Over the past week I have been checking out some interesting new activities involving Skype video. I wrote about my experience with the Logitech HD Pro C920 and there are at least two more posts coming next week involving new experiences with Skype HD video calling.

Video calling has always had its own inhibitions and etiquette, especially when it comes to nervousness about being seen “live” for whatever self-conscious reason. Everyone has his/her own dress code in this regard.

But I’ve also learned that sometimes there are other social aspects to consider, especially when using Skype for TV. For instance, you have to be aware when others in the home may want to actually watch a TV program (is Skype for TV allowed during today’s Super Bowl in your home?). So you have to schedule Skyping on your TV appropriately. You probably want to think about the condition of the room from which you are calling; it’s probably not exactly a neat and tidy television news production studio.

But apparently there are other considerations also….

For developers planning to develop TV-based applications Skype lays out an entire etiquette under the topic “Design for TV: Skype on Your TV: A 6-Step Guide for Success” (you have to be a registered developer to see the entire guide):

What Makes TVs Different?

Despite recent advances, a television remains a primarily passive device—we watch it for extended periods of time rather than use it to converse, surf the Web, or run other software applications. And we rarely appreciate being interrupted when watching our favorite show!

Amber MacArthur, a Toronto-based social media guru (and author of the AmberMac test for Skype), is a frequent and long time user of Skype video, both for family calls and her participation on various video podcasts. Recently she was preparing to participate in an upcoming Fast Company show and received from her husband, Chris Dick (a video production expert), a list of things to remember when setting up for a web video conversation. She subsequently posted them in an extended Facebook post:

Here they are – please let me know if you have anything else to add to the list (I like #5 the best;):
1. Have a USB headset/microphone combination for maximum effect – failing that, use a pair of earbuds.
2. If you are using the on-board microphone, find a quieter location than a loud coffee shop or central office hub, both to minimize noise and possible colleague/passerby interference
3. If there is a large window or other light source, position yourself so YOU can look at it – rather than have it behind you, you don’t want to be backlit.
4. If you have an Ethernet connection for your Internet source please take advantage of it; wifi can occasionally be subject to drop outs
5. And lastly pop in a breath mint, you’d be surprised how advanced Skype is now

Certainly the first four are great tips and reflect my own experiences. However, imputing new features to Skype is an ongoing dialogue, especially for geeks. But this one has to amuse. Definitely not a new feature reported in the recent upgrades to Skype 5.8 for Windows and Skype 5.5 for Mac announced this past week.

Bottom Line: We’ll have to check out the SkypeKit developer information for the Halitosis API. And will we see Skype-certified breath mints on the Skype Store? Is it another intrusion into our privacy?

P.S. – Amber was the pioneer in using Skype for TV broadcasts: Skype Video for “Live On Location” Television – long before Oprah.

Two years ago at CES 2010 Skype announced Skype for TV with two partners (Samsung and LG). It was only available on very high end Internet-enabled TV sets and required vendor-specific webcams. Effectively the cost of adoption was over $1,500. CES 2011 saw an expansion of the number of TV set vendors (Panasonic, Toshiba, Sony, Vizio) and the support of Skype for TV on BluRay DVD players from Panasonic and Sony, bringing the cost of adoption down to about $400 for the player and a supporting webcam.

One other complication was that all these offerings required a webcam that was specifically designed for the individual TV/player vendor. At a July 2011 panel discussion, Skype President Tony Bates mentioned that Skype for TV was installed into over 50 million TV sets; however, again these were mostly high end sets with a price point that did not encourage mass consumer adoption.

At CES 2012 there were some demonstrations and announcements that effectively make it possible to enable every television set to support a Skype for TV video or voice call at a much more reasonable cost:

• Tely Labs launched its TelyHD platform – an Android-based webcam that embeds HD video support of Skype for TV. Most significantly it is TV vendor-agnostic as it can work with any TV set that has an HDMI input. More on TelyHD to follow in an upcoming review. Total cost: $249.00 including webcam, available at the Skype Store.
• The newly announced Sony BDP-S790 BluRay player, available later this spring, is unique from a Skype perspective in that it will work with any webcam that supports Skype.

• Sony was also demonstrating a prototype of its forthcoming Android-based “Smart TV” set top box as its version of Google TV. It will deliver all the common Internet social networking applications such as Twitter, Facebook, YouTube and Skype, amongst others, to any TV set and again work with any webcam.
• Samsung announced its inTouch Android-based webcam supporting Skype and other social networking applications; deliveries to commence later this spring.
• All of these devices support not only HDMI and 720p HD video resolution but also an embedded WiFi internet connection.

Samsung was demonstrating Skype for TV where, as shown on the right, the webcam was embedded into the top frame of the television set. While apparently still supporting Skype for TV, there were no demonstrations in the Toshiba or LG booths.

Panasonic and Sony had new versions of their BluRay player, as well as new firmware supporting Skype for TV on their Viera and Bravia lines respectively. As shown in the video below, Panasonic’s firmware allows you to watch TV during a Skype call where you can switch the audio between Skype and the TV channel audio within the context of the conversation.

http://www.youtube.com/watch?v=ZQhj7za2uNk

A couple of the booth personnel mentioned that the one feature missing in a world where all TV vendors are actively encouraging 3D TV was the ability to adopt Skype for TV to 3D; apparently many of their other “smart TV” social networking applications somehow have the ability to “upscale” 2D to 3D. Not something I’m holding my breath waiting for, especially given what the webcam requirements would be.

Bottom line: The launch of products lowering the adoption cost of Skype for TV, especially on existing TV sets, significantly expands the potential user base of Skype for TV, not only for consumers but also for business use. The number one advantage is the ability to hold video calls where the other end point can be a PC, smartphone (iPhone, Android phone) or tablet – or another TV set that supports Skype for TV.

On the other hand, at the time of writing this post Skype for TV does not support Group Video Calling; in fact, currently one cannot even be a participant on a Group Video Call with Skype for TV.

While the webcams for Skype for TV are currently vendor-specific, it appears that the ability to use a generic Skype-certified webcam should appear later this year on the Sony devices. On the other hand TelyHD offers a complete solution in one hardware package.

Related articles

• Google TV’s biggest competitor looks awfully familiar (gigaom.com)

The Consumer Electronics Show is the industry’s largest international gathering that tends to take over Las Vegas for four days. Skype at CES 2012 is rather low key this year with no press announcements, a small “open air” Skype Lounge in the Central Plaza in front of the Las Vegas Convention Center and a kiosk in the Microsoft booth.

The Skype Lounge features a demonstration of the recently announced TelyHD Skype video calling for any TV set and Skype Video Calls on a large screen with various local Las Vegas locations such as a museum and some school attractions. Occasionally they get worked up with “jump time” throwing out free cell phone socks to passersby. The biggest issue here is visitor traffic; due to its location barricaded largely by a key roadway for shuttle busses and taxis, it’s a little like the barriers put up by an urban freeway.

Meanwhile over at the Skype kiosk in the Microsoft booth are two sides; one with four PC’s where visitors can make Skype calls; on the other side a 55” LCD TV screen receiving an HD video transmission from the Skype Lounge. Lots of traffic; but no presentations as done at some other Microsoft kiosks (Windows 8, Kinect, Windows Phone, etc.)

Make Free Skype Calls	Skype for TV at 55” (720p HD, no pixelating)

On the show floor so far I have seen Skype in the Logitech booth (new C920 1080p HD webcam), Blue Microphone with a unique USB microphone for laptops and NVidia where there is another TelyHD demonstration.

I’ll have more to report on TelyHD after an interview later today.

And our presence did get tweeted.

Bottom line: It is called the Consumer Electronics Show where the focus is on the business relationships behind end user experiences for consumers. While Skype had no news announcements, they focused on demonstrating the user experience and applications of video calling. At the same time I suspect Skype is working out the path to its incorporation into Microsoft products – Live, Xbox/Kinect, Office, Windows Phone, etc. And we’ll hear about it at some Microsoft -sponsored event – tying in with their reasoning for dropping out of CES as both keynote and exhibitor.

Recently Skype has participated in several technology sharing activities with Facebook: Facebook Video Calls, Facebook Chat sessions through the Skype client, a Facebook news feed on the Skype client home page and most recently video calls from the Skype client to your Facebook Friends.

However, until now Skype has been somewhat weak on using Facebook for social networking’s real power – user engagement. Even so over 5,000,000 Facebook users had “Liked” Skype’s Facebook site.

Three weeks ago Skype launched its new Facebook Fan Pages site with a focus on building user engagement. According to Jennifer Caulkin, Skype’s Social Networking Manager,

“We revamped the Skype page on Facebook because its about engagement with our fans.  We want to give them compelling content, access to product information, the latest Skype download, exclusive deals, unique promotions and fun stuff.”

One of Skype’s marketing challenges is to make users more aware of Skype’s broad feature set beyond basic voice and video calling. Skype’s Facebook page is one step in this direction with its focus on allowing users to more readily learn about these activities, experience some Skype features and provide feedback.

Several new tabs have been added (click on”More” to see all tabs). For instance, Skype  and Facebook provides a promotional video about using Facebook from the most recent versions of the Skype for Windows/Mac clients. “Stellar Deals” describes a few “bundle” packages involving hardware and Skype calling plan subscriptions. (However, would be more useful to have these specials offered beyond the U.S.)

Say It With Skype provides a way to experience Skype Group Video calling by using Skype Group Video to send a birthday greeting. More on this in a post to follow.

Much of Skype’s Facebook site is promotional, encouraging use of services, purchases and having fun. However, here’s where the reality hits the fan: the Facebook Support tab is one channel for entering issues with using Skype. When an entry is made onto the Support tab it is immediately also copied over to Skype’s new Community Forum for a response. Replies posted to the item in the Community Forum are then also copied back to the Facebook Support page. Click on the tabs below to see how one entry is mirrored on the two support venues.

Skype Support Channels - An Example Entry

• Facebook Support Page
• Skype Community Forum

Basically the Community Forum mirrors any entries on the Facebook Support page where Skype personnel and Community Forum members can respond to an issue.

Eventually it will also be possible to post Replies directly onto the Facebook Support page; however, due to a recent change in Facebook’s requirements for Fan Pages, Skype is working on the adjustment required to adhere to Facebook’s new policy re Fan Page security.

Bottom line: many businesses are feeling their way to determine how Facebook’s Fan Pages can be used for user engagement and as a marketing tool. While there is certainly going to be a lot of self-promotion, providing opportunities for customer participation or user feedback is critical to maintaining the integrity and credibility of Facebook Fan Pages and, most importantly, repeat visits. Only time will tell how successful Skype can be with their Facebook presence but at least there is now a concerted focus on engaging users through social networking activities.

Related articles

• Skype Now Using “@SkypeSupport” on Twitter (disruptivetelephony.com)

While the FREETALK® Connect•Me Adapter for Home Phone became available in late August, I only received a production hardware version three weeks ago. I have now had a chance not only to verify the operation of all its features but also to observe some of the reviews.  But before talking about its operation I want to identify its market positioning as a result of my own experience and some of the review comments.

What is FREETALK® Connect•Me Adapter for Home Phone?

It’s essentially an ATA adapter that allows you to use a conventional 12-key TouchTone analog phone¹ to make calls to Skype Contacts and SkypeOut numbers over an Internet connection. Optionally you can continue to make calls over a landline.

Who is it for?

Anyone who wants to make Skype and SkypeOut calls without the need for a PC and already has a 12-key TouchTone phone. It is especially convenient for use with today’s very common cordless home phone setup comprising a base station and multiple handsets distributed around the house.

It offers a worldwide long distance service that combines free Skype-to-Skype calling with low cost SkypeOut calling to the PSTN. When combined with a local landline service it provides a unique complementary long distance service, especially if you are making international calls outside U.S./Canada.

Initially it is only available for use in U.S. and Canada; versions for European and other countries are anticipated to follow early in 2012. Update, Nov. 15, 2011: FREETALK® Connect•Me Adapter for Home Phone is now available in the U.K.

What is it not?

A complete replacement for a landline service. You still need a landline or alternative service for emergency e911 calling. Also the landline service will often include “free” local calling to a region identified by the carrier.

What are the requirements?

• A traditional 12-key TouchTone phone with its standard RJ-11 cable connection
• A broadband Internet connection (via a port on a router connected to your cable or DSL Internet service) accessed via a standard RJ-45 Ethernet cable connection
• An AC power connection (110-120 volt in US/Canada)
• For configuration and setup only: a Windows or Mac PC
• Optional: a traditional PSTN landline service with RJ-11 cable connection

Why would you buy it?

• To place free Skype-to-Skype voice calls to any destination worldwide from the world’s most familiar telephony user interface
  • the call can be received on any Skype-enabled platform: PC, smartphone, iPad, TV or even another Home Phone with Connect•Me.
• To take advantage of Skype’s low worldwide international calling rates and calling plan subscriptions for calls to the legacy PSTN or mobile phones in over 180 countries.

So what has been the experience?

While most of my calling involves using Skype on PC’s or a wireless service on a mobile smartphone I have maintained one line of a legacy PSTN service from Bell Canada, mostly for local calls and as a matter of convenience.  I also have a long time investment in this phone number as my primary business number. (My fax line has been replaced by PamFax; a second voice line became redundant a few years ago.)

A couple of years ago I reviewed this setup with Bell Canada where I wanted a minimal long distance capability while maintaining the ability to make local calls. Just having access to a reduced long distance charge was costing me $11.00 per month before making any calls. I seldom made long distance calls on that line but needed it for emergency circumstances such as when my smartphone batteries had died or my Internet connection was down. It was also a convenience when placing local calls from its physical location.

I have replaced the Bell Canada long distance service with the Connect•Me Adapter with the following consequences:

• I can make Skype-to-Skype calls worldwide at no cost
• I can make SkypeOut calls at 2.3 cents/minute vs Bell Canada’s charge of 10 cents/minute
  • I have the option to use a Skype Calling Plan subscription, if call volume suffices
• I have eliminated the $11.00 per month fixed charge from my Bell Canada bill.
• I make “local” calls over the landline at no additional charge beyond the monthly service charge.
• I continue to have access to Bell’s auxiliary services such as call forwarding, call waiting and basic voice mail.
• TouchTones (DTMF signals) are passed through successfully for services that require, say, dialing into a business extension or placing a prescription order with a drug store.

But here are the caveats:

• I need to start landline calls using the # key followed by the normal 10-digits for local calls.
• I can start SkypeOut calls by dialling ** followed by [country_code] [area_code] [local_number]
• I can access up to 100 speed dial numbers for both Skype and SkypeOut calls
• I have set up a separate Skype account with only 30 to 50 contacts. This becomes an essential consideration if you are using this service for personal or family calls and your normal Skype account is used heavily for business. Note that the Connect•Me Adapter can handle up to 200 contacts.
• Due to my low SkypeOut call volume on this phone line I am using Skype credit for SkypeOut calls; however, one can use a Skype Calling Plan to call U.S./Canada at $2.95 per month or over 40 countries worldwide at $13.95 per month subject to Skype’s fair usage policy.
• And to repeat (from the user portal):

• If you have a landline connected, dial #911 for e911 service.

And how is the voice quality?

Calls using the landline have the same quality as a normal narrowband landline call. (When placing a landline call you’ll hear some exotic noises while placing the call but the connected call allows me to carry on a normal phone conversation with no audible distractions.)

When making a SkypeOut call to the same number I have observed noticeably clearer voice quality compared to using the landline . And on Skype-to-Skype calls there is excellent voice quality.

By making a call to my primary Skype account on a Windows PC I was able to check the Call Technical information which reported a “NWC” codec with 16KHz sampling. This confirms that, where feasible, the Connect•Me Adapter supports wideband audio. I am told that NWC is actually a dynamic codec that will switch between narrow band audio G.729 and wideband audio G.722 codecs as appropriate to the connection conditions. But the bottom line has been a much crisper audio on a SkypeOut call than experienced on the landline.

How does the Connect•Me Adapter get set up?

The Connect•Me Adapter is accompanied by a user portal for setting up:

• Call Settings –
  • Do you want to have local calls default to the landline or SkypeOut?
  • Do you want international calls to default through SkypeOut?
• Call Forwarding and Voicemail –
  • calls to your Connect•Me-enabled home phone can be forwarded to, say, your mobile phone or any other landline number; the delay before forwarding can also be set.
  • if call forwarding is not set up you can set up and use Skype voicemail. If both are setup call forwarding takes priority.
• Contacts and Speed Dials –
  • Add Skype Contacts to your account, set up speed dials for making Skype-to-Skype calls and SkypeOut calls.
  • There is an option to print out your speed dial list.

Firmware Upgrades: From time-to-time FREETALK will issue upgrades to the firmware to offer new features and/or bug fixes. The first upgrade added support for Skype voicemail. These upgrades are provided automatically with no user intervention required. There is an option in System Settings to define a time-of-day for accepting upgrades, such that upgrades will not interfere will normal calling times.

Update: as I was finalizing this post I lost power at my office location. When power was restored about 30 minutes later, the Connect•Me Adapter came back up within a couple of minutes; I was able to make both Skype and landline calls with no user intervention.

Bottom line: The FREETALK® Connect•Me Adapter for Home Phone provides an option for taking advantage of Skype’s services for voice calls using a standard 12-key TouchTone phone set. It can either be a stand alone service for long distance calling, with the caveat that it does not support e911 emergency calling, or an international long distance service complement to a “local” landline service.

When attached to a DECT cordless phone base station, it will Skype-enable all the handsets around the home.

Initially the FREETALK® Connect•Me Adapter for Home Phone is only available for use in U.S. and Canada via either the Skype Store or the Amazon U.S. and Canada stores (search for FREETALK under Electronics). There are three SkypeOut options:

• 60 minutes of SkypeOut calling as the starter package
• a one year North American (US/Canada only) Calling Plan subscription, or
• a 3 month worldwide Calling Plan subscription to over 40 countries

Individuals need to make their own assessments of the savings they will achieve by using the  Connect•Me Adapter. In particular “local” landline services and calling plans will vary by carrier. The information presented here is for one particular circumstance using the author’s landline carrier.

Should you wish to make PC free calling but require a phone handset, the GE Digital Cordless phone offers a more complete Skype experience as it can embed your Skype Contacts and provide presence information.

Full disclosure; the author was a participant in late beta testing for this product using a pre-production version of the device; however, he has received no compensation for his evaluation and feedback. There are no affiliate links in this post; if one clicks on the link to PamFax, there are affiliate links on that page.

¹ It will work with any single line phone, including cordless phones, except older cordless phones where the cordless connection works over the same 2.4GHz band as WiFi. Also, run legacy Nortel phones with a power adapter in its “backup” mode using power from the phone line – i.e. – without the power adapter.

Related articles

• Now you can use your home phone for Skype calls (gigaom.com)
• New Freetalk adapter makes Skype more like MagicJack (skypejournal.com)

Last week Skype announced some changes to their developer program. In that post I mentioned that the only application to date where one could experience SkypeKit Desktop in action was a beta version of Trillian for Windows. Earlier this week Trillian released version 5.1 to the Skype Apps Directory.

Trillian aspires to become a single client for all your conversation, messaging and social networking activity, whether on Skype, Google, Facebook, Live Messenger, Four Square, several email services and many others. And there are versions for Windows, Mac, iPhone, Android, BlackBerry and the Web. Ideally it would replace several individual clients and be accessible across multiple platforms.

Having set up an account that has been active for about a week here are some observations:

• While it allows you to track and converse with several applications and services, each one remains siloed with respect to exchanging communications. In other words, Facebook converses with Facebook on any device but not with, say, a Google application. Skype conversations are established with other Skype contacts only.
• It is the first application that demonstrates the use of SkypeKit in a desktop application; as a result it not only supports chat conversations and voice calls but also provides support for Skype’s SILK codec providing crystal clear voice quality, file transfer and access to select audio devices.
• At the moment it does not support video calling but that is simply because Skype only released the appropriate Skype video API’s last week; there is no technical reason that video calling should not appear in a future release of Trillian.
• Voice call quality experience reflected the crispness and clarity expected of the SILK codec. On a Trillian to Skype for Windows call, the Call Technical Info confirmed use of the SILK codec.
• Trillian offers a “Pro” service where all your activity is stored in the cloud on their servers; cost is almost a “nobrainer” at $12 per year.

Trillian is well along the path of providing a single client for multiple applications and services. It runs on not only PC’s but also iOS5 and Android devices. Its Pro service allows you to track all your conversations on any of these devices. However, Trillian for Mac does not yet have any Skype support (even in a beta version) yet the SkypeKit API’s are available. One cannot expect Skype support any time soon on iOS5 and Android devices as Skype has yet to release any API’s for working with these devices.

Some screen shots:

Trillian for Windows 5.1 Preferences | Accounts screen provides an overview of how it may be set up:

The main Trillian menu showing all the applications and services to which I have logged in along with an example of my Twitter feed:

All the “Contacts” menus were compressed to demonstrate the various options available for messaging. Double clicking on any of the social networking accounts brings up the relevant feed in a separate window as shown.

As shown in the menu at the right Trillian is a good way to find a Contact’s “current” status on all their social networking and messaging applications. Simply filter down with a (partial) name and you get this. In this example Boston is online in Skype, GTalk and GMail and Facebook while Alex is offline in both.

Note that, while logged in, a Contact appears under the appropriate messaging application but once logged out the Contacts are all relegated to the Offline Contacts category. Also note the icon beside each Contact name to identify the relevant messaging application.

With Google applications, logging in and out can result is some strange identification such as “gmail.51AC27DE”. It simply indicates, in this case, that the contact can be accessed via GTalk or GMail simply when s/he is logged into either. In fact, this also happened with someone who contacted me through the new Google+ chat feature where the identification under Google Talk starts with “TalkGadetC85….”.

With Trillian open or running in background you also have the option to receive small notification windows at a designated corner of your desktop as a feed is updated or an IM message is received. This can be annoying and distracting; it requires some discipline to ignore it. There are options in the preferences for turning these notifications off.

During a Skype voice call the user interface contains all the features associated with Skype calls:

One final observation: when you go to Task Manager | Processes you see this when SkypeKit is being used:

Small footprint relative to Skype (which was also open when this screen capture happened). As a matter of interest trillian.exe is using about 29,000K of memory. But this is without any video support; it will be interesting to see any change once Skype video can be accessed via Trillian.

Bottom line: Trillian is certainly well down the road to becoming a universal messaging and social networking client. And it gives an initial feel for how SkypeKit can be deployed in a desktop application. For those who use multiple applications it can become the default IM/social networking client; in fact, “Boston” in the example above has done so as he follows both Skype and Facebook for chat. Currently he still needs to open Skype for video calls.

Check out the Skype App Directory to download.

The Big Brother feel: And if you were wondering where Dan York is active as I write this (he had Google+ open in two browser windows):

Related articles

• Is Skype Soon To Release New APIs? Skype Renames Public API And Extends “Plugged into Skype” Partner Program (disruptivetelephony.com)
• Whither Skype Extras III? On the Skype Store Apps Page (voiceontheweb.biz)
• Skype desktop SDK to bring video calling to third-party apps (arstechnica.com)

So the iPhone announcements today blew away the speculators. And we’ll have to listen to another year of pundits speculating about the iPhone 5. So here’s something else to speculate about;we should have some direction as to where this story is going by the end of the week.

According to the recent information the European Union’s next statement on the Microsoft acquisition of Skype should appear in three days (Oct. 7). However, in the interim there are a couple of points to note:

• An Italian VoIP provider has filed an objection requesting that the purchase be blocked unless Skype is “removed from Microsoft’s ubiquitous Windows Office platform”. To which I can only say, “Huh?” While there was in the past an email toolbar linking Skype information into Outlook, that quietly went away a couple of years ago. (I had been a beta tester for it.) I have yet to find or install any Office product with Skype embedded. Somehow it’s tough to remove what is not there!
• Skype Journal’s Phil Wolff has written a long tome on Should the US have OK’d Microsoft’s purchase of Skype? Should the EU? He outlines many considerations that become overwhelming in the resulting comprehensiveness. It provides a range of where there might be competitors who could be threatened, but many are either fairly strong in their own niche or have markets with some level of feature set where Skype integration would actually be of benefit.

One can get embedded into discussing feature set, interoperability, protocol and other technology logistics; it can get to be a very complex and time demanding process. The bottom line should be a simple ruling that takes into consideration the need for there to be the ability:

• for any third party to have access for embedding Skype features (via, say, an expanded SkypeKit) to strengthen their own offerings through real time communications enhancements as well as
• for the various Microsoft offerings (such as Outlook) to have access to an API set for third parties to integrate their offerings, including real time communications services, into a Microsoft offering – via industry standard protocols. But developers, such as former Skype employee Peter Kalmstrom, have already demonstrated how to leverage Microsoft offerings successfully through innovative add-ons and services.

Bottom line is that coming out of this review should be an environment that encourages innovation, whether by Skype or third party services, delivering offerings that have the potential to actually achieve market adoption and success. Microsoft has to recover its $8.5B investment; developers need to see a fair and profitable opportunity for identifying and addressing market niches that can build on Microsoft platforms.

In passing on a review the U.S.’s regulatory authorities did not see any issues. The EU seems to figure out some way to be more aggressive, especially when it comes to Microsoft; some other issues are discussed in a previous post here. It will be interesting to see what comes out from the EU Competition Commissioners on Friday.

Jeff Pulver has been operating 140 Characters Conferences over the past two years at many U.S. locations where attendees hear stories about how Twitter has played a role in both personal lives and business activities. About six months ago an ambitious group of social media enthusiasts in the Kitchener-Waterloo region approached Jeff about about holding a session in Kitchener, Ontario – twin city to Waterloo about an hour’s drive west of Toronto. Jeff, who has had many reasons to visit the Toronto area over the past several years, suggested that it be billed as the 140 Characters Conference: Ontario to give it a regional perspective.

A historical perspective

During his keynote Jeff mentioned that his origins with real time worldwide communications go back to his early exploration of amateur radio – the only way to communicate socially with individuals worldwide prior to the Internet other than to make expensive international telephone calls. I recall several friends who immersed themselves in amateur radio due to the intrigue of finding new friends in far off locations. (Full disclosure: the author used the Radio Amateur Handbook to build magnetic resonance spectrometers at an early stage in his career.)

One of the applications that drove the adoption of Quarterdeck’s DESQview multi-tasking environment for DOS was community bulletin boards that used DOS PC’s with modems and dial-up connections to allow individuals to communicate via text messages. One of the more interesting applications of bulletin boards was managed by an child oncology doctor at Toronto’s Sick Kids Hospital. She had set up a bulletin board service whereby her patients could continue to communicate with each other once they had left a hospital and returned home. The key learning here was that an otherwise geographically dispersed community with a common interest could come together and share their experiences in dealing with their disease as they carried on their day-to-day lives at home. One of the key observations made by the doctor was that the kids could communicate without the need for others to see any physical impact of their cancers – “kids without faces” she called it; as a result it helped to keep discussions focused on the issues they faced in living their lives and gave them the confidence to raise their concerns.

So there was some early evidence that with the appropriate communications tools available, one can establish common interest groups and communities that engage in conversations sharing experiences and information that are otherwise “below the radar” of mainstream media. And they could do this across an electronic bridge that broke down geographical barriers.

So where are we today?

In the past fifteen years we have seen the evolution of many tools for engaging conversations with others through the Internet: email, web post comments, Skype chat sessions, Facebook and, of course, Twitter. For most of them, one is dealing with a closed or gated” community where you, say, accept Friends on Facebook, approve Skype contacts and put up anti-spam filters for email, etc.

However, what became apparent with yesterday’s presentations were:

• Be authentic, remember you are always presenting your “personal brand”, not only building relationships but also establishing legitimacy and credibility even if that is not your intention
• As a “broadcast” tool where anyone can see your Tweets if they have the right tools and filters, you can recruit a community to help you with your common interest.
• Whereas physically close family and friends may not see the nature of your issue, someone out there in Twitterland will be willing to share their experiences and information resources via 140 character messages. Yes, there are pluses and minuses but let’s focus on the positive outcomes here.

We heard stories about helping a single parent with no support resources, alleviating depression, losing your job and becoming an entrepreneur starting your own business, watching out for the “little things” to reward small but important achievements at a small business, growing a “new age” fitness business where the actual activity is secondary to the socialization and building community morale and enthusiasm in a town that has lost most of its “conventional” manufacturing industry. Taylor Jones describes it more completely here.

It was obvious from yesterday’s presentations that each presenter had built a community of interest but most interesting was to note that Twitter was not simply a tool for social networking but also a seed for changing lives. But, as AmberMac stated in her presentation, keep in mind as you tweet – with influence comes responsibility.

The Take Away

A couple of years ago, in conjunction with a CES show, I attended one of Jeff’s initial sessions where he was trying to identify a market to address built around this 140 character communications tool. At that session we listened to Twitter experiences but the presenters largely were achieving commercial success.

What was different yesterday across all the presentations was a common thread of not simply socializing via the Internet to build relationships but then using that socializing for experiencing follow up social change in our lives, whether the Twitter engagement involved dealing with individual personal challenges or driving a “community” to take the initiative to achieve a common goal.

Acknowledgement: Kudos to the K-W area team that organized this conference. Well done, well run. Look forward to hearing about another one in the future.

Recently Skype CEO Tony Bates confirmed that the major step required to complete the Microsoft acquisition of Skype is approval by the appropriate European Union competition authorities. Keep in mind:

• Skype, LLC is a Luxembourg-based company (Is Luxembourg the Delaware of the EU?)
• Microsoft will be doing the acquisition using cash from outside the U.S., taking advantage of a tax situation.

Today we learned that, in Reuters’ September 5 report on EU mergers and takeovers:

NEW LISTINGS: — U.S. software company Microsoft (MSFT.O) to acquire video chat service Skype (notified Sept. 2/deadline Oct. 7)

Don’t know what stage this takes the approval process to but it sounds like the European Commission should be saying something about the approval by October 7; one of:

• passing on any further investigation allowing the acquisition to proceed
• approval, possibly with conditions
• announcing that there would be further investigation, or
• denying approval

Whereas the FCC basically ruled that this was a “transaction granted early termination”, effectively saying they had no objection nor desire to investigate further, the European Commission has been much tougher on Microsoft with respect to previous rulings regarding its Windows operating system, including a massive €833 million fine in 2008.

On the other hand it appears that EU anti-trust Commissioner Neelie Kroes, who was heavily involved in imposing that fine, is more sympathetic to Skype, especially when it comes to competing with wireless carriers and their excessive roaming charges. According to David Zielenziger on the Business & Law blog:

Last year, Kroes discussed her affinity for Skype, which she said lets anyone with a connection communicate. “Vote with your feet and leave your mobile provider,” she told a conference. “The message will be all the more powerful when it comes from the bottom up and not the top down.”

David goes on to attempt to position the role of the Google acquisition of Motorola Mobile in all this. Really it’s a bit of a crap shoot where the real villain appears to be the wireless carriers in Europe.

Jean-Jacques Sahel, Skype’s Government Relations Manager for Europe, Middle East and Africa, had more to report on the EU’s attitude towards Net Neutrality and a potential role for Skype last fall:

Last week in Brussels, European Commissioner Neelie Kroes highlighted her use (and enjoyment!) of Skype, and encouraged consumers to boycott those operators that don’t allow Skype. A lot of you might want to follow her call to action. If you can.

But he also points out the many barriers to switching in a real world and suggests what action the European Commission can take towards adopting the much mangled “net neutrality”.

Has the role of WiFi as the “stealth” carrier been considered? On my recent trips to Europe, I was able to find enough WiFi access points to leave my iPhone in Airplane mode and use my BlackBerry for voice calls sparingly.

One final question: what are the advantages of calling Skype “a video chat service”? While there has certainly been a strong emphasis on video calling in Skype’s recent promotions, it’s obviously a lot more than simply video. Is there a “hidden” agenda in this description of Skype?

Ah, the joys of being a government interloper with lots of economic theory to justify! If only consumer demand for what amounts to a “free” service that has brought pricing to zero could participate in the discussion. Will technology triumph over bureaucracy? Will Skype’s role in overcoming barriers to worldwide communications be considered?

Meanwhile we’ll await the next word from the European Commission in early October (or earlier?).

I’m no expert on these issues (although I have participated in a few acquisition due diligence exercises). I have probably not covered all the issues. If you have more to contribute to the conversation, please speak up in the Comments.

Today marks the 8th anniversary of Skype’s launch as a free voice calling and instant messaging service running on Windows PC’s. Within the first month Skype had over 500,000 users; today Skype can boast of 170 million active users with as many as 30 million users online concurrently.

Skype’s Jennifer Caulkin, in her post, Celebrating Video Calling on Skype’s 8th Birthday, talks about the impact of Skype’s most unique feature: video calling. Having followed Skype since the launch of Skype video at 320 x240 resolution in 2006 followed by High Quality Video calling in the fall of 2007, one continues to be amazed at the various stories where Skype video has made a difference in people’s lives:

• Courtship: Skype’s initial low quality video (320 x 240) helped Eric and his wife carry on a long distance courtship five years ago at a time (before the launch of High Quality Video) when they were physically separated; today they are the proud parents of two children.
• Marriage: in times of geographical and cultural challenges, many Skype video calls have been used to assist and view marriages.
• Birth: Baritone Lawrence Brownlee was under a contract obligation to perform in Paris when his wife gave an early birth to their first son. Lawrence called Skype Video “an invention like the wheel”.

And the recent launch of Skype Group Video, combined with the voice quality of Skype’s SILK voice technology, is behind a very productive and interactive weekly meeting of an mentoring group in which I participate. I have also participated in other Group Video calls with participants across four continents for business meetings.

Aside from the “network effect” of Skype’s 170 million active users is the evolution of Skype well beyond the PC. With Skype’s cross-platform calling, video calls can be made between not only PC’s but also iPhones, iPad, Android phones and Internet-enabled TV sets. The recent launch of Skype for iPad is a perfect platform for video calls from the perspective of both portability and display size.

As Skype’s Jonathan Christensen pointed out at eComm 2008, Skype’s 2003 launch in success was not only due to Skype itself but also due to the confluence of PC market and Internet infrastructure conditions that made it possible to be easily installed and for adoption to take off:

Most Skype video calls on PC’s run at Skype’s High Quality Video standard of 640 x 480 (VGA) at up to 30 frames per second and require a minimum 384 Kbps upload speed on the Internet connection – easily achieved on most broadband Internet services. Recently Skype for Windows and Skype for Mac, combined with appropriate webcams, incorporated support for 720p HD video provided you also have sufficient Internet upload speed.

Today’s infrastructure challenge when it comes to Skype Video calling is the requirement for a 1.2Mbps upload connection to support HD video calling (720p @ 22 fps). Several webcams now support HD video calling; when it happens and your bring a video call to full screen display on a >20 inch monitor, it’s the closest Skype offering to telepresence. But most consumer broadband services cap out at 1 Mbps upload speed. Surely this will be addressed by broadband service providers over the next couple of years.

On the other hand, most users are simply happy with a good quality video call, whether at VGA or HD resolutions. It’s the call experience that matters most. It’s a bonus experience when you can take full advantage of High Quality Video or HD video.

Bottom line: Skype’s video calling has become the mass adoption of AT&T’s picture phone first demonstrated at the 1964 World’s Fair in New York. With over 40% of Skype calls using video, it has become Skype’s most prominent defining technology; best of all, one-on-one Skype video calls are free and at a low cost for Group Video calls as one of three features of a Skype Premium subscription. It will be interesting to see how video calling evolves once Microsoft’s acquisition of Skype has been completed (later this fall?).

Update: Phil Wolff at Skype Journal reviews and speculates: Happy 8th Birthday, Skype! Many happy returns.

Note: webcams supporting HD video calling include FREETALK Everyman, FREETALK Conference HD Webcam, FaceVsion Touchcam N1 and V1, Logitech C310/C510 and C910 webcams as well as the webcams on the recently released MacBooks and iMac’s with Intel’s 2nd generation “SandyBridge” iCore processors.

Related articles

• How is it different from Skype? (skypejournal.com)
• Skype CEO Tony Bates talks about making Skype video calling ubiquitous (blogs.skype.com)
• 30 million people online on Skype (blogs.skype.com)

Since the demise of the Skype Extras program was first announced two years ago, several of the developers with third party applications worked to wean themselves off a dependence on the Skype Extras program for their survival. However, the products remained available via the fairly innocuous and plain Skype Extras page on the Skype Store.

Yesterday I learned that a new, unannounced, menu item had been slipped into the Tools menu of Skype for Windows 5.5 as shown on the right.

Click on the Get Apps… and you go to a new page on the Skype Store:

A couple of points:

• It’s called an App Directory, not an App Store. While there is a detailed description for each application , the “Get Now” Links go to an App Store or a file download; on installing the file, you will be led to the individual application developer’s “store” page.
• For instance, the link to Qik Video for Apple takes you to the iTunes preview page with a link for purchase on the Apple App Store.
• Currently listed products comprise previously available third party products or Skype utility products listed in the Apple or Android app stores.
• Applications are categorized by “genre” such as Business, Call Recording (audio and video), Call Recording  (audio only), Faxing, Desktop and Whiteboard Sharing, etc.

In a discussion with Ash Valeski, Skype’s Senior Account Manager for the Skype Store he pointed out:

• This is simple a starting point for building a third party applications distribution channel. The SkypeKit team wants to have a distribution channel that provides awareness of forthcoming applications while supporting publishers who currently have applications that use the legacy Skype API’s.
• Expect to see more features added to this page over time.
• They have reduced the available applications to those that are currently active and appropriately supported by the application publisher, including the availability of a shopping cart where payment is required.
• There is a carousel rotating through top downloads (free and paid) and top-rated offerings.
• The directory does provide an opportunity for ratings and short reviews (via Comments) for each application. (As a test I have submitted a comment on PamFax; note that, when you make a comment, you can sign in via Twitter, Facebook or other options.)

Bottom line: This App Directory is simply infrastructure for supporting the Skype developer program. The real challenge remains for the Skype Developer program to make SkypeKit an offering that can readily and widely be adopted by not only hardware developers but also software publishers. The initial feedback on the program has been provided in this post about a hardware partner whose offering will become available later this year.

In the meantime I still find these partners are using the legacy Skype API’s; for instance, Pamela just went through an upgrade based on the legacy Skype API’s. And, amongst the publishers listed in the App Directory, Pamela publisher Scendix is not alone in this regard. However, this launch is one small step that demonstrates that current management wants to get more proactive with both the Skype Store and the Skype Developer program.

Related articles

• Whither Skype Extras Today? Withered? (voiceontheweb.biz)
• Skype’s developer websites: an overview (blogs.skype.com)
• Skype Launches Third-Party App Directory (techcrunch.com)

After a beta period of several months last fall, Skype launched Group Video Calling on Skype for Windows at CES 2011 as one element of its Skype Premium service. Group Video Calling on the Mac became available with the release of Skype for Mac 5.0. Over the past few weeks I have had the opportunity to host a weekly group video call for an Internet Marketing mentoring group in which I participate.

This was a group that had been using a hosted push-to-talk conferencing where only the speaker’s video would appear – using Adobe’s Flash Video. It provided a tedious (and not terribly robust) way to share voice and video but ….

• being push-to-talk, only one person could talk at any given time; any ad hoc conversation had to be via the text chat window.
• there were pregnant pauses while the video started for each participant who wanted to talk; it was not what one would call “totally interactive” or spontaneous ad hoc conversation.
• the chat window was only available during a session; if you lost the connection and reconnected, you only picked up new chat messages and lost any previous content, such as URL’s and email addresses.
• voice quality was acceptable but definitely compromised by the audio technology employed
• the service itself often could not stay connected for the duration of a conferencing session.

Once we were about to cancel one of our weekly sessions due to hosting issues when we realized there were fewer than ten participants on the scheduled call. Instinctively I fired up Skype Group Video Chat; immediately we had:

• seven or eight participants on a call, each with live video (provided s/he had a webcam)
• a fully interactive meeting experience where one could start talking “spontaneously”
  • due to the nature of the group and a “business meeting” discipline, no moderator was needed
• participants were on both Windows and Mac platforms
• a persistent and archived chat session is available
• while some participants used headsets, others used microphones and their PC speakers – but there were no echo issues from any party – echo cancellation played a key role in the audio quality experience
• voice quality is “as if we were all sitting around a table in the same room”
  • due to Skype’s superwideband SILK audio technology

But don’t take my word for it when it comes to the audio performance. During an interview with the mentoring group’s leader, Brad Gosse, about how he uses Skype to build and support his business, I asked him about his impression of Skype Group Video:

http://www.youtube.com/watch?v=XYOhIYERp2Y

Any participant with Skype for Mac 5.3 could actually share his/her desktop to a Skype Group Video call; hopefully this feature will soon be supported in an upcoming release of Skype 5.x for Windows.

One other “robustness” feature I noticed during a recent call. For whatever reason, one of the participant’s Windows PC crashed during the call; Skype for Windows gave me, as the host, “transparent” notice of an Internet Connection issue, the participant’s video disappeared from the call screen, yet the called carried on without interruption. However, once he rebooted his PC and opened Skype he was presented with an opportunity to rejoin the call, did so and reappeared in the call with no disruption of the call itself. (As shown in the image, participants who have left a call are prioritized in the Add to Call screen.)

Bottom line: you probably have to participate in a Skype Group Video call to fully appreciate the participant audio and video experience. Suffice it to say all the participants’ feedback from these calls relates to the value of the discussion content – the video and audio technology has become totally transparent to the real purpose of the session.

A couple of related posts:

Andy Abramson talks about Video Calling In The Living Room where he intends to use Group Video calls for his weekly staff meetings:

Virtual face to face meetings that will replace the faceless conference call. With video calling in the living room, or the conference room available for so little money, you have to wonder why people are waiting?

Michael Graves points out why he continues to use headsets at his home office to avoid introducing “room tone” into his audio: Can You Hear Me Now? Headset vs Speakerphone In The Home Office

Note that Skype continues to include unlimited calls to North American destinations with a Skype Premium subscription.

Related articles

• Facebook Video Chat – Powered by Skype: First Impressions (voiceontheweb.biz)

Not all PC’s were created equal! With its level of popularity and 170 million monthly active users, there are going to be almost 170 million different PC and device configurations on which Skype is installed. Supporting a software application on this many configurations across 27 languages can be a challenge, especially when working across many versions of Windows and Mac OS/X as well as the various hardware peripherals (headsets, webcams, phones, etc.) that can be incorporated into these configurations.

While Skype does a major effort at checking out its releases such that it installs easily and works “out-of-the box” there are always a few configurations that present a challenge. Add into this mix the variety or ways one can connect to the Internet and an additional series of challenges arise. (Full disclosure: the author at one time managed a support operation for a top-selling utility product that would disclose all the “sins” of PC’s configured with DOS and early versions of Windows. Been there; done that!)

Over the past eight years the Skype Forum has been a hotbed for users to air issues and get assistance from either other Skype users or Skype personnel. About a month ago Skype announced its intention to replace the Forum by launching a beta version of a new Skype Community Support Network with improved infrastructure and navigation for reporting issues and obtaining responses.

Offering support in eight languages, it is still supported by many of those, including Skype enthusiasts, often designated as Moderator or Super User, who have provided much of the support in the past. Since its launch as a beta over a month ago, it has once again evolved into an very active forum for reporting and resolving issues with using Skype.

Earlier this week Skype announced the availability of support via Skype’s Facebook account page:

We think there is a big appetite for information about Skype, and Skype Support Network was created in direct response to that. Having this information available within our Support Network and extended to various social media channels, such as Facebook, is part of our efforts to engage customers and help them access information they need. So, feel free to ask us a question or search our community for answers right from within Facebook or visit us at the Skype Support Network.

Again it’s shown as a “beta” but there is certainly no lack of queries in its first few days:

Bottom Line: one more resource for discussing any issues arising from using Skype. While Skype employees are tracking and responding, one must also recognize and appreciate those many Skype enthusiasts who voluntarily supply their support to these forums. Without them these forums would not be nearly as effective.

Related articles

• Skype 5.5 for Windows: Deeper Facebook, New Emoticons and More (voiceontheweb.biz)
• Skype Opens Its Walls A Bit? Lets You IM Facebook Users Just Like Skype Users (disruptivetelephony.com)

Skype for iPad launched two days ago and has become an instant hit at the Apple App Store. In fact, according to AppiAnnie, which tracks sales at online stores, Skype for iPad was #1 download on the Apple App Store in 86 countries on launch day. This lead continued into the next day.

This response is certainly a measure of the intensity of anticipation; “Skype for iPad” has been a popular search term on Google for that past several months.

And a few comments based on my experience over the past two days:

• Voice quality – definitely as good as the experience using the iPhone.
• Collaboration – as a participant but not as a host! While you can follow a Group Chat or be a participant in a multi-party voice call via Skype for iPad, you cannot create any form of multi-party conversation. There is no “Add to call” feature anywhere; you cannot add/remove participants to/from a chat session. You must create and host the multi-party conversation in Skype for Windows or Skype for Mac.
  

  3 Party Call

• Video calls – while you cannot send video on the original iPad you can receive video calls on it. Have had a couple of good call experiences with it. Of importance is that video calls be received from contacts using Skype for Windows, Skype for Mac, Skype for iPhone/Android or Skype for TV.
• Notifications: once I had installed Skype for iPad I started receiving an iPad notification every time someone put a message into a Chat session. When you have over 400 Contacts, this can quickly become annoying. Go to the iPad “Settings”, scroll down to Skype (and make sure you select Skype for iPad – showing as version 1.0.1273 until there is an update), select Notifications and turn Sounds and Alerts “Off”.
• Battery drain: more than 24 hours after my last recharge with Skype for iPad open throughout, my battery is down to 55%. Certainly more than acceptable than the iPhone experience if you charge your iPad overnight on a daily basis.
• USB Headset – No! while Dan reported success using a USB headset via the Camera Connector when using the original Skype for iPhone on the iPad, I encountered an unacceptable level of choppy audio when attempting to use a USB headset. If you need a headset for, say, privacy reasons, use the 3.5mm headset jack on the iPad.

Bottom line: With battery life more in the background as an issue, the challenge now is determining under what circumstances I would use it:

• when out of the house and have a WiFi connection, whether via a WiFi Access point or the Personal Hotspot feature of my iPhone¹
• in my office as a backup when my PC is not available (rebooting or running too many other programs such that call quality deteriorates)
• as a speakerphone where maybe 2 to 4 people are listening
• (with iPad 2) as the default video phone, provided the iPad 2 can be located appropriately for capturing the video image (probably using one of the “stand” type covers)

But only ongoing experience will demonstrate where I end up using Skype for iPad. Certainly it adds to the “attache case” content I discussed when iPad was first announced. After all we often carry a mobile phone in a brief case.

¹Using the Personal Hotspot feature of the iPhone helps to consume the 6GB monthly data plan available on my iPhone – which otherwise never gets over 1GB – and saves the monthly fee for an iPad data service – especially since I seem to use well over the minimum level Rogers offers in its iPad data plans.

Related articles

• Skype for iPad: Creating a Default Video Phone for Consumers? (voiceontheweb.biz)
• Skype Now Optimized for your iPad (blogs.skype.com)

Check out the statistics that arose out of last week’s panel discussion: Skype call information; Skype for TV – coming soon to a family room near you and the change in Skype’s employee per lawyer ratio over the past year.

My previous post, Skype: Evolution from “Wildly Popular and Deeply Troubled”, covered a recent panel discussion, held last week at the Fortune Brainstorm event, on the subject of the transition of Skype as it passed through three owners: eBay –> Silver Lake consortium –-> Microsoft. I highlighted several topics where three key players, including Skype CEO Tony Bates, gave their perspective on why various business decisions were made that resulted in these ownership changes.

But there were also some interesting statistics and other information re Skype’s ongoing operations that came out during the discussion:

• Skype released five products over a six week period in June/July this year, more than had been released in the previous two years.
• It appears that, while Tony Bates was announced as CEO in early October 2010, he actually started becoming involved with Skype operations in August (an advantage of being a private company – you don’t have to announce key executive changes when they actually occur). This information came out during the discussion about the release date for the Skype for iPhone video calling upgrade .
• Skype had over 7 million downloads of Skype for iPhone 3.0 with video calling on its December 30, 2010 release date.
• When Tony joined Skype he found as his favorite statistic: “Five people who actually touched product and wrote code for every lawyer in the company.” Today that ratio is now 25:1 and rising, according to Tony’s comment. This explains why several issues have persisted over the years including:
• the lack of Skype Online numbers for Canada (which could easily be resolved to address a Canadian regulatory issue),
• the delay in releasing Skype for iPhone to Canadians due to an intellectual property issue
• the tight credit policies such as the fact that a credit card can only be used with one Skype account. If I want to use a credit card with my wife’s Skype account, I need to use a different credit card.
• the constant concern over U.S. regulatory issues as Skype rolls out a Skype for Business program in the U.S.
• Skype expects to see “Monthly Active Users” (“MAU’s”) rise to over 200 million by year end from its current 170 million MAU’s in the last quarter.
• Skype active users average over 100 minutes of engagement (in a Skype voice or video conversation) per month.
• The average video call lasts 27 minutes and is rising; an interesting statistic that helps to confirm what Skype Chief Technology Strategist Jonathan Rosenberg pointed out in his “The Rise of Real Time Social Sharing” presentation at eComm America 2010.
• Will Skype be in your family room soon? Skype for TV has already been embedded into over 50 million TV Skype-enabled TV sets (and BluRay players) worldwide, including high end models from Samsung, Panasonic, Sony, Sharp and Vizio.
• In spite of the occasional service interruption, over 35% of Skype’s user base is small business that uses Skype as their primary communications service “with the fall-back that the cost piece is so compelling”.

Bottom Line: It’s a bit of a hodge-podge of information but it all contributes to a better understanding of not only how Skype is ending up as an autonomous business division of Microsoft but also what developments are happening on the business side that have contributed to the variety of new products and releases that have appeared over the past six weeks.

Related articles

• Skype CEO Tony Bates talks about making Skype video calling ubiquitous (blogs.skype.com)
• Microsoft’s Skype acquisition expected to close by October (winrumors.com)

Over the past six years of covering Skype, there have been three “Masters” – the original founders – Niklas Zennström and Janus Friis (2003 to 2005), eBay (2005 to 2009) and the Silver Lake consortium (2009 to MS acquisition). And, once regulatory approvals and due diligence are completed, Microsoft will become the fourth later this fall.

But we’ve never heard the full background to some of these transitions. We knew there had been a major intellectual property issue – “you can’t drive the car without the engine”; we heard presentations on the Skype business model as Skype was presented to the investment community by eBay. But what happened behind the scenes that resulted in the many business decisions made to justify these ownership changes has never come out as one complete story.

At this past week’s Fortune Brainstorm Tech event in Aspen, a most interesting panel discussion revealed some of the history and reasoning behind this evolution, starting with, on John Donahue’s assumption of the eBay CEO position in 2009, eBay’s decision to “carve out” Skype as a non-core asset. On the Fortune event panel were three key players in this evolution: Skype CEO Tony Bates, Silver Lake Managing Director Egon Durban and Andreesson Horowitz cofounder Ben Horowitz.

It’s most interesting to watch the entire video but some highlights:

• Dealing with the dichotomy of a “wildly popular and deeply troubled” company that was in full blown litigation with its founders.
• How Skype continues to operate as an independent company and its sole responsibility to Microsoft during the due diligence period leading up to the closing of the Microsoft acquisition, expected in October, 2011
• Why Silver Lake, working with Andreesson-Horowitz, was able to execute on the two steps necessary to acquire Skype, in the process rescuing a “terrific asset that continued to perform, [had] fantastic network effects and continued to produce great product” from a “horrible cataclysmic outcome”. But seeing Skype as “resilient notwithstanding”, these investors recognized a unique opportunity that required a unique solution.
  • Yet they came up with a solution that would eventually give eBay investors a net gain on their initial 2005 investment in Skype.
• The internal Skype business issues that the Silver Lake consortium recognized and why they hired Tony Bates out of a senior executive position at Cisco to take over the reins.
  • In the course of this there is a lesson on how a private equity takeover can be highly successful and grow a business built around existing key resources. It’s a stark contrast to the more often publicized “slash-and-burn” approach of many private equity acquisitions where employee and product cuts become the recipe for repackaging a business investment for a subsequent sale.
  • There are some interesting comments mentioning one additional key asset, beyond the technology and user base, that made the Skype acquisition a “magical opportunity” when Microsoft was considering the acquisition last spring.
• What Tony Bates has done behind the scenes that has resulted in the release of five new products over the past six weeks¹– more than had been released in the previous two years.
  • What Tony Bates sees as a bigger revenue opportunity than SkypeOut calling.
• How the pending Microsoft acquisition of Skype will result in an entirely new business model for how Microsoft embeds an acquisition into it overall operations.

Bottom line: starting with the Silver Lake consortium acquisition, the Skype business case study is unique in how a wildly popular yet deeply troubled, engineering resource rich company can be converted into a an asset that will continue to be the “gold standard” for worldwide ad hoc communications in both the consumer and small business markets.

Watch the video; it’s a compelling – and revealing – story ….

Fortune: Lessons from Skype

¹Five new products:

• Comcast as a new platform for Skype calling
• Launch of video on Android phones
• SkypeKit public beta launch
• Mac 5.2 client announcement (post forthcoming)
• Facebook Video Calling

Related articles

• Skype CEO Teases In-Call Ads (mashable.com)
• Microsoft expects Skype buyout to close by October (electronista.com)
• Skype CEO promises brand will stay intact despite Microsoft acquisition (thenextweb.com)

Yesterday came the first firm indications of the imminent arrival of Skype for iPad. It’s been hotly sought out in Google searches and Skype users have long regarded Skype for iPhone as somewhat pathetic when running on an iPad, especially in 2x mode.  With the iPad’s much larger display and, with iPad 2, its video features a dedicated Skype for iPad offers interesting possibilities, especially for turning an iPad into a unique video phone. The first indication of its appearance was this video on MacRumors where someone had captured a temporary YouTube placement by Skype:

http://www.youtube.com/watch?v=B5G_CkPfDOU

Then came the review on CNET; this post on TUAW provides comments from an interview with Rick Osterloh, Skype Head of Consumer Product Management. But I had my first interview about Skype for iPad with Neil Stevens, Skype’s Vice President and General Manager for Consumer at CES last January. The main takeaway from that interview: Skype has hired a user interface expert to design the UI for Skype for iPad. Skype wanted to get a fresh approach to the user experience.

Some comments re Skype for iPad:

• Initial response to the video have been positive about the user experience; however, we all need to try it out ourselves.
• With Skype Everywhere – on PC’s, iPhone, Android, TV sets and BluRay players – and the ability to call the PSTN worlwide – it’s not really competition for FaceTime but rather establishes the standards benchmark for cross platform video and voice calling.
• Having had an iPad for six months, it has become, as predicted at the time of the initial iPad announcement, my electronic briefcase. I rarely take a briefcase or even my Macbook when out of my home office, just the iPad. Applications such as Skype for iPad (and even Facetime) are an extension of the iPad’s functionality “beyond the briefcase” into user engagement. (Although I do seem to recall often carrying my mobile phone in my briefcase.)
• The tablet provides an ideal form factor and display size for a video call on a mobile device; easily carried about; no squinting to see the video (unless in direct sunlight). With its much larger battery, it will be interesting to see Skype for iPad’s impact on battery life. Once experienced by consumers Skype for iPad could help accelerate iPad 2’s sales growth.
• The cnet review, linked above, covered Skype for iPad’s performance over WiFi (excellent) and 3G (good enough). However, recently I dropped my iPad 3G subscription with Rogers when iOS4 became available on my iPhone. When I want to connect my iPad over a 3G connection, I simply turn on the iPhone’s Personal Hotspot and use the iPad’s WiFi via the Personal Hotspot as my only Internet connection. It will be interesting to test reception of a video call on my “original” iPad over this connection.
• While obviously the audio can be handled over the iPad’s 3.5mm audio jack, it should also work with USB headsets via the iPad’s Camera Connection kit as the USB adapter.
• One key assumption: given the support on Skype for iPhone, Skype for iPad should be expected to supports Skype’s SILK codec on Skype-to-Skype calls.

Finally, if I had an iPad 2 I could see making the iPad as my primary Skype device. It won’t be hindered by having multiple applications running as on a PC and it’s a very convenient overall form factor. And it’s easily portable with no cables attached. In fact it becomes closer to a large desktop phone (for the same reasons Bria for iPad can become a business desktop phone replacement). Let’s come to that decision once we’ve had actual experience with Skype for iPad.

Hopefully, as rumored, we’ll see Skype for iPad become available about the same time as Skype’s Jonathan Christensen speaks on Tuesday at eComm America 2011.

Final question: is there a hint there of having the same call bar as Skype 5.5 beta for Windows? That would be a contributor to consistency in the user interface.

Related articles

• Skype for iPad coming next week? (intomobile.com)
• Bria for iPad: Putting an IP Phone on the iPad (voiceontheweb.biz)
• Using Skype on iPad – Helping Navigate Canada’s Newest Air Travel Service (voiceontheweb.pmlo.org)
• Skype is coming to the iPad (gigaom.com)

Last month’s announcement of Microsoft’s acquisition of Skype certainly triggered speculation, misplaced blame and other conspiracy theories on the blogosphere. It often sounds like a reporter wants to use Microsoft as the most convenient excuse for a post or article. It’s superficial, to say the least. Until Microsoft completes the acquisition, Skype operates as an independent but fully operational company, complete with warts.

Having participated in the major restructuring of a NASDAQ-listed company (and some subsequent acquisitions) and the acquisition of one of my previous clients by a NASDAQ-listed companies (as well as having supplied due diligence information for acquisitions of some of my previous employers’ customers) I’ve had a chance to walk through these exercises.

This post is simply my perspective on the challenges involved in closing such a deal and the short term benchmarks I am looking for in order to measure the impact of the acquisition.

First, some public facts,

• Last fall Skype announced the appointment of Tony Bates as its new CEO. Tony brings many years of business leadership experience with a major (and disruptive) player in the IP-communications space. He has certainly participated in, or been an observer to, some of Cisco’s acquisitions.
• Skype signed a long term lease for new office space in Palo Alto and moved there last December.
• Skype has been on a hiring spree for the Palo Alto office with respect to product managers and developers/engineers.
• On May 10, 2011 Microsoft and Skype announced that Microsoft would be acquiring Skype for $8.5 billion, acquiring a Luxembourg-based company, using cash that Microsoft has kept in Europe (or at least has not repatriated to the U.S.).
• Microsoft has built up a significant Bay Area presence at its Mountain View campus and is in the same time zone as Redmond.
• Last week the FTC filed a notice of early termination, without comment, effectively announcing there would be no objection on their part to closing of the deal.
• Until the deal closes, Skype CEO Tony Bates is and remains in charge, making the key decisions re ongoing business operations; it’s still an independent company reporting to its current investors. (Microsoft could incur legal liability were they to interfere in Skype’s decisions prior to the close.)

Today has seen a plethora of third party posts about executive changes at Skype. However, in the course of an acquisition by a publicly listed company, Skype’s hands are tied by the securities regulators as to what they can say. The only response has been “As part of a recent internal shift, Skype has made some management changes”. On the other hand my first hint of change came when one executive wrote two weeks ago, in his Skype Mood Message, to the effect that he would not be anywhere near Palo Alto at least until August 1.

We spoke with one [current investor] just now who reiterated what other unnamed investors have said in the press this morning: That the decision was 100% Tony Bates’ call. Until the Microsoft deal closes, he has to run Skype like a stand alone company, and these were all executives he’d been considering firing for performance for some time. The timing had more to do with how long it took to go through the process than anything else, this investor said.

And, he noted, that these were all people on the business side of the house, not the technical side of the house. That indicates he was trying to fix part of the company [that] wasn’t working, rather than a wholesale firing of people who stood to get big payouts.

But I’ve seen all this before at other restructurings and acquisitions. In the course of closing the transaction C-level management figures out – some before the close, some after:

• the resources you need and what is duplication, what needs to be merged
  • what is critical to maintaining Skype as an independent business unit and the internal business relationship with other Microsoft business operations
  • how to maintain a culture that encourages innovation and nurtures employee morale
• what policies need to be brought into line with respect to human resources, financial reporting, IT services. marketing and other corporate infrastructure services
• performance of due diligence on all contracts, agreements and outstanding legal disputes – this is the most challenging aspect as these will always raise issues that need to be resolved before closing – and
• clearing regulatory hurtles. While the U.S. FTC has cleared the transaction, there would have to be some EU regulatory clearance required, given that the actual transaction will occur between a European registered company (Skype LLC) and a European subsidiary of Microsoft.

But overriding through all this is the need to not only continue the Skype business operations but also determine how to put together the team and resources that will grow the business. Of significant importance is ensuring the ongoing business operations – as measured by revenues and expenses – do not impact the initial financial basis for the transaction at the time of close.  When I was involved in a restructuring and an acquisition the final question that had to be answered for any of my proposals was the impact on sustaining and growing the business.

In particular, Microsoft CEO Steve Ballmer will be under tremendous pressure to have success with Skype. After all, there is an $8.5 billion investment – the goal has to be both to recover this amount as profits and to generate shareholder return on the investment. This is achieved by not only continuing and enhancing the current user experiences vertically with upgrades and new services but also leveraging Skype technology through horizontal integration  into Microsoft Office, Lync, and Windows Live offerings. The bottom line is that any decisions during the transition and going forward will have to provide answers to that ultimate goal. And, if Tony Bates is to remain President of the Skype business unit at Microsoft after the close, he is going to have to live with his decisions during the closing period.

My real short term benchmarks will be Skype’s delivery of new and upgraded products over the next few months. Here’s what’s on the line:

• Developing a Skype for Mac 5.x that addresses a plethora of user interface issues, the most important of which is making the user interface consistent with the Skype for Windows 5.x user interface.
  • Skype Journal has an update on the Skype for Mac chat style contest.
• Evolution of Skype for Windows – beta version 5.5 with deeper FaceBook integration announced this morning.
• Launch of Skype for iPad – an iPad-specific version that takes full advantage of the iPad’s display format and iPad 2’s video features – a heavily used Google search keyword is “Skype for iPad” -  demonstrating the demand and expectation is there.
• Upgrades to Skype for iPhone (restoration of the keypad on Skype-to-Skype calls) and Skype for Android.
• Launch of Skype for Windows Mobile 7
• Launch of third party applications and hardware that incorporate SkypeKit
• Skype for Business customer success stories; we simply have not seen any since the Skype Connect launch last fall.
• Actual launch of announced services such as: Go To Meeting integration for collaborative desktop sharing, Skype for TV for Comcast cable customers.

Bottom line: It’s real easy, and naive, to blame Microsoft for recent outages and other Skype service interruptions.  When it comes to the Microsoft acquisition of Skype, we are simply going to have to wait out the process – securities regulations place limits on how much information can be made public. Investors and users have to hope the right business decisions are being made during this period; it’s really a matter of C-level management bringing the appropriate skills and experience to the table. This is a situation where trust in the C-level executives to make the right decisions is paramount. In the interim, Skype remains an independent business operation with its CEO in total charge.

But at least the above benchmarks provide some short term benchmarks that are indicators of how Skype will continue to support and upgrade services to its user base. And these benchmarks contribute to passing the ”AmberMac” test.

Update: Shel Israel expresses his perspective in Microsoft Acquires Skype.

Related articles

• Steve Ballmer & Tony Bates Talk About Skype-Microsoft Deal (gigaom.com)

Skype Premium upgraded for North American users along with an early summer special offer.

While I did some testing of Skype Group Video (on both Windows and Mac) during its beta period last fall, yesterday I hosted my first “business meeting” Skype Group Video call with a mentoring group in which I participate.They had been using HotConference, a push-to-talk collaboration service where only the speaker is on video, but the service went down in the middle of a weekly conference call. So I created a Group on Skype and launched a Skype Group Video Call.

Most noticeable was that the dynamics of the video conference call changed somewhat:

• Whom we saw: we could see video of each of the participants (except one who had no webcam and one who had Internet connection issues – they were audio only)
• Ad hoc and informal: Anyone could start speaking at any time without the “pregnant pause wait” that is inherent to a push-to-talk service.
• There is a blue halo around anyone who is actually speaking (see Megan in the image below)
• Change video image size: One of the participants wanted to demonstrate his new beach accessory. We could blow his image up to a “full size” while the others remained on the screen in small images (scroll to end to view).

The major feedback from this call – the participants did not realize that Skype Group Video could be so effective and powerful yet so easy to set up. There is definitely a need to generate first-time user experiences; Skype’s challenge remains building market awareness of the effectiveness and power of the group video calling experience.

A seven day trial is available; but somehow its awareness generation needs to go viral. (I do notice that launching skype.com these days does feature Skype Premium on the “Home Page” – at least for U.S. and Canada site visitors but experiencing it in operation is everything.) Certainly one member of that discussion was going to purchase a Skype Premium subscription as a result of this experience.

Where’s the Skype Chat pane?

One feature that gets lost when, on launching a voice or video call, the big black blind comes down to show who is on the call. Any other feature available during the call is left to guess from the icons on the call bar. Yet a complementary live chat session has become critical for any conference call these days, whether voice only or video.

This group missed out on the function of the blue icon third from the right which will open a (Group) Chat text entry pane. The chat session content can be seen by all call participants during and after the call. Several participants on this call were not aware that you could expose the chat session when I wanted to share a URL associated with our discussion. Just reinforcing the point made in my post on this topic yesterday.

One other hint that may encourage trials: while Skype Group video supports up to ten participants on a call, only the host needs to have a Skype Premium subscription. A Skype Premium subscriber may also receive a 1:1 Skype video call from a non-subscriber; the Subscriber can then Add Contacts to the to build up a Skype Group Video call.

Skype Premium Update

Skype Premium has always included Group Video Calling and Live Chat support. Recently Skype announced changes and a special offer (expires July 31, 2011) to its Skype Premium service for North American customers:

• Added unlimited calls to U.S. and Canada if a 3- or 12-month subscription is taken out.
• Offering 50% discount on a 12 month subscription and 25% discount on a 3 month subscription to July 31, 2011.
• 25% discount on a FaceVsion N1 HD video webcam.

Bottom line: at $4.50 per month the incremental cost for Group Video Calling beyond the basic 12 month Unlimited North America Calling Plan Subscription becomes $2.00 per month. While there is no benefit for those of us who already have paid for this calling plan or have a Unlimited World Calling Plan, it may be an incentive to drive the Group Calling user experience by Skype users who have been wary of the $8.99 per month cost. Now they can get to experience the power of Group Video Calling at a very low cost; once experienced they won’t go back.

And here’s the re-configured Group Video Call screen when Kurt demonstrated his beach accessory (Kurt found that a hard floor is not as comfortable as a sandy beach):

Count Almaviva in Barber of Seville, Apr 2007

When I’m in my home office I’m often tuned to Toronto’s Classic 96.3 FM which has become a classical radio station success story in southern Ontario. About six weeks ago on a Friday afternoon I picked up the last half of Alexa Petrenko’s interview with opera tenor Lawrence Brownlee who, at the time, was performing the role of Don Ramiro in Rossini’s opera La Cenerentola (Cinderella) with the Canadian Opera Company at Toronto’s relatively new Four Seasons Centre for the Performing Arts.

Lawrence is the true embellishment of a Skype addict; you’ll see why when you watch the interview. Most interesting is his statement “Skype – it’s an invention that is kind of like the wheel. How did people ever do without it?”

http://www.youtube.com/watch?v=uum6CWyEqPw

These are the stories that demonstrate the true impact of Skype and its ability to build and reinforce relationships.  Sounds like Larry and his wife spend a lot of time with a Skype video connection, even if they’re not talking. And it would certainly help to relieve the tedium of long term hotel stays.

Larry’s voice will test the dynamic range of any PC, smartphone or tablet speakers. In fact, only Skype’s SILK technology would come close to transmitting the true quality of his voice were he to be singing over a Skype call. To get a sampling of Larry’s tenor voice here’s one of his previous performances in the same role:

http://www.youtube.com/watch?v=Rdz6yVm2IJs

Acknowledgements:

• Background music: With Corrado Rovaris, conducting Members of the Metropolitan Opera Orchestra, Tucker Gala – Avery Fisher Hall, NYC, October  26, 2008 (from multimedia page on Larry’s website).
• Photograph: Lawrence Brownlee in his Metropolitan Opera debut as Count Almaviva in Il barbiere di Siviglia (Rossini’s Barber of Seville) on April 26, 2007. Photo by opera photographer Ken Howard.
• And a special word of thanks to Larry’s publicist, Karen Kriendler Nelson, who has been most supportive in arranging the interview and follow-up.