While attending CES 2011 back in January, I spent an afternoon visiting the main television vendor floor where 3D TV was definitely the number one topic of interest; however, I found, and reported on, several vendors with display kiosks demonstrating Skype for TV.

Michael Wolf, at GigaOm’s NewTeeVee, recently brought renewed visibility to the Skype for TV initiative in his post: Could Skype Be Microsoft’s Smart TV Trojan Horse?.   Frankly, from my learnings that afternoon,  his view about a role for a Windows OS on TV’s is baseless; it pays to look at the hierarchy for enabling Internet services on the TV’s.

One common trend I observed in visiting these booths is that all the vendors have embedded as firmware a complete Internet-enabling smart platform that provides access to various “cloud” applications. Social networking services such as Facebook and Twitter are the most obvious. Amongst other applications are several involving movies, such as Netflix, and sports offerings, such as NHL and ESPN Sports Center.

Skype, of course, was on at least six vendor offerings, using its SkypeKit platform, initially available for the Linux OS. In fact, Panasonic includes a dedicated Skype button on the remote controller for their Skype-enabled TV’s and BluRay players.

Behind all this I learned how the TV vendors are embedding these platforms. It’s a case of having the platform software embedded into the TV’s firmware and hardware, then layering the applications on top of the platform. Given that SkypeKit is behind Skype for TV it appears that they are using a Linux-based operating system. Certainly there is no room, given the current state of these offerings and time frames involved, for an embedded Windows.

On the other hand Skype for TV will bring to Microsoft exposure to experience with integrating applications onto these platforms. Windows Live services would be an obvious candidate for integration into these TV platforms. After all we do have Windows Live Messenger access on various smartphone platforms such as BlackBerry and iOS4.

And one should never lose sight of the network effect. Skype for TV video calls can be made to over 170 million active users who may be on any of several platforms – PC’s, iPhones, Android phones. One of my first benchmarks for how Microsoft will deal with its Skype acquisition would be the introduction of a unique Skype for iPad. This would be an application that would allow video calling on the iPad 2 taking full advantage of the iPad 2’s display size. It has nothing to do with Windows or Office but rather providing new user experiences using resources at hand.

Bottom line: It’s not a case of will Microsoft attempt to displace other OS’s on TV platforms with a derivative of Windows – that opportunity has passed them by. But rather the strategic opportunity lies in merging Skype’s experience with introducing a real time communications application onto TV platforms with Microsoft’s existing Windows Live experience on other platforms.

Michael also questions whether Google TV will be a competitor. In the end consumers want as few boxes as possible combined with ease of operation. If all the services, broadcast TV and Internet applications can come via one “box” the market for add-on boxes on home entertainment systems will eventually evaporate. How many HDMI connections will be tolerated by the average consumer?

Related articles

• Microsoft Acquires Skype – The “Amber Mac Test” (voiceontheweb.biz)
• Microsoft Acquires Skype – A Most Interesting Marriage (voiceontheweb.biz)
• The End of the “Skype as Bandit” Era (disruptivetelephony.com)

When I interviewed Skype CEO Josh Silverman at CES 2010 in January, I had asked about the timing for a Skype IPO. Josh’s response:

“We’ll see. We don’t have a timeline for it. Our focus is to build a really great company. When we’re ready and the markets are ready, we’ll consider an IPO. At some point investors will want an exit, of course, but they’ re really taking  a long term point-of-view. This is not a quick flip; this is about building one of the great companies of technology.”

Today “long term” was defined as something between nine and fourteen months. Nine months after being taken private by an investment group lead by Silver Lake, Skype announced, through a blog post by Josh Silverman, they had filed a preliminary prospectus for an IPO. With a road show and other pre-IPO activities we’re probably three to five months from seeing the final transaction happen.

The prospectus makes for interesting read about both Skype’s business model and the communications infrastructure transition wrought by new technologies. Key Skype performance data includes:

• 2010 Jan-Jun revenues of $406.2MM vs same period 2009 of $324.8MM, an increase of 25.1%
• “Adjusted” EBITDA increase by 59.3% from $75.2MM to 115.8MM over the same periods
• $37MM in capital expenditures budgeted for 2010 vs $13.5MM spent in 2009

and some interesting user data:

One should really think of “Registered Users” as “Registered Accounts”. Especially with Skype for Business becoming more active, there will be a rise in accounts but lots of reasons for stagnant or dead accounts. (Personally I manage, via Skype Manager, over 25 accounts with about 15 users but really only use two of them for my own ongoing activities. The other users were created for one or more business activities and )

Most interesting are the “connected users” numbers, defined as “average monthly number for the three months ended [on] the date [shown on the x-axis]”. While Skype is showing a current number of 124 million“connected users” for the quarter ended Jun30, 2010  Hudson Barton’s “real users” number – which is more an indication of daily users on line is currently running at about 60 million.

The increase in paying users is the most significant number of interest. The prospectus confirms that SkypeOut represents Skype’s number one source of revenue and this number is the best indicator of how quickly these revenues can grow.

One other interesting metric relates to calling minutes, broken down as”

• Communications services billing minutes (SkypeOut minutes): from 5.0B in H1 2009 to 6.4B in H1 2010, a 28% increase somewhat consistent with the revenue increase, and
• Skype-to-Skype minutes: from 49.1 billion in H1 2009 to 88.4 billion in H1 2010, a 80% increase confirming that “free” really is the key marketing strategy for increasing Skype users and Skype usage.

Bottom line: Skype continues to grow at double digit rates but they are about to enter a phase where marketing activities and business communications services will become vital to sustaining its growth. Yet, regulatory and competitive issues will also become a significant factor and a real test of how willing governments are able to adapt to technological change as opposed to sustaining cost-inefficient legacy telecommunications operations whose fundamental business models are threatened. For the first time, we’ll be able to view quarterly the business success of Skype as an independent business operation.

There’s lots of other interesting marketing information and financial data in the prospectus but that leaves room for additional posts. And the statements re regulatory issues have the makings of several discussions.

Note that while $100MM has been put out as the amount to be raised, it was apparently only used as a metric to assist with determining SEC filing fees. The actual amount to be raised has yet to be announced.

Other posts:

• Dan York, Disruptive Communications: Skype, less than a year after eBay sale, files for $100 million IPO
• Business Insider SAI: Skype Spent $343.8 Million To Acquire Its P2P Software From Founders
• Andy Abramson, VoIP Watch: Skype To Go Public makes a couple of interesing points:

Now, going public brings with it a whole new set of responsibilities, not only SEC quarterly reporting.

For Skype’s lead investors, Silver Lake Partners, this is their opportunity to cash out. For many of the employees at Skype this is their chance for a nice reward for all the hard work they’ve put in over the past year.

• GigaOm: Skype Files for IPO

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• Skype Going Public With $100 Million IPO (thenextweb.com)
• Skype files for IPO (theglobeandmail.com)
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• Internet calling service Skype files for IPO (sfgate.com)
• GIPS, Google and All That Co-opetition Jazz! (voiceontheweb.biz)
• SkypeKit: “Naked” Skype Support Arrives for Hardware-Embedded Skype and PC Applications (voiceontheweb.biz)

Over the past week I have been experimenting with two relatively new features that build out the Skype video experience:

• HD video using the recently released FREETALK® TALK-7140 HD webcam and Skype for Windows 4.2
• Skype Group calling using the beta release of Skype for Windows 5.0

FREETALK^® TALK-7140 HD Webcam

At a price point that makes it attractive even for Skype High Quality Video calls (VGA resolution @ 30 fps), the FREETALK^® TALK-7140 HD Webcam:

• Enhances the video image quality to HD’s 720p resolution at frame rates up to 22 fps, provided the Sender has sufficient Internet upload bandwidth (>1.2 Mbps).
• Requires 30 seconds to four minutes at the beginning of a call to come up to HD resolution; after some initial “network negotiation” by the connecting software the aspect ratio changes from 4: 3 to HD’s 16:9.
• Works with Skype’s High Quality Video calling where end point conditions do not provide sufficient bandwidth for HD calling.
• Falls back to lower resolutions when network conditions degrade as a result of Skype’s network bandwidth adaptation feature that adjusts video resolution to network conditions. But the image will self-restore to the maximum resolution if the network conditions recover and return to improved quality.
• Is Skype certified for HD Video and High Quality Video calling.
• Is recognized as a webcam by MacBooks and iMacs; however, currently will only operate on MacBooks at up to VGA resolution at up to 30 fps until Skype releases a new version of Skype for Mac that supports HD video calling.

The image to the right comes from a half hour, two-way HD call with TechCraver’s Jason Harris who had an upload speed in excess of 4Mbps while I was supported by a network upload speed of 1.8Mbps using Rogers recently introduced DOCSIS 3.0 Ultimate service (50 Mbps download, 2 Mbps upload). Expanding the image to a full screen display (22” in my case) gives a close-to-Telepresence experience.

Note that if only one Sender on a one-to-one video call has the upload speed to support sending HD video, the recipient, if also using Skype for Windows 4.2 or later, will be able to receive and view the full 720p HD image provided his/her download speed is above 1.2 Mbps – well below the download bandwidth maximum for most broadband Internet services.

So this brings up the issue of upload bandwidth speeds available to consumers. Om Malik had something to say on this subject in a recent post, Faster Upstream Speeds for Cable Broadband:

U.S. cable companies expect that by 2015, nearly 100 million of the nation’s homes will be able to send data upstream at speeds of around 20 Mbps. This will eventually be followed by further upgrades to 50 Mbps, by way of enhancements to DOCSIS 3.0 tech. That compares to current upstream speeds of 6-28 Mbps (shared).

So we don’t need to wait for Fibre-to-the-Home if you’re on cable. As mentioned above, Rogers now offers a 50Mbps download/2 Mbps upload DOCSIS 3.0 service for which they recently reduced the price by 1/3 to under $100 per month with a 175 GB/month cap. Bell Canada is introducing a 25/7 fibre-to-the-home service for $54 per month but with only a 75 GB cap; their current issue is coverage. Whereas it’s available in central Toronto, there is only limited availability around the suburban Toronto area. In the U.S., where available, Comcast is offering DOCSIS 3.0 services with up to 10 Mbps upload speeds but have services at 2 and 3 Mbps upload as well; also Verizon offers its FIOS Fibre-to-the-Home service. This scenario recalls the era ten years ago when broadband Internet services were rolling out sporadically over a three to four year period.

I’m still experimenting with the HD webcam and will have a more complete report once I have experience with a wider range of user endpoint conditions. The TALK-7140 HD webcam is available at the Skype Store.

Skype Multi-Party Video Chat (beta!)

In a separate post I’ll deal with Skype Multi-Party Video Calling; in the meantime check out Phil Wolff’s posts on this subject at Skype Journal and Andy Abramson begin_of_the_skype_highlighting     end_of_the_skype_highlighting’s Skype Multi Party Video Makes Others A Thing of The Past at VoIP Watch. As shown in one of Phil’s posts, I participated in a five party call for about fifteen minutes simply to ensure I had a configuration where it would work.

Caveat: Skype for Windows 5.0 is still beta software and needs user feedback and some work prior to any final release; it’s not suitable for ongoing production use at this time.

Bottom line: we’re seeing how far video calling can be pushed with respect to video resolution and multi-party video chat sessions; it’s still early days. For full realization of the potential of video calling we need implementation of faster Internet services for both consumers and SMB’s with reasonable pricing. Also we need more experience and development of the underlying video calling software and hardware, especially when it comes to the User Interface. In the meantime VGA resolution video calling (High Quality Video) remains a quite acceptable user experience – especially when it’s free.

Full disclosure: In Store Solutions, producer of the FREETALK line of Skype hardware, has become a client of Denali InterConneXions, publisher of Voice On The Web, building on the author’s previous business development experience with establishing partnerships that can assist with the promotion of a primary vendor’s offerings. A more complete statement will follow shortly.

Some posts from the High Quality Video launch in late 2007:

• Installing a Logitech High Quality Video Camera: The Experience.
• High Quality Video: What’s the Benchmark?
• High Quality Video: Definitely a Winner for Skype
• Click here for more…

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• Time Warner Cable to Boost Broadband in Texas, Ohio and New York? (gigaom.com)
• AT&T’s U-verse gets 24Mbps downloads (news.cnet.com)
• Skype for Windows 4.2: Enhancing the Skype Call Experience (voiceontheweb.biz)
• CableLabs announces 5Gbps cable data technology (feldmanfile.blogspot.com)

So it’s finally resolved. The Skype spinout from eBay will involve Skype’s founders as investors and board members while contributing a cash investment. Skype finally owns the core intellectual property required for Skype to operate at its current cost levels. eBay gets the cash they were looking for but 5% less of the new Skype. Canadians still get to invest $16.75 each through the government operated Canada Pension Plan. Marc Andreesen gets involved with another major Internet play. Mike Volpi and Index Ventures are out of the picture. Lawyers and consultants are probably heftily rewarded for all the litigation activity leading to the final resolution. Incessant speculation on Skype Journal’s Skype 5.x Public Chat about how to get around JoltID’s Global Index software will finally cease (well, maybe).

While I have put links to several posts leading up to the resolution below it has been most interesting to read various bloggers comments on the resolution and the future direction for Skype:

Phil Wolff at Skype Journal sums up the numbers in his post, Sold! The Bullets and values the JoltID intellectual property at $275 million. (Phil gets credit for the graphic above, by the way.)

Om picks the winners and losers on My Thoughts on the Skype Settlement: Winners & Losers Scorecard. He points out the “great spin quote” from Silver Lake as a leftover from the “PR spin” days prior to the transparency that comes with social networking. Come on, guys. We’ve all seen the depositions and emails. As for the future, Om comments:

No Silver Lining?: One person who I totally feel for is Silverman, the current CEO of Skype. He gets to run a company which will have the looming presence of its founders.

Whatever the press spin might say, the new investor group is like a poisoned well. It will be a polarized group, always looking over their shoulders. Silverman is going to need to keep a lot of people happy, and those board meetings with nearly two-dozen people aren’t going to be fun, either. But as Biggie Small once said:

“It’s like the more money we come across, the more problems we see.”

Both Kara Swisher at All Things Digital, in All Is Forgiven: “It’s a Clean Slate,” Says Andreessen About Lawsuit-Mad Skype Co-Founders, and Dan Primack at PEHub, in 5 Skype Questions for Marc Andreessen, interviewed Marc Andreeson of Andreeson Horowitz. The common statement about his relationship with Niklas and Janus:

We have not been in business with them before, so we don’t have any baggage at all. Our view is that they’re two super-creative founders. We’ve known lots of legendary founders, and they are all different and have things that make them unique. We include ourselves in that from past experiences. We view ourselves as a pro-founder firm, so we like the idea of founders being involved. It’s a net positive.

Martin Varsavsky. CEO of FON, a company partially financed by many of the same players in the Skype sale, restricts his comments to his thoughts on the future of Skype – where is Skype vulnerable?, where are its strengths? – in Why it may make sense to buy Skype back. His overriding statement:

Skype is simple. Michael Arrington and all of Silicon Valley may find Google Voice amazing but is the average global citizen ready to use it? Massively use it? You download Skype, you find your friends on Skype, you talk. And, if you don’t find them, you Skype out. And when you talk you can also do video. I LOVE video calls on Skype. I used to use them for people I really cared about, relatives, close friends. Now I even do business calls on video with Skype. It just gives you more of a sense of what is going through the other person´s mind. And Skype is the leader on video quality. So simplicity plus video may be a good way to beat flat plans from telcos and avoid being Tivoed. If the video services can migrate to mobile phones Skype is on to something.

Andy Abramson, in The Skype Suit Is Settled-Now Business Can Get On, comments:

I’m just glad the suit is settled between eBay and Skype. Now a lot of things that have been held back can finally move forward. In many ways the settlement is a good thing. The return of the original founders means disruption will continue, and new ideas will flourish. It also means Skype as a business or brand will now have a chance to prove its worth.

Alec Saunders, in eBay’s big mistake; Why the JoltID license was inevitable, concludes:

The lesson in all this? Deals involving technology licenses and acquisitions are common in business. When acquiring a technology asset, buyers must acquire the necessary control needed in order to protect the business.  Either buy, or license in perpetuity, what you need to prosper. Unless your intent is to immediately begin work on a substitute technology, a license for core technology that needs renewal is a sure way to find yourself caught by the short-hairs in a future negotiation.

The bottom line is that Skype is now in a position to focus on building future communications software and services without the distraction of depositions, legal wrangling and media curiosity. Provided he can navigate through a 23-member board with diverse interests and experiences, Josh Silverman can build the real communications software business of providing infrastructure for conversations while having a wealth of technology and business connections available in an advisory role.

Previous Posts:

Om’s trail:

• Skype, Founders Settlement in the Works (Nov. 1)
• Further Details Emerge As Skype & Its Founders Close to Settlement (Nov. 3)
• Skype Founders Fight Their Way Into the New Skype (Nov. 5)
• My Thoughts on the Skype Settlement: Winners & Losers Scorecard (Nov. 6)

Kara Swisher (All Things Digital):

• Volpi and Index Ventures Out of Skype Deal, the Lawsuit-Happy Founder Twins In (Nov. 3 with lots of links to related stories)
• I Love the Smell of Settlement in the Morning: Skype Founders Set to Get 10 Percent, Option to Buy Three Percent More and Two Board Seats (Nov. 3)
• All Is Forgiven: “It’s a Clean Slate,” Says Andreessen About Lawsuit-Mad Skype Co-Founders (Nov. 6)

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• Skype soap opera ends as founders set to regain stake ahead of $2B sale (dailyfinance.com)
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• Skype Cofounders Will Be Part Of Buyout Group; Index Ventures Is Out (paidcontent.org)
• Skype Founders Re-Found in Settlement (marketingpilgrim.com)
• Skype founders win back share (guardian.co.uk)
• Andreessen On Skype: “This Is One Of The Most Important Companies On the Internet.” (techcrunch.com)
• eBay’s Skype sale gets go-ahead with settlement (news.cnet.com)
• Confirmed: Skype Founders Settle With eBay And Others, Get 14% Stake In Skype, Not 10% (techcrunch.com)
• Skype Settlement: Zennström And Friis Have Won It Again (paidcontent.org)
• 17 Million Canadians Will Have an Interest in Skype’s Success (voiceontheweb.biz)

OK, now I have your attention with a headline different from the “Skype sold for $2.75 billion” headlines so rampant in the blogosphere yesterday….

By now the web has been saturated with stories about yesterday’s announcement of the forthcoming acquisition of a 65% controlling interest in Skype by a consortium of investors, led by SilverLake Management LLC and including a $300MM infusion from the Canada Pension Plan Investment Board. At this point the main story is “old” news but a few comments:

Who is Canada Pension Plan Investment Board?

Since 1965 every employed Canadian contributes a % of their employment income (up to an annual income cap of about $37,000) to the Canada Pension Plan (“CPP”). Between the age of 60 and 65 qualifying Canadians can elect to receive a (taxable) monthly payment from this plan until death along with a “death benefit” to the deceased’s estate. The Canada Pension Plan Investment Board …

… is a professional investment management organization based in Toronto. Our purpose is to invest the assets of the Canada Pension Plan in a way that maximizes returns without undue risk of loss. The CPP Fund is $116.6 billion. Canada’s Chief Actuary estimates that CPP contributions will exceed annual benefits paid through to the end of 2019. Thereafter a portion of the CPP Fund’s investment income would be needed to help pay CPP benefits.

Over 17 million Canadians currently participate in the Canada Pension Plan either as contributors or recipients. So we each effectively have a $16.75 investment in Skype.

And Canada, with its own geographical challenge of servicing a market where 90% of the population lives within 160 km (100 miles) of the 6,000 km (4,000 mile) long Canada-US border, continues its long history of having an interest in communications innovation.

Why was there no Skype-eBay synergy?

Meg Whitman made the same mistake I witnessed at a previous employer where the CEO and Board bought up companies but never got “buy-in” within the acquiring company of any major acquisition that required a rethinking of the overall company business focus and execution.

As a result there were no internal champions within eBay for executing on the stated intentions of the Skype acquisition. And the statements of the day demonstrated that eBay senior executives (and Board) did not understand a basic principle of auctions – there is no role for “conversational negotiations” during an auction; this is critical to maintaining the integrity of the auction process. You see the goods and make a decision as to whether or not you want them badly enough to pay the final auction price; the auction process itself is the “negotiation” of a price. Bidders have no opportunity (and do not want) to communicate with sellers; the auctioneer (in this case eBay) is simply a neutral third party who moderates the transaction to establish a price.

Why is eBay still an investor?

Back in the spring when a potential IPO was announced, we learned that eBay expected to continue to have a minority interest in Skype. With a $1.9 million cash infusion and a remaining 35% interest, eBay can still hope to recover, over time, the approximately $3+ billion it has to date spent on the Skype investment four years ago. At the same time it allows eBay executives to focus totally on getting their struggling “markets” business back into a growth mode.

With this strategy eBay can assuage Om’s concerns in Skype Sale Nears: Why eBay Shareholders Should Be Mad. As a sequel, once the sale was confirmed, Om states:

So Donahue gets to say that he got the higher valuation of Skype, got rid of a potential legal nightmare and can get any upside that comes with the initial public offering of the stock. Seems like a win-win, but that IPO — don’t count on it. To be honest, this deal makes much more sense compared to all the rumors that were floating around earlier. [My italics]

What are the positives about the acquisition?

#1 – Keeping the current executive management team. In his eighteen months as President of Skype, Josh Silverman has brought a lot of business process and experience into the company with the result that business processes and programs are being built to build sustainable and increasing revenue streams. Two recent examples of this are the availability of the FREETALK Everyman headset designed to improve the user calling experience at a very low cost and yesterday’s launch of Skype for Asterisk. Expect much more activity and announcements along these lines of building a stronger Skype ecosystem during the fall. This momentum can only be sustained with a continuation of the current executive team. Skype needs to focus on execution at this point; it does not need any further high level restructuring activity to distract from execution.

Two statements confirm this is the case:

• Josh’s own post, A new chapter, concludes describing “a new group of owners who believe passionately in our mission and in the ability of our team to deliver on it”.
• Egon Durban, Managing Director at SilverLake, states: “Josh Silverman has done a strong job leading the company and we look forward to working with Josh and his team to grow the Skype franchise.”

While there are some “technology heavyweights” becoming involved as investors, the real challenge is to build an effective and synergistic relationship between those “heavyweights” (who will probably become board members and/or advisors) and the current management team. This is where corporate culture and value sets, as established at the executive level, can play a strong role in leaving individual managers the freedom to execute on their goals most effectively.

What are the gotcha’s?

• Resolution of the patent dispute with JoltID. No deal would have been done without some understanding of the part of the new investors of the outstanding issues and prospects for how this issue can be resolved. On the other hand, with the experience of the various new investors, many heads can be brought into the negotiation of a resolution. My take: this will never reach the High Court trial scheduled for next spring.
• Why the $125 million note? My guess: it’s escrow funds to cover costs arising with any litigation issues that may arise in closing the deal. Is a first guestimate of a settlement with JoltiID in the range of $100MM? Can Skype develop a replacement for JoltID’s  infrastructure technology so critical to Skype’s business model for under $125MM? Again from Om:
  

  If you think about it, what Donahoe just did was follow the golden rule of business: If you’ve got a problem, make it someone else’s problem. And the problem for the new buyers is that the legal issues of Skype are not going away. Some of my smart friends think that Skype can sidestep these problems by switching to a SIP-based infrastructure, but I won’t hold my breath.

  Any SIP-based infrastructure would sharply increase the need for building a massive global infrastructure. It would also mean working with partners (that make Skype devices) to re-configure their products and getting 400 million-plus users to switch to a massive new model. In other words — like skating in the middle of a semi-frozen lake underneath a brightly shining sun.

• Employee motivation: what will be the stock option opportunities for employees now that Skype has effectively gone private?
• Financial reporting news: by effectively going private, Skype also has no investor reporting obligations. On the other hand if these investors intend to exit via an IPO in a couple of years, they must provide some level of financial reporting. (By being a minority investor, eBay no longer needs to report on its Skype investment any more that it does on its craigslist investment.)

What do Canadians want?

Now that 17 million Canadians have an investment in Skype can we expect to get;

• Skype Online numbers? Canada’s 911 regulations provide a roadblock. (Note to CRTC – when lightning struck my home’s Rogers and Bell communications lines two weeks ago, for four days Skype was my only landline service.)
• Skype for iPhone? Requires resolution of a G729 codec patent issue. (Sorry folks, it’s not a Rogers issue.)
• Skype for BlackBerry? Given that Research in Motion has become Canada’s leading technology company.

Bottom Line: With this acquisition Skype is finally free of what Andy Abramson describes as “an extremely conservative, bank-like culture”. Yes, Andy, “Skype is about the democratization of voice”; I would extend this to say that “Skype is about the democratization of conversations – whether voice, chat and video”. I certainly look forward to innovation and a much stronger Skype ecosystem as a result of this change of ownership.

Other posts of note:

• Omar El Akkad provides a great summary overview in today’s Globe and Mail: EBay hangs up on Skype Strategy.
• Globe and Mail Report on Business: What is Skype and Why is it important?
• Om Malik on GigaOm: Skype Sold for $2.75 Billion
• Andy Abramson at VoIP Watch: (after the announcement) Skype Sold, JoltID Suit Still Remains In Place As of Now; (adding to speculation prior to the announcement) Is Skype in Play?
• Update Sept. 4: Dan York, on returning from IT Expo adds his comments in Onward the disruption – Skype’s sale to private investors is a great step; includes Phil Wolff’s Skype Journal graphic showing the ownership post-acquisition based on Om’s reported numbers.

And previous Voice On The Web Posts;

• The Skype IPO: “It Ain’t Over ‘til It’s Over”
• Skype – eBay: Passive Separation

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• Skype sold: it’s all about risk mitigation. (saunderslog.com)
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• Skype – eBay: Passive Separation (voiceontheweb.biz)
• Stealthing Skype into Larger Businesses (voiceontheweb.biz)

Yesterday Rogers launched the first Android phones available in Canada with two devices: the HTC Magic (touch screen only) and HTC Dream (touchscreen and slide-out keyboard). Rogers is the first carrier worldwide offering both these devices and also the first North American carrier to offer the HTC Magic.

Over two years ago, in a post Precursor to GPhone? On My Blackberry?, I had predicted any Google-powered phone would include all the Google features found on the BlackBerry (or iPhone).  In this regard today’s demonstration and presentation did not disappoint. Search, Maps with Latitude, GTalk, GMail, News, Google Docs, Sync, Calendar, were all included in the demonstration with the same Google features as found on any BlackBerry or iPhone. However, there were some differentiating features:

• both phones run on Rogers recently launched 3.5G 7.2 Mbps HSPA network, which Rogers claims to approach broadband DSL speeds and to be 3x faster than any other Canadian wireless data network
• there are over 3,200 applications available in the Android Market. Currently these applications are free; however, Google is expected to add a payment system in a few months.
• both phones have a touchscreen with haptic keyboard which, on a brief trial, was definitely impressive (the Dream also has a physical slide-out keyboard)

A few comments:

• While the Skype Lite beta client was seen on the demonstration devices, it does not work at the moment on Rogers. See my upcoming post about Rogers’ position on supporting Skype for more details; suffice it to say it is a Skype issue that needs to be addressed at this point.
• They are currently targeting the consumer market. With a launch involving “Fringe” actor Joshua Jackson (a native Canadian), the entire presentation centered on drawing attention through his promotional tour of the past few days.
• Pricing for these devices are C$149 when purchased with a three year plan. The voice and data plans are the same pricing as for BlackBerry and iPhone but with an one month introductory offering of C$30 for 6GB data usage per month. Interestingly, according to a salesperson in the Rogers Retail Store at their headquarters, the same offer is being made for iPhone purchases during June.
• Rogers continues to demonstrate an ability to outperform AT&T in the U.S. when it comes to fully supporting 3G, and now 3.5G, networks.
• In Om Malik’s post today, With 2M Downloads, Where Is Right on Track, it appears that ”Where” is the most popular Android application. However, for Rogers’ customers the question would be the extent of the Canadian content in this application.
• Yesterday T-Mobile USA’s CTO reported that over 1 million G1 phones have been sold in the U.S. over the first six months in the market. According to mocoNews.net, it appears that T-Mobile USA is going ahead with new Android models and forsaking Nokia’s new N97 offering:
  

  [CTO] Brodman said they are not very interested in Nokia’s flagship N97 device, which hits the market this month. Brodman: “Some of the Nokia/Symbian devices have a lot of functionality, but they are quite expensive and Symbian does not have a lot of traction in the U.S. While Nokia (NYSE: NOK) is a strong partner, we haven’t had a lot of demand for N-series products to date.”

Bottom line: Android opens up new user choices in the Canadian consumer smartphone market. Frankly, the key attraction and differentiator will be the variety of applications available on Android Market along with the overall touchscreen user experience. As a representative application, at yesterday’s launch they mentioned Savvy Shopper that allows price comparisons, using the camera as a bar code reader, for any product in their database.

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• Google: Expect 18 Android Phones By Year’s End (bits.blogs.nytimes.com)
• T-Mobile USA sells 1 million Android phones (phonemag.com)

While, being a Canadian where I could not try out Skype for iPhone “legally”, I have followed the coverage and comments across the web. At this point I simply want to provide a summary and links to some of the feedback. In some sense, Hudson Barton’s tweet earlier today, shown above, sums it all up.

First, I should mention, however, that as of the end of its first day of availability, Skype for iPhone was the number one downloaded iPhone application in ten forty countries: U.S., U.K., Netherlands, France, Italy, Germany, Spain, Russia, Japan and Australia and thirty others; it was number 2 in China. According to one chat message I observed, there were over 600,000 downloads on Tuesday’s launch day.

The Reviews

Om Malik on GigaOm: Review: Skype for iPhone. Verdict: Awesome

My Verdict: For those of you that use Skype on a daily basis and own an iPhone, this could very quickly become the simplest way to make long-distance calls. And I’m predicting a big upsurge in Skype as an “IM client” with this release.

To Skype developers who worked on this product, I have two words: Great work! Of course, it would be even better if you got it launched on the BlackBerry so that I could use it on my Curve 8900.

Liane Cassvoy on PC World: First Look: Skype for the iPhone

You won’t find a whole lot in the way of iPhone-only features in this version of Skype. You can use your iPhone camera to take a picture to use as your profile photo, or you can upload a picture from your existing photo roll. But that’s about it. Still, if you’re looking for a solid mobile VoIP service for your iPhone, I can easily recommend Skype. Sure, rival services like Truphone have some features that Skype for iPhone lacks–such as the ability to chat via third-party IM services like AIM and Yahoo Messenger. But, to me, call quality is what matters. And Skype wins that battle easily.

Phil Glockner on ReadWriteWeb: Skype for iPhone: It’s Real and It’s Spectacular

Rest assured the interface is slick and the app works as promised. But, I think the real reason why we are all so excited about this release over other Skype-enabled iPhone apps like Fring or Truphone is simply how much it works like its desktop-bound big brother that we know and love. Instant messaging chats just work. Group chats just work. Getting at-a-glance status on your Skype friends just works. The bottom line is, other apps may get the job done, but due to bad interface design, a critical missing feature, or trying to do too much, are not a pleasure to use. This client actually is a pleasure.

James Kendall at jkontherun has done a video of his call to colleague Kevin Tofel attending CTIA; they certainly were impressed.

Dan York, Skype for iPhone – All I Want From It Is …, discusses the power of Skype’s persistent chat feature, especially when it comes to group chats:

MY ONE BIG WISH

While all this is true, I personally don’t really care. Sure, it will be great to be able to receive a Skype call and sure, it be great to be able to make a Skype call (all on WiFi of course). Sure, all that’s great.

But there is one single thing that I am looking for in this Skype for iPhone application that has been missing from Fring, IM+, TruPhone and every other iPhone app that has offered some type of Skype integration. In a word, it is simply this:

groupchats

Over the past several years I have become a huge user of Skype multi-user groupchats. Both for internal groupchats within organizations or companies and also for public groupchats where people have joined together to discuss common topics. They are an incredible communication tool – and no other iPhone app has delivered those for Skype.

On Dan’s point I have to agree strongly. Chat is 90% of my Skype activity. I have used iSkoot on the BlackBerry largely to follow my Skype chat sessions when out of my home office. The biggest issue has been battery drain; it is imperative to recharge at least daily when using iSkoot (and sometimes more often). iSkoot will follow Public Chats but not group chats.

If Skype cannot resolve the Canadian patent-licensing issue, at least offer a Canadian edition that follows chat sessions. One major advantage of iSkoot (or any Skype client, such as IM+ for Skype) on the BlackBerry is that chat activity can occur in background with message notification whereas following chat activity on the iPhone requires that the Skype application be open.

My own experience: Yesterday I did receive, on my Skype for Windows 4.0 client, a call from a Skype for iPhone user in the U.K.; it was a twenty minute call where call quality was fine for a call over the G729 codec. We could carry on a normal discussion. At the end the caller said that Skype for iPhone got the JB Seal of Approval.

Bottom line: I have seen several Tweets and chat messages along the lines of Hudson’s message above, it appears that, in spite of technology limitations, there will be a lot of Skype chat messaging over WiFi, 3G and 2G/EDGE and a lot of Skype calling from WiFi access points.

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• Skype Coming to iPhone Tuesday, BlackBerry in May [Skype] (i.gizmodo.com)
• Skype Debuts on the iPhone (technologyreview.com)

Having just come out from behind the rocks of West Virginia and spent all yesterday traveling, I arrived home to find that it has been confirmed that Skype will be launching an application on the iPhone tomorrow. The major point coming out of the announcement, aside from the conversation feature set, is that Skype for iPhone will require WiFi access to the Internet. A masterful stroke on Skype’s part, especially after my experience over the past ten days that involved 3200 km of driving, mostly on U.S. Interstates, and nine nights of lodging. Some key bullets to back this up:

• AT&T is just not a reliable 3G wireless network – full stop. I have reported on this previously involving trips to California and Nevada; Om confirmed it recently when he switched from iPhone and BlackBerry Bold on AT&T to Blackberry 8900 Curve on T-Mobile.
• When the best I can find is one bar (and not always) at a major tourist destination with over 2 million visitors per year, Skype could not rely on AT&T to deliver anything close to the current experience Skype and iSkoot are having on the 3 networks in nine countries.
• T-Mobile actually had more bars than AT&T on Hilton Head Island but only two at best; of course an iPhone will not work over T-Mobile.
• AT&T coverage along the Interstates varied from zero to full 3G, but with the latter only near major cities (as to be expected). It was the intermittent 2G/EDGE coverage along the Interstates that was very frustrating. (I can drive along Ontario’s major freeways with no service interruptions, whether 2G or 3G.)
• WiFi access points are becoming pervasive. Every hotel along the route was advertising high speed Internet connectivity (usually WiFi); most restaurants also had WiFi access, including one at a New York State Thruway rest stop. Our primary lodging had individual access points for each unit.
• I used my Boingo account at one overnight hotel for access without a hotel WiFi charge.

My WiFi experiences during the week (all at no additional cost):

• the major connection for both my Windows laptop and MacBook at our accommodation
• Making Skype video and voice calls from the Mac Book
• Downloading and installing the final release of SlingPlayer Mobile for BlackBerry
• Updating iPhone applications
• Following an NHL hockey game of interest via SlingPlayer on my BlackBerry Bold using my NHL Center Ice cable subscription
• Making Skype calls and PSTN calls via Truphone for iPhone (but with echo cancellation issues on the Skype call and termination issues when calling the PSTN).
• With Boingo, avoiding additional WiFi charges at one of our overnight stops during the trip down.

Not only did WiFi make these applications possible; there were no (Rogers) roaming charges for a Canadian traveling in the U.S. At $6/MB (and when I had an AT&T signal), I limited my use on wireless GSM networks to checking GMail headers, following Twitter via SocialScope and, during our trip home, finalizing a hotel reservation as we neared our overnight destination (and this exercise involved waiting for coverage at some points as we traveled along the I-79 through West Virginia’s mountains).

Boingo will be a major benefactor of this trend; their relationships with major hotel chains, airports and restaurants contribute to this trend and provide an account that minimizes charges. Having clients on Macs, Windows PC’s, Nokia smartphones and, currently in alpha phase, BlackBerry again improves the user experience making the technology transparent to the calling protocol.

One difficulty continues with WiFi: access at high usage locations such as conventions where capacity limitations come into play.  Ultimately it reinforces that WiFi still needs to address scalability issues.

Bottom line: WiFi is stealthing its way significantly into the wireless picture for fixed point access to the Internet by road warriors. Of course its speed and robustness features are additional benefits.

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• Bold Twittering: When is a SmartPhone Truly a Mobile Microcomputer? (voiceontheweb.biz)
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• Skype is Coming to the iPhone. For Real. (mashable.com)
• BlackBerry to Get Skype Action; iPhone Skype Confirmed (jkontherun.com)

Yesterday’s announcement of the Skype for SIP beta created lots of commentary in the blogosphere; it remained the leading topic on Techmeme for several hours.

• Phil Wolff over at Skype Journal, in “Skype For SIP: Big Money, Skypeless, Brand Destroyer”, outlines some of the positioning with respect to Skype for Asterisk, channel schism issues and worries that it abandons Skype’s central tenants and could undermine the brand.
• Alec Saunders, in “Skype embraces SIP; announces beta service for business users”, talks about the impact on businesses using legacy PBX’s, the increased pressure on international long distance markets and a reminder that about 1/3 of all current Skype traffic is business related.
• Jason Goecke at Ahearsion, a Skype for Asterisk beta developer, worries about the impact on the market for Skype for Asterisk in “Skype for SIP = Skype for Asterisk DOA?”

But most interesting was the Voice On The Web Public Chat session that ensued. Being on a vacation I was away from my laptop for about seven hours (yes, it was a great day to be golfing) but when I returned I found a session that not only provided the flavor of the vibrant debate going on but also many answers. The key – Chris Moore, Skype’s Senior Product Manager responsible for Skype for SIP joined into the discussion to make several points:

• Most importantly – this is Skype for SIP beta; his team is looking for feedback from a range of beta testers, not only third party developers but also the IP PBX vendors themselves. To quote Chris:
  

  Yep, whole idea is to get feedback, see what people want/don’t want to help prioritize development of new features. Our group, Skype For Business, is getting a lot of focus and its a key strategic focal point for Skype now. We’ll never get it completely right at the start, but a start is still a start

• To qualify as a beta tester you need to have some experience with configuring IP PBX’s that are currently in the market. For instance, “you must have, and be able to configure, your own SIP Enabled PBX that supports G.729 codec.”
• Beta testers will need to create a temporary Skype name to use in the beta program; the issue of a separate SkypeID and how it was handled was hotly debated.
  One point to clarify:

  Skype for SIP actually can allow multiple Skype IDs to be mapped through to a single SIP identity. However, during the beta period, we are only supporting a 1 to 1 mapping due to the fact that Skype’s advanced Business Control Panel (BCP) configuration portal is not yet available at this time. If a company wishes to configure multiple Skype ID’s mapped to a SIP identity, we can accommodate this for a subset of the beta trial participants.

• The key connections made by Skype for SIP are:
  

  - PBX –> SkypeOut (PSTN)
  - SkypeIn/Online numbers (PSTN) –> PBX
  - Skype Clients –> PBX

• The business model, including pricing, has yet to be worked out. It will require Skype to determine a means to separate out business users from “consumer” users on both Skype for SIP and Skype for Asterisk. The principle here is that business benefits from the various features of these offerings; where such significant value-add exists there is a market for the services. But any pricing for either offering is yet to be determined, keeping in mind that both offerings’ desire to make significant market penetration will be a key moderator on pricing. Again quoting Chris:
  

  no new road is easy and enhancing our focus so Skype can support business users as a distinct group differently from consumers takes some work

• Differentiation from Skype for Asterisk will be an ongoing challenge. Initially Skype for Asterisk, which will be an Asterisk channel, includes handling SIP—>Skype calls, Skype-to-Skype calls and will incorporate presence information. (My comments on an ignored aspect differentiating these are below.)
• While SFS may incorporate some “Skype trunking” capability, SFS also offers the handling of inbound calling from Skype Online numbers.
• As for the current status of SFS, Chris says the focus at the moment is on getting voice connections right as this is the feature most demanded in the market:
  

  and this is baby steps for Skype, there are many more UC services to come, voice for SIP is the biggest ask from customers. Video/presence etc only make  sense when codecs are common between skype clients and SIP endpoints.Some work left there!

• Codecs are an issue. The initially supported G.729 codec requires licensing. The Skype for Business team is working on incorporation of G.711 within a few weeks but eventually hopes to assist with the adoption of the SILK codec across the industry by supporting SILK. But this also requires SILK support at the end points. Bottom line: codecs have both a technology and business issues to be resolved.
• Security is an issue that will probably provide one of the major challenges as Skype opens up access to its cloud from both Skype for Business offerings.

My own observations, not having been around for the discussion:

• Skype for SIP and Skype for Asterisk: the discussion yesterday centered on technical issues but totally ignored the market channel issues.
• Skype for SIP requires working with the various IP PBX vendors who have their own distribution channels; Skype for Asterisk is a partnering project with Digium who has its own unique distribution channels. These channels are both looking for innovation that keeps them in business. Yes, the common issue is that SFS and SFA both threaten the long distance market, but the VAR’s and System Integrators in these channels will need new offerings that meet this challenge.
• A significant challenge for both SFA and SFS will be the User Interface. How much will either of these products make the installation,  configuration and operational aspects so user friendly that outside support requirements are minimized or eliminated. This is a huge challenge in the SMB market as many small business owners will simply not want to be involved with such issues; they have their own business specialty to focus on. The value-add of VAR’s and SI’s serving any business market comes in making business communications low cost, seamless to the business operation and five 9’s uptime for their customers.
• There is not one solution that will meet the complete world of business needs. Currently in this SMB space we have several vendors: Cisco, Microsoft Response Point, Avaya, Siemens, etc. The world would be up in arms if there were only one offering for providing the disruptive innovation for which Skype can provide support to these channels.
• The issue of addressing consumer users vs business issues recalls the PC market twenty years ago when PC hardware vendors, initially Compaq, finally figured out how to differentiate and address these markets. This was a major issue I had to deal with in setting up a PC reseller network at the time. Today we see Dell addressing these various markets as soon as you launch into their website.

The Skype-enabled world is only healthy if there are alternative offerings and channels. Recall the theme of Skype President Josh Silverman’s reminder to the analysts last week: “Skype is a software company but we plan to be everywhere”. The Skype for Business group is focusing on making the software required to support these offerings; this software will leverage the IP PBX vendors and Digium distribution channels to drive adoption through into the various regional business market channels worldwide.

Update: While Om’s post, Skype Now Means Business, Friends the SIP World, demonstrates that he has not been following very closely the strategy being laid out by Skype’s new executive team over the past few months, the comment stream it triggered  is well worth reading. For instance, check out SFA developer Tim Panton’s comment about the opportunity for innovation he has found in SFA:

That aside, I’m a huge fan of S4A and our experience to date has been positive. We leverage the improved identity management (vs PSTN or SIP) and low costs of Skype to do some very cool integration with business processes and web applications by routing Skype calls through the extensible and scriptable platform of Asterisk. [author’s bold]

Next Post: Why Skype needs to get Skype Public Chat back into the latest release of Skype for Windows 4.0. The discussion referenced above demonstrates that this is the major failing of this version.

Update: Andy Abramson at VoIP Watch: Skype and SIP Equals A Takeaway of Toll Free

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• Skype Taps ShoreTel for Enterprise Play (gigaom.com)

Skype today published data from a recent Zobgy survey that, aside from demonstrating smartphone users’ desire to control their own phone configuration, demonstrates that a significant majority of users in the four countries surveyed (U.S., U.K., Japan and Spain) simply are still not perceiving the potential for a mobile phone handset to be considered as having additional use beyond simply making voice calls.

While I am receiving feedback from acquaintances who are saying their BlackBerry Bold or 8900 Curve has become their mobile computer (reinforcing my own experience) the survey results conclude:

• over 62% of the survey respondents do not perceive their mobile device as an extension of their computer.
• Over 70% have never downloaded an application to their mobile phone.

What this survey really says is that awareness of the smartphone as a mobile computing device is still quite weak amongst the general public, especially in North America. Secondary to this finding are the results showing:

• Only 23% feel that they have more or the same level of control over their mobile device as they have over their computer.
• 67% want to be able to choose their mobile applications for themselves, rather than have their carriers choose for them.

Of course consumers want choice; the real issue here becomes the legacy microcomputer user issue of balancing:

• how much guidance does a vendor (carrier, PC manufacturer, smartphone vendor) provide driving users to “supported” or “authorized” applications against
• how aware is the consumer that they can actually have “freedom to choose” when it comes to not only smartphone applications but also personal computing applications.

The major difference from the early Windows 95 days of wanting to be on the Windows desktop and wanting to be immediately available on a smartphone is that the carrier, not the operating system developer, approves the user interface and smartphone configuration that is available on purchase of the computing device.

We have since seen the disappearance of “pre-configured” Windows desktop applications (how many PC’s have I installed over the past 15 years where I removed the AOL application?) with more practices such as the Dell Vostro line of business PC’s providing a minimal number of pre-installed desktop applications supporting use of the PC itself and no third party applications. It has become the responsibility of  the individual third party developers to generate market awareness and adoption on a PC platform.

The Apple iPhone started this trend within the smartphone consumer market. A basic iPhone has the necessary applications to use the phone for voice calls and text messaging along with a minimal number of third party applications such as Google Maps and Facebook. From this starting point, the user can then use the iPhone App store to choose applications that find the nearest Starbucks, tell you when the next TTC streetcar is coming, deliver the Toronto Globe and Mail or turn your iPhone into a musical instrument. No carrier control, no carrier revenue; over 20,000 applications available.

When looking at the BlackBerry, one again finds that it comes with a set of basic applications that support communications, either voice or text (including several IM applications). Users have long been able to add applications either via stores such as Handango with 1800 applications for the Bold, Crackberry App Store or a wide range of enterprise-specific applications. Today my BlackBerry can follow Twitter and Facebook via SocialScope, deliver my cable TV service to the device anywhere worldwide, make Skype calls via iSkoot or IM+ for Skype, follow the news on NY Times, Wall Street Journal or CNN (Globe and Mail, where are you?), stream video to the Internet (Qik) and use any Google service (Maps, News, Reader, Search, Sync, etc.).

The ability to download user-selected applications is here (certainly on my Rogers Wireless service). The real issue is that North Americans need to be made more aware of the potential of a smartphone to deliver value-added services and information. Only at that point will there be sufficient pent-up consumer demand to “free up the smartphone” from today’s level of carrier control.

According to the report the Spanish and Japanese “get it”; probably other European countries where the level of  carrier control of applications is much less than in North America also get it. The survey found almost twice as many Spanish have downloaded applications and perceive their mobile devices as an extension of their computing experience. When the awareness is there, the demand for user freedom to choose their applications and smartphone configuration will arise.

The bottom line:

• General awareness of mobile smartphones as more than a voice calling device still needs to be promoted heavily by both application developers and smartphone vendors
• Users perceive that they would want to have control over their smartphone applications if they know there is an huge range of non-telephony applications available.
• the younger generation will drive adoption through their personal social networks, in turn, making older generations aware of what can be done with a smartphone.
• Developers still need to market their applications, emphasizing the user experience, beyond simply having them available on the iPhone App Store or BlackBerry App World.

All it takes is for an individual to find one Starbucks, watch one television program remotely, see a live video of the grandchildren, read one time sensitive news report, have one business success story or make a free international Skype call via iSkoot or other Skype-enabled application to drive awareness amongst a broader public. In the end it’s all about demonstrating the satisfaction that results from an engaging user experience to build the necessary awareness.

Om Malik says “As Mobile Data Grows, People Want Wireless Carriers To Buzz Off”.

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Yesterday’s announcement of Grand Central’s rebirth as Google Voice drew a lot of attention from both the mainstream media and blogger world. In following the IP-based communications world over the past three years, I have come to believe that the only potential real time conversation service provider challenger to Skype could come from Google. It has huge user registration numbers at a world class scale; however, its primary business is built around how many ways can one drill down within Search and then offer contextually relevant advertising. On the other hand, they appear to be looking to complement search-embedded activities, such as Search within GMail, with real time conversation capabilities.

For instance the recently launched GMail Voice and Video chat allows users to migrate to real time conversations directly off an email message. Great in the context of building a dialogue out of an email’s subject and content. I’ve tried it and it works but have not had reason to use it in my everyday activity; on the other hand, if I  find reason to use it, it’s there and easy to launch. A great example of voice-enabling a conversation in the context of an ongoing dialogue.

Show me a platform that is not supported by Google’s GTalk chat offering. Almost every PC and mobile device I receive for evaluation is supported by GTalk. Yet, I only have about ten contacts on GTalk and may get a message once every week or two. There’s a reason Alec Saunders came out recently to say “Ditching all IM Systems except Skype!”. On the other hand, GTalk is there; it’s handy if someone contacts me via GTalk.

While Google Voice lists its entire feature set here, Kim Peterson’s post, “Free long-distance? Oh yeah, Google;s going there”, on the Topstocks blog at Microsoft’s Money Central, highlights the the top ones:

In a nutshell, here’s what you’ll be able to do with the free program:

1. Get a single phone number that routes calls to your cell, work and home phones simultaneously.

2. Call numbers in the U.S. for free. And call internationally for ridiculously low rates — I’m talking 2 cents a minute to China.

3. Get your voicemail transcribed into e-mail or text messages.

4. Make free conference calls.

5. Get your voicemail on the Web.

Mainstream media, however, could only focus on how Google Voice would provide competition to eBay’s Skype. New York Times’ Miguel Helft starts out with:

“Google stepped up its attack on the telecommunications industry on Thursday with a free service called Google Voice that, if successful, could chip away at the revenue of companies big and small, like eBay, which owns Skype, telephone companies and a string of technology start-up firms.”

Ryan Singel at Wired’s Epicenter:

When Google announced its integrated phone service called Google Voice Thursday, it said something very loud.

Google is saying it wants to be the world’s communication hub, and hundreds of companies — ranging from mobile phone operators to Skype to Microsoft better be listening.

Further down the same article, Ben Lilienthal, now general manager of audio services for Citrix Online – and a Skype partner for full service audio conferencing, “isn’t convinced that businesses will move to the service very soon”, Ben went on to say:

“For a consumer, it is a pretty compelling service,” Lilienthal said. “But I think if you are a business user, it’s not necessarily a road you would want to go down. There are a bunch of things business users worry about that consumers don’t. If it doesn’t work, can I get a live person on the phone? Is it reliable? What kind of quality of service can I get?”

Many reporters and bloggers had a chance to upgrade their Grand Central service to Google Voice yesterday. However, being a Canadian I never acquired a Grand Central number for the same reason as fellow Canadian and Fonolo CEO Shai Berger:

….. this problem is not unique. Many similar services don’t extend into Canada. It’s still hard to get a Canadian Skype-In number for example. Ooma has the same problem and when I spoke to some senior people at Ooma last year they cited complicated regulatory issues (including a word I hadn’t heard before: “homologation“. Always like learning a new word). I don’t expect Grand Central/Google Voice to address this any time soon and I don’t hold it against them — the extra hassle is probably not worth it in the early stage of the game.

But Shai also gives a more generic reason for not being a user of Grand Central:

That 2nd item is a bigger issue because it effects everyone, not just Canadians. Our mental model for interacting with phones is that “if you called me from number X” I can hit redial to call you back. (Or I can store that number in my address book for later.) To fix this we either have to change user behavior (tough) or spoof the caller-ID (technically doable but quasi-legal). The only Voice 2.0 company I know of that has solved this problem is Truphone, which does transmit your Truphone number as to the destination. [Author’s note: SkypeOut also provides callerID using either your Skype Online number or your “Skype registered” mobile phone number.]

But there’s also a user interface issue when you look at how a call is placed. Further down in Kim’s post (and similarly described in the NYT post referenced above):

Here’s how it works: You call into your voice mail on Google Voice, and from there you get transferred to a dial tone. You can call any number at that point [author’s italics]. You also have a central Web site that will show your voice mails and manage your account.

So I have to call one number in order to call the number I want (and, at that point, there’s probably no linkage to my device’s native address book), eh?

And, finally, Om Malik points out a few issues, including how users will pay for international calls:

Just as a warning, the upgrade to Google Voice won’t allow you to take your Grand Central address book with you, since the new system uses Google Contacts. In addition, the service doesn’t work with those of you who have Google Apps accounts; you’ll need Gmail accounts. Lastly, they make you use Google Checkout to pay for international minutes. No thanks — I am happy paying with PayPal and/or credit cards. [author’s italics]

Let’s go back to Skype (and iSkoot):

1. I want to locate a phone number (or SkypeID) in my native mobile handset address book, hit the green “Call” button on my mobile phone and launch a voice call. Real simple UI here. On a mobile device, such as BlackBerry or Nokia N-series, I can do this with iSkoot for making both Skype-to-Skype or SkypeOut calls.
2. I have 14 years invested in my current office and mobile phone numbers. I’m not ready to make any changes. iSkoot, on my BlackBerry, and Truphone on both BlackBerry and iPhone work with each device’s existing phone number.
3. SkypeOut (and iSkoot, when making SkypeOut calls from a BlackBerry or Nokia N-Series S60 phone) provides my mobile phone number as a callerID. A party who needs to return my call can simply click on the number and reach me. (and, if in my native address book, readily see who has called).
4. With Skype I can make payments via PayPal or directly on my credit card.

While I will try Google Voice once they expand to supporting Canadian numbers, its modus operandi certainly does not come up to Skype’s standards for a truly user friendly calling experience. On the other hand its call screening, call management and voicemail handling features certainly provide some new challenges for Skype to watch out for.

Bottom line: today we all look for competition in the wireless carrier and mobile smartphone markets. But there are key differentiating features. It’s healthy to see two players such as Skype and Google, both with world scale user bases, in the real time conversation space. But there are differences, in the individual end users will adopt whatever provides the most convenience for his/her individual needs.

Full disclosure: the author has Bell Canada lines for his home office, including fax, requirements while using Rogers Home Phone for family voice calling. He also uses Skype for most of his business conversation requirements, especially long distance and international calling. Just as different smartphones meet different user needs, we’re probably going to find that many of us need multiple services for all our real time conversation needs.

Finally let’s look at one more slide from Skype President Josh Silverman’s analyst presentation earlier this week:

Google has a little bit of work to do to round out an equivalent ecosystem.

Check out Kim’s post for links to several other bloggers’ comments as well.

Andrew Hansen: Skype makes a small ripple, but no Splash with new VM features.

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Over the past few years we have seen the evolution of several conversation communities, some simply employing instant messaging; others employing both instant messaging and voice. Skype is the primary example with its support of IM, voice and video as well as auxiliary features such as file sharing (and, as announced tonight, basic screen sharing) but we are also seeing these services diffuse into Google, via GTalk’s voice and chat capability, MSN Live via Live Messenger, and, in spite of its trying to define who they are, Yahoo. Truphone is a mobile voice calling service that I have used for a couple of years from a Nokia N95-1; it became critical in a situation I encountered in Germany two years ago. I have liked both the quality of the voice calls as well as the user interface, especially its use of the device’s native address book for initiating a call. While they have had some hiccups with their recent product launches, Truphone has become the leader in providing low cost calling from the iPhone while breaking the carrier barrier via Apple’s App Store. I will soon be reporting on Truphone Anywhere for BlackBerry. Now, under recently appointed CEO Geraldine Wilson, Truphone is making a move to grow their user base rapidly by leveraging the user bases of other services.

This evening at the MacWorld Showstoppers event Truphone announced an enhanced Truphone for iPhone providing connectivity to these four conversation communities. Supporting both instant messaging and voice conversations, voice calls to, say, Skype contacts are free provided they go over a WiFi connection. Calls to these communities can also be made over a carrier’s 3G network, usually at the cost of a local call. In addition Truphone is providing access to Twitter as one additional messaging service accessible via Truphone’s iPhone application.

In my interview this evening with new Truphone CEO Geraldine Wilson, she pointed out:

• Using Skype as an example, Truphone’s enhancements set up an appropriate Skype client on a Truphone gateway and complete the call to the Skype contact, taking advantage of Skype’s peer-to-peer architecture such that there are no resulting termination charges.
• By introducing instant messaging, Truphone is recognizing the key role IM is taking on in IP-based conversations where a conversation may start over a chat session and migrate to a voice session if deemed appropriate.
• Truphone sees the introduction of these enhancements as a key to building the Truphone user community; Truphone generates revenue through offering low cost calling to/from the landline and mobile PSTN network.
• Truphone is looking at adding BlackBerry and Android to their supported platforms for this service over the next few months. Key here are devices that support an application store in order to make user access to these services simple and trivial.
• To avoid high roaming charges it is recommended that Truphone for iPhone be used either over a WiFi connection anywhere worldwide but only over a user’s home country 3G carrier.
• These new features go live on next Monday, January 12.

Some outstanding questions:

• Given that the Truphone application needs to be active for conversations, how will this work when other applications are open? Currently if I have Truphone as the open application on my iPhone, I can receive free Truphone calls and my presence will be indicated to other Truphone for iPhone users if I am in their “Favorites” tab. However, if I am in another iPhone application, I cannot receive “free” Truphone calls over WiFi; nor is my presence indicated to others. I look forward to seeing how the enhanced Truphone handles Instant Messaging when Truphone is not the “open” application on the iPhone. This is where BlackBerry’s full multi-tasking capability is a major advantage over the iPhone.
• Calling Skype contacts involves providing your SkypeID and password. What security is in place to maintain the confidentiality of this information. What other security aspects are compromised as a result of placing the calls via a connection to a gateway that supports the caller’s Skype client.
• What is Skype’s reaction to having Truphone siphon off what could otherwise potentially be SkypeOut revenues while leveraging the Skype user base and using the “free” aspect of Skype? We know Skype is working to launch mobile phone applications, probably this week at CES. With iSkoot and the Skypephone on 3′s networks, as we learned at last year’s eComm 2008 iSkoot presentation, a portion of carrier revenues are shared between Skype and iSkoot.

A major step forward in making low cost calls worldwide, Truphone’s moves once again emphasize that WiFi is becoming an ever growing alternative connection option to making wireless calls. At the same time it will be interesting to see how the business model plays out in a world where the cost of voice calling continues to move towards zero.

GigaOm: Truphone Brings Skype to iPhone and iPod Touch

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With both VoiceCon and Under The Radar events in the Bay Area last week, there were lots of announcements in the Voice 2.0 communications space; I wrote up some GigaOm and Web Worker Daily Posts to cover a few of them:

On Tuesday Voxbone announced the launch of their iNum Service. Basically it provides a means to have a universal worldwide “local” number that can be accessed through the recently accredited (by the ITU) +883 country code. Last Tuesday I hosted a SquawkBox conference call with Voxbone CEO Rod Ullens; a post on GigaOm with more details talks about Geography Is Dead – Thank VoIP. Two other excellent “Voxeo Talks” posts from Dan York on this topic (Voxeo is a Voxbone iNum Service Provider Partner):

• How to get an iNum – a “global phone number”
• iNum and “global phone numbers: a video interview with Voxbone CEO Rod Ullens.

A heads up on using iNum; access from Skype to a +883 number is considered a SkypeOut call requiring SkypeOut credits.It’s not a “country” covered under Skype’s Universal Calling Plans; check out the various alternative means to access iNum numbers here.

The following day iotum announced the official launch of their Calliflower conference call service incorporating premium options for businesses that see its benefits for more interactive voice conferencing through the Calliflower call portal. Document sharing and a much wider range of access points, including iNum access were amongst the new features. And they announced an iPhone application for accessing Calliflower calls. More details can be found in my Web Worker Daily Post: Calliflower: A Complete Conference Calling Service.

Finally, in doing some checking out of a new service, I encountered an Automated Attendant that wanted me to enter a person’s last name in order to locate that person in the host business’s extension directory. But that presents a bit of a problem when you have a BlackBerry QWERTY keyboard and you want to generate the tones where 2–> “A, B or C”, etc. But the RIM people think of everything; there is a relatively simple solution. Find out the answer over at Web Worker Daily in “Entering ‘Last Name’ From a BlackBerry”.

Tags: Voxbone, iNum, iotum, Calliflower, Research in Motion, BlackBerry, Dan York, Voxeo

This morning a post on my observations of the forthcoming BlackBerry Storm’s role in the smartphone wars were published in a post entitled: Why BlackBerry Storm Is An iPhone (and G-1) Killer.

It’s a classic case of the importance of working with customers who have large customer or user bases such that this asset alone may trump all the technology arguments out there. RIM designed the Storm to meet Verizon’s and Vodafone’s requirements. It’s the embedded user base that will be a most significant factor in determining the extent of market penetration.

Full disclosure: I have both an iPhone and a BlackBerry Bold. Each has its niche of applications and target markets. iPhone finds me the closest Tim Horton’s or Starbucks. Bold is still my multi-processing smartphone of choice for business applications; it allowed me to transcribe the Josh Silverman interview – an application I could not do with the iPhone. And it provides Skype Chat messages in real time in background when using iSkoot.

According to Tech Crunch and GigaOm posts late last night Logitech is about to spend $30 million to acquire SightSpeed, the video messaging and video conferencing service that recently was selected ot provide the infrastructure for Dell’s Video Chat. Congratulations to Peter Csathy and his team.

Seems like the video calling and video conferencing market is about to heat up. There will be another post later this morning involving an announcement that can bring video conferencing to a much broader user audience than Skype’s (though it’s not exactly insignificant) and SightSpeed’s.

Questions that arise from this acquisition:

• How is Logitech able to continue to partner with services such as Skype when they are now entering the desktop video services market? Logitech’s co-operation was vital to Skype’s ability to provide High Quality Video.
• Or is it a produce marketing acquisition? Is Logitech acquiring SightSpeed simply to have additional collateral software to provide with their webcam offerings? Will we start to see Logitech’s Carl-Zeiss optics in embedded webcams on Dell PC’s?

The economy may be in recession; it’s driving less travel and more audio and video conferencing. They’re seeing a rise in customers and use of audio conferencing at both HiDef Conferencing and Calliflower. It will be an interesting winter for expanding user experiences involving desktop video.

Tags: Logitech, SightSpeed, Skype, Peter Csathy, Tech Crunc, GigaOm, HiDef Conferencing, Calliflower

This is the fourth and final of four posts resulting from an interview with Nart Villeneuve, principle investigator of the Citizen Lab report “Breaching Trust”.

Having discussed some background to Nart’s research, the activities of the Citizen Lab and answers to Phil’s questions, Nart had a couple of recommendations for Skype going forward. As background, the Citizen Lab is a affiliated with the BerkmanCenter for Internet & Society’s “Principles on Free Expression and Privacy” initiative “to protect and advance individuals’ rights to free expression and privacy on the Internet through the creation of a set of principles and supporting mechanisms for ICT companies”.

The goal of this project is:

Through the articulation of a broad set of common principles, the development of resources for implementation and a compliance structure, this collaborative effort is working to formulate an industry-wide response to guide businesses when they encounter laws and practices that may contravene international human rights standards or be at odds with law or culture in their home jurisdiction.

Participants in this project include Microsoft, Google, Yahoo along with several human rights organizations. It is hoped that having a joint industry-activist initiative would help companies avoid situations similar to the one which Skype has encountered in its TOM-Skype relationship.

Update: as I was writing this post today, a New York Times story on this initiative, now called the Global Network Initiative, broke and has more details.

An initial draft document (update: final document to be released tomorrow) is under review amongst the participants but Nart brought out three recommendations for Skype that would be consistent with the guidelines in the draft document:

1. Include in Skype and/or the TOM-Skype client, as appropriate, an ability to provide notification to all participants in a conversation that a contact is participating in the conversation via the TOM-Skype client. In effect, this could be included in a more general identification of the version of Skype that other participants in a conversation are using. The reasoning for the providing version information was to let other participants know, via the version number, which feature set a participant can use in their Skype client installation.
2. When a user types a message that is diverted via the TOM-Skype filter, a message, indicating that the recipient is missing content due to government regulations, comes back to the initiating party. For example: “To comply with local laws, this message has not been displayed to your contact.” Often Nart found conversations where someone would type a message repeatedly when it was apparent the receiving party was not understanding the message being sent, yet the sender did not realize that the message was being filtered.
3. Become a participant in the Global Network Initiative and its dialogue.

The hope is that, through an industry-wide initiative, foreign companies entering the Chinese market would have more negotiating power and a protocol for addressing issues that are raised in the process of establishing a business relationship in countries where the climate for free expression and human rights is restrictive. In an Opinion piece today, Om has other thoughts on the morality of this approach.

Tags: TOM-Skype, Skype, Nart Villeneuve, Citizen Lab, Global Network Initiative

Caution: Skype 4.0 for Wiindows Beta 1 is about improving the User Interface but it is not a replacement for your ongoing Skype conversations on your primary PC and should only be used on a secondary PC to provide user feedback.

While over the years, over 300 million have figured out how to download and install Skype, it’s become apparent that, in the end, it’s the user experience that will drive more massive Skype adoption. Finding those initial contacts, getting the speaker/mic working properly, ensuring you have a good Internet connection and determining what hardware is optimal for a good Skype experience is all part of Skype’s ongoing research and development. And perhaps the most important of these is having a user interface that “delights the user”. Certainly new Skype President Josh Silverman has indicated this as a primary goal for Skype.

In working towards this end Skype has made available an early beta version of Skype 4.0 for Windows with the primary goal of making Skype easier:

• for new users who are just starting up with Skype
• for ongoing users to manage, archive and recall their Skype conversations
• to improve the quality of certain aspects of conversations but especially with how video is displayed during video calls.

Check out the videos provided by Skype that Phil has posted to get a more dynamic overview. A key to understanding release 1 of the Skype 4.0 beta is that its development is at a stage where the Skype product team needs some outside user feedback. As a result they expect the Skype 4.0 beta activity to last through the summer prior to releasing for general use in, say, September, 2008 (a speculative release date, not an official one).

On the other hand at this stage it is an EARLY beta and is missing some features available in the current Skype 3.8 for Windows client. As a result I recommend that you only try it on a secondary PC while keeping Skype 3.8 on your primary PC used for Skype conversations, especially if Skype is mission critical to your conversations. From Product Manager Mike Bartlett’s post today:

We’re sharing this beta with you a little earlier than normal because we know it’s a big change, and sometimes change can take some getting used to. We’re going to spend the whole summer listening to your feedback and making changes so that when we do launch the final version, we’ll make sure it’s perfect. Because we’re releasing it early, a few little things aren’t available in today’s beta: full history and contact groups are two examples.

I can add Call Transfer and PayPal integration as two more 3.8 features missing from this Beta 1. Check out the full Release Notes, identifying the missing features. Via a “Contact Customer Support” Help menu item you can provide your feedback where they’re specifically requesting your “comment, feedback or frustration”.

If you’re into beta testing; if you have a secondary or back-up PC on which you can try this out, give it a try (download here). There is going to be a learning curve to get familiar with the new interface — keep in mind that, with Skype 4.0, it’s more about the user experience than the technology (although technology performance bugs should also be reported). As the beta releases progress we’ll advise you when it’s ready to try out as your primary Skype client. And, as we get more experience with it, we’ll be posting our comments.

Around the blogosphere:

Andy Abramson: VoIP Watch: Skype 4.0 Beta Comes To Life

As a basis for making new revenue, it shows me that Skype is looking beyond just selling cheap minutes. For now think of 4.0 as a canvas, that’s only been outlined. The real version is weeks away and likely will incorporate more feedback from users.

Om Malik: GigaOm: Video Makes Skype 4.0 Grow Bigger, Wider

The real reason for the redesign, however, is Skype Video, which desperately needed a new layout because it requires an ease-of-use that eludes the current client. As I pointed out a few weeks ago, video communication (which accounts for about 28 percent of total Skype calls) has been one of the fastest-growing features on Skype, thanks to the easy availability of built-in cameras, especially in devices used by mobile workers.

Dan York: Disruptive Telephony: Skype 4.0 seriously disrupts the Skype UI – is this a good thing? Dan hits on the core of this beta program:

I’ll also be curious to see how well Skype balances “simplifying” the user experience for new users while maintaining the functionality that “power users” have come to expect. It’s a tough balancing act and it will be interesting to see how Skype does.

New York Times: A Redesign at Skype (registration required)

Sten Tamkivi: siekatsu: Skype 4.0 beta 1 is out! (Full disclosure: Sten is Skype’s General Manager of its Estonia operations which includes the Skype development teams.)

Just over a month ago a two-day Skype outage caused great consternation with predictions of gloom and doom for Skype. Early yesterday here in California (around 1600GMT) I noticed almost 9.7 million users online — back to about the same number as peak loads immediately prior to the outage. Somebody out there is continuing to use it; for someone Skype is offering value-add.

Meanwhile Andy Abramson over at VoIP Watch wants Yahoo executives to admit “Yahoo isn’t talking.” And whither AOL’s AIM Phone Line? Om reports on Vonage: How Low Can You Go? And Matt Asay, over at CNet, writes: Swapping Vonage for Skype: One man’s search for VoIP that actually works where he starts out with:

Yes, you read the headline right. I have long been a critic of Skype, suggesting that eBay was foolish to buy the VoIP toy and generally ridiculing it as a serious business tool.

Today I’m eating crow, and it tastes great. Why? Because Vonage has been complete rubbish for me, whereas Skype is increasingly approaching perfection. I dropped my traditional phone service for Vonage. I’m now about to drop my traditionally awful Vonage for Skype.

Read Matt’s full story about how deterioration of service levels is driving away Vonage customers. (Hat tip to Andy for pointing out this story.) This morning Alec Saunders writes Walks like a telco, talks like a telco…. must be a telco where he discusses why many VoIP companies are dying when they simple try to offer lower cost versions of traditional legacy telco services. And he concludes with (my bold emphasis):

To get to free phone calls requires a fundamental change in architecture which Vonage et al have not embraced. It requires pushing the core calling functionality to the edge of the network, which implies turning off the “minute meter”. Voice, in this scenario, is nothing more than an undifferentiated stream of bits, charged at the bandwidth rate of the network operator. The profits must be made from the services surrounding the call – before and after – not during.

The SIP standard anticipates this model by allowing for both peer-to-peer calling models, and calling models which pass through a centralized proxy. While no VoIP “operator” has ever embraced the peer SIP model, Skype has delivered peer calling on their proprietary protocol. Skype understands that the money isn’t in transporting the bits, but rather [is] in all of the ancillary pieces that can be offered around that bit transport — ring tones, voice mail, phone numbers, and protocol licensing to third parties who wish to attach equipment to the Skype peer network. Similarly, by embedding conference calling in Facebook, at iotum we’re trying to create a better experience before and after the call, rather than during simply focusing on the cost of the call (although free is pretty compelling, I would argue…)

That’s the fundamental difference between the success of Skype and the failure of Vonage and SunRocket. Skype doesn’t look like a telco. Vonage, however, walks like a telco and talks like a telco…. without a telco’s deep pockets.

Not only does Skype offer an unequaled range of real time conversations services — chat, presence, video, 10-party conference calls, voice mail, SMS messaging, call transfer and file transfer; but we are also now witnessing the emergence of Skype’s Developer Partner program fully demonstrate the value of having service-oriented, ancillary offerings. Offerings that embed Skype into (business) processes such as call centers, collaboration tools, audio hosting tools, faxing, conversation archiving and CRM tools. To recall my post Skype Partners Answer Jeff’s Call for Innovation in Voice Services:

In the Skype ecosystem we can see the recipe for a foundation for innovative IP-based services.

• Start with a full real time conversation platform that combines voice, presence and text messaging.
• Start with a real time conversation platform that is enhanced with video, call transfer, call forwarding, voice messaging and file transfer.
• Start with an IP-based ecosystem that has a set of API’s to facilitate application development and mashups
• Start with a platform for which hardware has been developed to take advantage of many features of the platform.
• Start with a platform that can be accessed via not only Windows, Mac and Linux PC’s but also USB phones, PC-free phone sets, mobile phones, Blackberries (here and here) and the Nokia N800 Internet tablets.

The post goes on to list some of these Partner-generated services. And as Skype’s Partner program holds its various Developer events this month, we are seeing the beginnings of the evolution of Alec’s Voice 2.0 Manifesto. Over the past two years as Skype’s Partner services have evolved we have witnessed a withering of voice services at Yahoo, AOL and others. We have not see others recruit over 200 million account registrations (or disclose how many users are online in real time). Yet the Skype ecosystem is emerging from its cocoon, ready to fly as a major contributor to low cost worldwide real time communications services.

And the telcos don’t have the strategic horsepower to compete with Skype; their most valid strategy for competing with Skype is to partner with Skype for the services and just ship the bits.

Now if we could just figure out what’s going to evolve for Skype from the Google-eBay agreement announced just over a year ago that included this statement: “The companies will also explore interoperability between Skype and Google Talk via open standards to enable text chat and online presence.”

Tags: Skype, Yahoo, AOL AIM Phone Line, Alec Saunders, GigaOm, CNET, Matt Asay, Andy Abramson, VoIP Watch, Voice 2.0 Manifesto, Google, eBay, Skype Developer Partners

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The Skype Developer Program is all about delivering software applications where real time conversation (aka voice and IM) is a key element for providing a mission critical business resource. For instance, OnState brings call center experience, Skylook provides a key tool for customer relationship management; Pamela supports podcasting and other voice recording applications, Unyte allows call participants to share presentations and documents in real time across dispersed geographical barriers. Alec Saunders articulated the role of software as the key to telecommunications value-add in his Voice 2.0 Manifesto eighteen months ago.

So when a legacy telco talks about learning software tricks, we know the message is getting through. Om Malik has written an excellent piece “Telco dogs need to learn software tricks” reporting how software is becoming a key to BT’s success in the 21st century:

… BT was one telco that completely understood that it was facing uncertain times, and had no choice but to reinvent itself to survive.

The senior BT management understood that while broadband was a start point for its reinvention, it had to boldly go where no telecom had gone before, if they wanted to survive. They had to behave and think like an Internet-based software company.

But to focus on a comment: in his summary paragraph:

Instead of spending $6 billion on IPTV projects, AT&T could say buy a Salesforce.com (have some money left over for satellite-based triple play) and ensure a few hundred thousand folks paying $60-odd dollars a month for the CRM as a service.

I seem to recall Skype got a bit of jump on a Salesforce.com relationship last week with its announcement of the embedding of the Skype client within the Salesforce UI.

GigaOM today reported on Vonage’s latest results: new subscribers down, churn is up, ARPU is down, subscriber acquisition costs up. All indicators going in the wrong direction; in fact, one could say that Vonage continues to dig its own hole (as predicted here and here).

Maybe Vonage’s board could use Vonage’s latest service announced yesterday: calling 911 for assistance in digging holes. Hat tip to Garrett Smith at VoIP Supply for digging up this story.

Questions this raises:

• Should not the FCC be developing e911 regulations? From the press release:
  • Note that 911 access depends on its availability within your area. States set their own timelines and procedures on when to call. In some states it is the law to call before you dig. Subscribers should check with their state and local governments for further information.
• Is there a Vonage VP who became totally confused when he heard about Digg.com as a “user driven social content website”?

But we’ll all know when Skype is getting desperate – when they start stating: “Skype is not a telephony replacement service and cannot be used to dial 911 or other hole digging assistance phone numbers”.

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