back online, although logins are still being throttled.

Previous Skype Outage 2010 posts:

Are you back to normal? No, I meant with Skype! Chat with me on Skype (when it’s back up for you). Call me at +1-510-343-5664 (Google Voice), follow on twitter @SkypeJournal (just the posts) and @evanwolf (everything). Visit our Skype Journal private technologist roundtable, one of the longest running public Skype chats, where we’re talking about this right now.

news | outages | Skype | Skype News | TonyBates

First video message from Skype CEO Tony Bates

Phil Wolff 23 December 2010 1:01 pm

On YouTube and the Skype blog. Check out the hoodie.

Previous Skype Outage 2010 posts:

Business | marketing | outages | Skype | Skype News

Good Morning, Mr. Bates

Phil Wolff 23 December 2010 2:42 am

We don’t have any detailed communication from Skype following up on the original outage news as the Skype Outage of 2010 enters its second day. 12 hours without updates is forever. How hard is it to perform baseline crisis communication?

There was a golden opportunity, rapidly vanishing, to demonstrate competence and cool under fire.

Dispatch bloggers with video cameras to the engineers and have them explain progress every half hour. YouTube won’t crash under the load.
Have your consumer, mobile, business and platform GMs speak to their constituents every two hours, sharing customer stories about the outage and sharing how Skype is both listening and responding.
Blog and vlog updates in the top 20 languages.
Put the new CEO up front in shirt sleeves, talking to TV news teams from around the world.
Put up an engineer with a whiteboard to diagram how things work, how things broke and how Skype is fixing them. Repeat as needed.
Talk about Skype’s own outage pain of being a widely decentralized company that uses Skype intensely and extensively, and what it means to miss Skype during a crisis.
Capture customers stories in a YouTube channel.
Share third-party, non-Skype tools for talking right now beyond hoping vaguely for something to turn up (Miracle on 34th Street: Macy’s sending customers to competitor Gimbals).

Skype could have shown leadership in a time of fear, uncertainty, and doubt.

Skype had the chance to humanize itself.

Skype could have let customers see the hard working people behind the pretty brand working together and sacrificing family time during a holiday week.

Skype had the chance to educate about how the product works now, instead of how it used to work.

Skype could have shown how much people and workplaces depend on Skype.

Skype hasn’t.

Why? Why has Skype’s social media lead Peter Parkes been left holding the bag except for one brief BBC phone interview with Tony?

Silver Lake. The investors are afraid of blowing Skype’s acquisition or IPO. Lawyers impose company-wide silence orders, in keeping with SEC "quiet periods." Except their version of quiet is closer to silence.
Message Control Culture. Skype follows the 1950s marketing mantra of creating messages centrally and then delivering them through multiple channels to targeted audiences. To preserve message purity, Skype’s marketing communications team gags all employees. Speaking out of turn is a terminal offense. They loosen those gags after an employee takes media training, but even then they may only communicate in the presence of a PR minder. This is completely at odds with the way the mediasphere works. And it’s ineffective in a global enterprise.
Understaffing. Skype has spent a pittance on marketing communications. They are a global company with half a billion customers. Your execs need to be able to pick up the phone (since Skype is offline) and bring in hot teams to engage customers, innovate communication solutions, and coordinate round-the-clock responses in every major market.

Muzzles are not marketing. Certainly not in disaster communication.

Mr. Bates, give your people the order to speak up and tell customers what they need to know, the way that makes sense to them. The cost of silence is too steep. You’re in charge. Lead from the front.

How is the outage affecting your family? Your business? Chat with me on Skype (when it’s back up for you). Call me at +1-510-343-5664 (Google Voice), follow on twitter @SkypeJournal (just the posts) and @evanwolf (everything). Visit our Skype Journal private technologist roundtable, one of the longest running public Skype chats, where we’re talking about this right now.

outages | Skype | Skype News

Rise of the Mega-Supernodes! The Skype Network Outage of 2010

Phil Wolff 22 December 2010 2:10 pm

The Skype network crashed today and is on its way back up. Here’s what it looked like:

Why were 20 million people kicked off the Skype network? Too few supernodes in the wild to meet holiday demand. So Skype is deploying “Skype mega-supernodes” to fix the problem. More soon.

How did the outage affect you? Chat with me on Skype (when it’s back up for you and me). Call me at +1-510-343-5664 (Google Voice), follow on twitter @SkypeJournal (just the posts) and @evanwolf (everything). Visit our Skype Journal private technologist roundtable, one of the longest running public Skype chats.

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Skype Journal

Happy 8th Birthday, Skype! Many happy returns.

Leaving early? You were warned. See slide 8

Notes from the Microsoft and Skype press conference

Notes from the Microsoft and Skype press conference

Skype dial tone: 29.5 million users logged in at the same time

Skype Group Video Calling Limits: 4h/call, 10h/day, 100h/month

In-client Ads for Skype Premium Subscriptions now in US Markets

RIP Rajiv Dutta, former Skype President

28.2 million Skype users online: record dial tone level

Skype grows to 20% of all international minutes called in 2010

First picture of a Skype #MegaSuperNode

17.5 million: Skype restored dial tone twice as fast as in the 2007 outage

First video message from Skype CEO Tony Bates

Good Morning, Mr. Bates

Rise of the Mega-Supernodes! The Skype Network Outage of 2010

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