Perhaps the most informative event I have attended during my two-and-a-half years of writing for Skype Journal was last spring’s eComm 2008. Out of a sense of frustration organizer Lee Dryburgh took it upon himself to risk organizing this event when the former eTel Conference announced it would be no more. The 300 attendees were treated to a buffet of information about various initiatives being undertaken to deploy IP-based communications in innovative ways. From communications enhanced business processes to a garage-based operation to monitor security of abandoned farm houses, we all learned a lot. And the networking opportunity was excellent.

eComm 2009 has been announced; in fact, a call for speakers flooded Lee’s email over the past few weeks. He has put together a tentative schedule and been recruiting sponsors. Last year’s sponsors included many vendors we have written about since the event including iSkoot (Skypephone), Voxbone (iNum), VAPPS (HiDef Conferencing) and Brough Turner’s NMS Communications. Sponsors recruited to date for eComm 2009 include, once again Voxbone, and newcomers Global IP Solutions and Voxeo.

Today we learned that Skype has added its name to the list of sponsors. This is a new initiative for Skype in that they have previously tended to maybe provide speakers but not sponsorship at this type of event. In a statement to Lee Dryburgh this evening, Skype’s GM Audio and Video (and a keynote speaker last year) Jonathan Christensen said:

… thinking about why we did it.. We believe that communications is going through a major shift from hardware devices on dedicated networks to software applications. A new paradigm is emerging. As a clear leader in this new age of communications, it makes sense for Skype to sponsor the eComm event as it is all about celebrating this innovation and sharing our vision for the future of communications with those individuals and companies who are most interested in changing the way people around the world communicate.

It’s been pretty quiet recently on the Skype scene. But then President Josh Silverman did tell us in our September interview that Skype was undergoing a major restructuring. And we have not heard of any layoffs. So it would only be natural to assume that development efforts (beyond the Skype for Windows 4.0 beta program) are under way and we can assume we’ll see new product and service announcements in 2009.

Would any be made at eComm 2009? Speakers from Skype include Jonathan Christensen and Director of Strategy Julien Decot.

Registration for attendees opens December 2, 2008.

Note: Skype Journal editor Phil Wolff, Skype’s Jonathan Christensen, Voxeo’s Dan York, Brough Turner and Jon Arnold are on the eComm 2009 Advisory Board.

Tags: eComm2009, Skype, Jonathan Christensen, Lee Dryburgh, Julien Decot, Voxbone, GIPS, Voxeo

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If we go back to our early September interview with Josh Silverman where we discussed “The Way Ahead – Platforms and Partners”, Josh stated in response to our question about addressing ongoing partner communications issues:

I take the partner program really seriously and we’re aware that we’ve not invested adequately behind it and want to do more. The first thing we are going to do is hire an experienced, capable leader of that organization who will pull together for me a plan for what resources do we need to invest in — engineering, partner support, evangelism, technical documentation — to make sure we build an organization that can support our partners robustly.
What I don’t want to do is over promise. Step one is, when you get somebody good in, lay out a plan and then when we’re ready to announce some more forward looking things we’ll do that.

Skype is about to take “Step one” and has put up a job posting for a “Manager, Skype Developer Community“.

Interested in an extraordinary opportunity to win the hearts and minds of developers all over the world? Are you passionate about the promise of rich Internet communications? If so, Skype needs you to come help change the industry. We are seeking an individual who can help provide knowledge, expertise, and charisma for partners building applications on the Skype Platform.

A comment about the Skype platform:

The Skype Platform provides developers with an open communications development environment with unparalleled richness and reach. With the Skype platform developers can build and deploy differentiated and revenue-generating communications applications, devices, and services for businesses and consumers alike. Since its launch 5 years ago, Skype has grown to over 330 [370] Million registered users across the globe. Skype provides a breadth of rich and integrated communications experiences. Now we are looking for developers to take those capabilities and experiences to another level by integrating Skype into applications, devices, and services on the web. If you are interested in voice over IP, mobile devices, audio coding, video services, rich collaboration, gaming, next generation internet / interactive TV, Location based services and experience as a leader within a community of developers… this is the role for you.

And the challenge:

Your challenge is to drive the Skype Community program that moves the new platform forward, compliments our platform product investments and ultimately delights our partner community and users. Your success will be measured by your ability to work closely with the product teams to develop a comprehensive developer marketing plan, and work with our marketing, product, and business development teams to evangelize Skype’s tools, development environment, and unique value proposition to the development community.

You will be part of the newly formed Skype Platform team whose mission is to lead the adoption of Skype’s Platform with developers and ISVs. The team is resourced and chartered to secure the future of the Skype Platform with developer audiences that span corporate and commercial developers, device developers, next generation developers in startups, students and social developers that writes plug-ins, widgets and mash-up applications today.

It’s a senior management position with responsibilities for leading a renewed Skype Developer program – articulating the vision, analyzing the market space and established best practices, executing on building sustainable developer partnerships, driving the interface between internal Skype resource teams such as developers, business development, marketing and the external developer partners through various outreach activities.

After describing the skills and experience sought, the posting concludes with:

You will be responsible for managing a team of professionals that will support your programs and plans to create a significant and long lasting impact on the community of Skype Software developers. We are looking for a thought leader that can also motivate and raise the enthusiasm of all Skype developers. This is a position with lots of visibility outside of Skype and experience managing media and driving public events is critical.

Location: London, UK or San Jose, CA. (With lots of air miles guaranteed.)

As for Dan York’s question about “the team is resourced and chartered”, recall that earlier in the same early September interview, Josh mentioned:

Right now we have created the job of GM of Platform; I hope to very soon name a GM of Platform. That person is going to have to really work on what does the architecture need to look like to support this, what are the API’s going to be – reference UI’s, technical documentation – as well as evangelizing to the broader community forming some of our partnerships, so we have some work to do.

So, I have to ask, in the context of what we heard during the interview: Has Skype appointed the GM of Platform but not announced it yet?

Dan also comments:

For those of us watching the emerging communication/telephony space, we’ve seen Skype make several different attempts over the years to create a successful developer program. Given their incredible user base and platform, it’s been curious to see that they haven’t yet found the right formula.

The Developer Program has more or less stalled since my Primer series post last fall discussing the developer partner achievements to that point in time. Yet there remain some basic resources such as API’s, a base of about 50 partner applications, and what continues to be world leading technology that gives Skype a head start in architecting and building a complete platform from which developer partners can build successful businesses.

In the meantime we have seen the evolution of the Apple Developer Program for the iPhone where, even with my bias towards the BlackBerry, I have to admit that we have seen some very interesting, innovative and impressive third party applications and mashups. They link voice, presence, location-based services, social networking, search. The results include obtaining real time information for traffic and transit, contributing to a successful US presidential political campaign and finding the nearest Tim Hortons or Starbucks. The most interesting has to be this week’s launch of voice activated Google Search, often invoking location based information for assistance.

The overriding challenge for Skype’s Developer Community Manager will be to create a winning environment that can foster a similar level of creativity and innovation while generating business wins for both Skype and the developer partners. Or to requote Josh’s statement: “to make sure we build an organization that can support our partners robustly.”

From my viewpoint, it’s the position that will ultimately make or break the restructured Skype. Partner innovation and successful business development are key to the sustainable and increasing revenues required to justify eBay’s investment in Skype.

Hat tip to Dan York who first pointed this out in a Twitter tweet.

Tags: Skype, Developer, Skype Extras, Josh Silverman, iPhone, Dan York, Skype Partner Program

We have often reported on HiDef Conferencing as a leader in high quality voice conferencing. It’s a service built around servers that specialize in connecting up to 500 conferencing participants from either the PSTN or Skype, and managing the call participants’ level of participation. Should a participant be connected by Skype, they will hear all other Skype participants across their HD Audio service with all its benefits for providing better voice clarity (thus, the name HiDef Conferencing).

But HiDef Conferencing’s owner, VAPPS Inc. has not let their success depend solely on Skype activity; they have been wholesaling their conferencing service to other conferencing and collaboration service providers. As one example, I often participate in (but do not host) conference call and desktop sharing sessions involving Citrix’s GoToMeeting service and recently noticed that these calls were using the VAPPS service for provisioning the audio component of the calls.

Friday evening New York Times blogger Claire Miller reported that VAPPS venture capital partner, Azure Capital Partners, had concluded a deal to sell VAPPS to Citrix for $26.6 million plus $4.4 million in bonuses, provided founders Ben Lilienthal and Jerry Norton and their team meet certain goals. For Azure Capital Partners this provides a 3.6 times return on an 18-month investment. From Claire’s post:

Azure first looked at Vapps in 2006, but did not invest until the spring of 2007. First, they asked the company to change their business model. It used to focus on selling equipment. Instead, Azure wanted it to charge by the number of minutes people used the equipment to talk because they knew that number would grow exponentially, Mr. Weinstein said. At the time, people talked using Vapps’ technology only a few million minutes a year and now pay for half a billion minutes a year.

Acquisition is becoming the primary exit route for today’s start-ups. Build a business and service that can readily complement another service that has capital for acquisitions and you may find yourself being acquired. At least this is one service that is not going to Google or Microsoft. On the other hand Citrix has been a leader in developing virtualization and collaboration technologies along with related services for over 15 years.

Congratulations to Ben, Jerry and the entire VAPPS team on this achievement. It has been a pleasure to watch, and to report on, the evolution of their service over the past couple of years.

For Andy Abramson’s Comunicano Internet marketing agency this represents a third client acquisition over the past fifteen months; previous ones being IBM Lotus Software Group’s acquisition of Unyte and Logitech’s recent acquisition of SightSpeed.

Related posts:

• Fierce VoIP’s Doug Mohney also comments.
• HiDef Conferencing Aids Business During Credit Crunch

Full disclosure; in 2004 the author provided business development and general management services for Citrix partner Runaware, whose Test Drive service, built on a Citrix virtualization platform, powers many online software evaluation programs, including Microsoft Office.

Internet Censorship Explorer Nart Villeneuve has been getting lots of questions about his “Breaching Trust” report and issued a Q&A that answers some common questions. Initially he describes how he determined that messages containing key words were being uploaded to a web server. (The technologically curious can get the answer through accessing the link.) He then goes on to say:

Is “normal” Skype affected?

No. The Skype software downloaded from skype.com is not affected by the behavior. The only time “normal” Skype users are affected is when they communicate with TOM-Skype users.

What is TOM-Skype and what is the difference between it and Skype?

If you go to www.skype.com from China, you are redirected to skype.tom.com — so that’s [the] version most Chinese people will use.

In 2004 Skype developed a relationship with TOM Online, a leading wireless provider in China, and announced a joint venture in 2005. Skype and TOM Online produced a special version of the Skype software, known as TOM-Skype, for use in China.

What is Skype saying, have they said anything to you?

I contacted Skype to have the security issue fixed before the report was released. So, they have configured the servers so that one can no longer view the logs and they have deleted sensitive files, such as the one containing the encryption key. Other than that contact, I’ve only seen the statements they’ve made to reporters.

The irony here is that if I find someone using the “F” word inappropriately, at my discretion, they may be deleted from my Facebook friends or Twitter contacts. In one case I reported the use to the person’s parent; that person continues to be a Facebook friend but now posts without the expletives. The paranoid in me could ask “are the Chinese trying to clean up the expression of the English language?”

In closing, I would recall that Skype was involved as an element of the process in getting out to the world the message when some “Free Tibet” demonstrators put a banner up on the Great Wall of China last spring.

Hat tip to Rebecca MacKinnon for pointing to this Q&A. As mentioned in my comment to her post, for the first time in its five year history, we have seen a timely response in a crisis situation directly from the top executive at Skype; hopefully this reflects on the new directions and attitude Skype’s new management team is taking in becoming more transparent with the public. Of course, along with the reported dialogue between Nart and Skype personnel, it means all the technology speculators out there have no opportunity to exercise their minds by delving into the (non)-complexity of how this was detected and corrected. But the blogosphere will survive; other issues will be taken up.

At noon EST (GMT-5) today Skype had almost 11.2 million users online. This has been a relatively fast ramp up, given that the 10 million users online level was crossed just under four weeks ago at the beginning of CES 2008. Have to wonder if it’s partly the impact of the MySpace implementation. Of note is that Hudson Barton figures that the number of “real users” has increased by 2.4 million in January.

Following up on a CES 2008 announcement, on Tuesday, Sony released a system software update for its PlayStation Portable PSP-2000 (version 3.90) that includes a Skype client. I had a Skype conversation with someone using this new offering and found it to have excellent quality voice. It does require that you be in a WiFi zone along with a PSP headse, the Remote Control and a Memory Stick Duo. This edition of Skype provides voice only that also allows SkypeOut calls. See the video at the link above for a demonstration. No keyboard, no chat.

Tags: Skype, Hudson Barton, Sony PSP-2000, PlayStation®Portable

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At this point I am going to provide simply links to other stories; my commentary will follow later.

Top Executive Changes at Skype: Niklas resigns as CEO (remaining Chair of the Board) and Skype President Henry Gomez have resigned their positions effective immediately. During the search for a new CEO, Michael van Swaaij, eBay’s Chief Strategy Officer will serve as interim CEO.

Of interest would be to know what is behind the additional “impairment charge” mentioned here:

eBay expects that the €375 million payment (approximately $530 million), together with an additional amount of €630 million (approximately $900 million), will be taken as an impairment charge to be recorded as part of its Q3 financial results.

This statement particularly piques my interest as I was personally responsible for helping to establish an impairment charge in a NASDAQ company restructuring 13 years ago. (In that case it mostly involved getting an assessment of inventory in the distribution channel and estimating how much would come back for replacement of stale product but we also had marketing development fund liabilities and other “gotchas”.) You can throw everything but the kitchen sink into such a charge to cover a lot of sins. But we’ll probably never know in this case.

eBay has also negotiated a release from the earn-out agreement signed with certain Skype shareholders when eBay acquired Skype in 2005. Skype Co-Founder Jaanus Friis, in his post (not) just another Monday, provides a nostalgic retrospective on the past four years while ruminating on his ambitions for Joost:

Skype has been an incredible adventure and I am proud to have been part of it. Looking back at 2003, at two guys running around with a crazy idea of building a global phone company purely on the Internet, moving from one rented apartment to another, still battling a major lawsuit from our Kazaa days, 2003 seems a long time ago. It is amazing to think that it is only four years!

Andy Abramson at VoIP Watch, who has recently been voicing his criticism of top Skype management, has his usual insightful commentary:

This tells me a few things. First that the eBay leadership is not happy with the direction Skype has been going and is looking for a leader who can really run the company globally as a telco 2.0 oriented business.

….

Third, this likely means something is up with Joost and Nikki Z didn’t need to stick around to be a straw boss. For Gomez, who is not a tech guy, this puts him back where he was most effective at eBay and where he can do only more great things to keep the company’s reputation on the high side.

Andrew Hansen has also expressed his viewpoints.

Tags: Skype, Niklas Zennstrom, Jaanus Friis, eBay, Andy Abramson, VoIP Watch, Andrew Hansen

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Salesforce.com has been an ongoing web application success story over the past few years. Securely accessing an individual enterprise’s customer database on-demand from the web and promoted largely through viral customer adoption, I have encountered many enterprises who have come to rely on Salesforce.com as their primary Customer Relationship Management (CRM) tool. It is a classic in terms of how it allows businesses of all sizes to manage their customer database without the hassles of dealing with IT management while adopting to the individual enterprise’s business rules and building a secure archive of the enterprise’s sales and support activities. From their own company website:

Why? Perhaps it’s because we deliver integrated, completely customizable enterprise applications for companies of all sizes. Or maybe it’s because Salesforce is so easy to learn and use, and thanks to the power of the on-demand Apex platform, it can be up and running in weeks or days—not the months or years required by traditional client/server CRM software. Or it could be the unprecedented speed with which our customers see real, tangible ROI. Or maybe it’s because of our 100-percent dedication to the success of our customers.

Today Skype and Salesforce.com issued a press release announcing:

“the availability of a new version of Skype for Salesforce via salesforce.com’s AppExchange. Skype for Salesforce provides seamless Skype integration into Salesforce on-demand CRM applications and aims to improve workforce productivity and to streamline customer and partner communication.”

Skype for Salesforce enables real time customer conversations via:

• Skype-to-Skype and Skype-to-SkypeOut voice calls; the latter optionally using Skype Unlimited Calling within North America or Skype Pro in Europe and Asia
• Receiving calls via SkypeIn
• Embedding Skype presence indicators into Salesforce
• Text chat with customers and prospects using Skype IM
• Conference calls for up to ten participants involving any combination of Skype and non-Skype users.

Skype for Salesforce was developed by Skype Partner PamConsult, the publishers of the very popular Pamela personal digital assistant for Skype. Extracting from the Salesforce.com AppExchange description:

Skype for Salesforce offers you full Skype functionality in your Salesforce screen. You will see the online status of your Skype contacts, you will be able to call them with one click and also receive calls. For received calls with caller ID, Salesforce automatically retrieves the record of that person so you are prepared when you take the call.

You may also import your Skype contact list. This allows for easy Skype calling from Salesforce.

Conference calls are also supported and allow you to easily, directly from Salesforce, start a conference call with a few clicks.

and concludes with

We also plan to release a (commercial) Premium version with added functionality like call recording, call transfer,

With Salesforce.com’s over 646,000 subscribers at over 29,800 companies, Skype for Salesforce represents one more viral step towards building Skype adoption, especially in the SMB market. More to follow after interviews with some of the principals involved.

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Yesterday Mark Evans posted his Communications 101 thoughts and mentioned:

Note: It’s important to be clear there is a difference between having the “gift of the gab” and communicating well. This post is driven, in part, by my personal goal to become a better communicator.

But when it comes to maintaining family relationships, having the “Gift of the Gab” can be important … and we all know that “gabbing” to the extent appreciated by Mom usually requires lots of time to catch up on the family news and events. This morning Skype and Intel announced their joint “Gift of the Gab” promotion where

Consumers in the U.S. and Canada can take advantage of Internet communications over Skype by placing free SkypeOut calls to any landline or mobile number around the world on Mother’s Day (May 13, 2007). Sponsored by Intel, the “Gift of Gab” promotion represents the first time that U.S. and Canadian users will be able to make free SkypeOut calls to anywhere in the world for a period of 24 hours. Calls from one registered Skype user to another remain free. Usually, SkypeOut calls are billed at per-minute fees depending on the location called, with rates beginning at the low Skype global dialing rate of 2.1 cents per minute.

Why Mother’s Day? Skype PR has provided some interesting statistics:

• Mother’s Day is the busiest calling holiday of the year, so there’s no better day to make calls for free.
• Sixty-two percent of moms just want a phone call saying I love you on Mother’s Day, yet only 35% actually receive phone calls, according to a new survey commissioned by Skype.
• 42% of adults say they see or talk with a parent (especially Mom) every single day, up 10% since 1989. Now all that chatting won’t cost anything!

Certainly problems have occurred in past years on the PSTN where sometimes you have to wait several minutes to get a long distance connection on Mother’s Day (especially for overseas calling). Obviously using Skype not only provides a higher probability of completing a Mother’s Day call (due to its peer-to-peer architecture) but also, more importantly, allows you to have conference calls so that not only you can call Mom but you can bring in your remote siblings to join in the conversation and celebration. Of course you can record the call via either of Pamela’s Call Recorder or Skylook in Skype Extras.

For those unfamiliar with making SkypeOut calls, Skype has provided some guidance here.

And why Intel? PC’s with Core Duo processors enabled Skype to extend free conference calls to ten participants.

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Recall our “Note to Innovators: Market Thyself” post over the weekend triggered by Andy’s VoIP Watch post on Why Some Innovate and Die, discussing the importance of marketing considerations in building a business. Alec Saunders has responded with several low cost suggestions for doing market research that don’t involve hiring a Forrester or Gartner:

Bottom line, there are many ways you can do effective market research without having to spend a bundle of money. Effective research will help you find the need and be customer focused.

Read the entire post for Alec’s comments on customer focus, distribution models and the role of retail.

Garrett (Smith on VoIP) contributes insight, from his perspective as a largely web-based distributor of VoIP and related hardware, built around three themes:

• Marketers Create Products, Engineers Build Them
• Use Your Money to Build a Great Product; Then Sell It Online
• For Retail VoIP the Numbers Don’t Add-Up

The last one comes from his experience with Vonage retail kiosks: As an example:

“…. The vast majority of consumers you will encounter in a mall kiosk setting (or even at radio shack) just are not able to comprehend the technology. Not that it is that hard to comprehend, but from my own “market research” during the kiosk trial you wouldn’t believe how many people think AOL “is the Internet.”

Garrett goes on to talk about the difficulties of hiring experienced staff at the retail level and the role of subscriber commissions and ARPU in generating sales. Interesting perspective….

In case you missed its referrals on other (VoIP) blogs, check out VoIP News’ “25 Tips to Improve Your Skype Experience”. Some tips are simply pointing out features of Skype (Call Forwarding) while others are innovative applications for Skype (A DIY Home Security System). The “Silliness” section includes mention of a Voice Analysis Love Detector and a NotMyNumber Directory.

And you can read about the DemoCamp 12 event I attended Monday evening in posts from Alec Saunders, Matthew Ingram and Jon Arnold (who has video’s of Alec’s presentation). Two key rules for participation: 10 Minutes and No PowerPoints! Now if they WiFi link had been more robust…And if you’re looking for a photo site that is for non-geeks, check out BubbleShare (whose Albert Lai presented an update on his Bubbleshare’s recent sale to Kaboose). It is a prime example of the need for simplicity in consumer products. I speak from experience; several non-geek friends have been using BubbleShare to share family pictures via the ‘Net.

I just reinstalled SightSpeed on my “rebuilt” laptop and am always impressed with the video quality. It is reminiscent of the days about 25 years ago when the first color monitors became available for the mini-computer-based instrumentation I was selling at the time. My budget-limited customers (mostly university based researchers) thought they could get away with budgeting for a black and white monitor until they actually saw the color monitor … it took all of two minutes to change their mind once they realized the features color added. Somehow the additional funds for color magically appeared quite quickly. (I won’t mention the price they paid for simple monitors at that time!) When you see a SightSpeed video its quality just hits you instantly as being the benchmark for video communications. And this week PC Magazine thought so also.

While it is a challenge to market in a space containing the GYMAS-five, Peter Csathy seems to be ringing up the wins by working with partners who can take advantage of SightSpeed’s video messaging functionality. Two of note: a deal with MTV who is using SightSpeed on their Total Request Live offering to bring viewers into the show; SightSpeed is also making its debut in politics as a campaigning tool. Would be interesting to see if my university colleagues Michael Ignatieff and Bob Rae start to use SightSpeed in their tight run for the leadership of Canada’s Liberal party this fall where they need to approach 4500 delegates spread across 4,000 miles.

In fairness I need to point out that PC Magazine makes a point of how Skype video is more associated with ad hoc “phone” communications as opposed to SightSpeed’s video messaging approach. Great to have two players in the game where one sets the benchmark for one particular feature that can be leveraged for targeted messaging while the other provides a total real time communications platform.

Other commentary on SightSpeed: Jon Arnold, Ken Camp and check out SightSpeed CEO’s video message on their implementation of peer-to-peer communications.

Turning to another aspect of video, SlingMedia announced a family of three new products this week:

• SlingBox Tuner for those who still receive their TV “over-the-air:
• SlingBox A/V for those with cable/satellite service and PVR’s
• SlingBox Pro for those who want to use HD signals or access multiple devices (say, cable box and DVD player)

A key feature of the new products is the enhanced resolution – from the previous 640×240 to 640×480 for local network connections; it remains at a very acceptable 320x 240 for remote connections. Any hope for Skype integration in the future to add a personal audio channel with the viewer of the “home” TV setup?

About a month ago a visiting friend told us that she was traveling to Mexico City the following weekend for her son’s wedding. Her son lives in Minneapolis where he is involved in sales and servicing of mining equipment with lots of travel to southeast Asia and Australia; the bride was studying medicine in Houston. His mother started explaining to us how this was a match facilitated by Skype. So I followed up with Eric earlier this week now that they have settled into a new home in Minneapolis.

Eric learned about Skype a year ago May from a customer in Malaysia and started using it to communicate with this customer. He soon realized that Skype could replace his need for any calling card and now uses Skype routinely both from his home office and from hotels, airports and customer sites while traveling. In fact, he often uses Skype video for his presentations to make them more contextual. Within his sales presentations he talks about how his employer uses Skype, often including its free video conferencing, as one resource for providing customer service to customers who are half way around the world from the head office.. On one trip while making a sales visit in Orange, NSW, Australia his hotel did not have Internet so he did some “war driving” to locate another hotel with a free Internet signal to make his Skype calls.

However, Eric’s more interesting story is about how he started to use Skype to facilitate his relationship with Lore shortly after they met a year ago this summer:

Skype definitely helped us to revolutionize our long distance relationship. We would have dates on Skype where we would do things together. For example, we would go out and buy the exact same sushi dinner and eat it together. We both enjoyed the same kind of sushi at the same time, but in different places. I even organized a Skype date for the day that I went down to Houston to propose to Lore. That way I knew she would be home! If we had to worry about long distance charges we definitely would not have talked as much over the past year.

In further discussion Eric mentioned how they did cooking contests on Skype – for example, simple-to-make quesadillas. They would actually watch each other make a quesadilla over Skype video; they then would sit down, eat their preparation and judge who’s quesadilla is the best based on the look on the other person’s face.

While Eric was painting his new apartment he would turn on Skype video such that Lore could watch the progression of the painting. In general he says, “Skype definitely helped us to make a long distance relationship more doable as it definitely makes you feel like you’ve been together for a longer period of time.” He then went on to explain how they once did a “remote” shopping tour at the Brisbane Australia airport; Eric would walk through the stores showing items via Skype video while conversing with Lore via his Bluetooth ear piece; Lore then had the opportunity to select what items she would like to have purchased and brought home. And finally, when there was an occasion to celebrate they would each go out and buy champagne and drink toasts facilitated by Skype video and audio.

While they are now living together and have definitely reduced the need for Skype, I found that during my interview with Eric, Lore was on another laptop doing a Skype call with her parents and brother in Mexico City; Eric also uses Skype to talk with his family based in Toronto. Skype continues to be a facilitator in building and reinforcing their extended family bonds.

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In a press release issued this morning, Google and eBay announced an agreement which comprises “two primary components involving text-based advertising and “click-to-call” advertising functionality”;.In the course of the press release there are several implications for Skype; however, let me draw attention to where Skype already has incorporated Google searches, namely, as an option in the search icon of the Skype Toolbar for Internet Explorer and Skype Toolbar for Firefox:

Other options in this Skype Toolbar’s search element include Yahoo, Ask Jeeves, eBay and Shopping.com.

Lisa Leff at AP provides a good overview; combined with the press release we can see the following implications for Skype:

• Google will become the exclusive provider of text-based advertising for eBay outside the U.S. This complements the Yahoo-eBay deal last June that applies only to the U.S.
• “Click-to-call” integration involves both eBay and Google platforms worldwide “using Skype or Google Talk”. It remains to be seen how this will play out but certainly with over 100 million registered users, we can see where Skype’s strength lies here.
• Skype will soon offer its users an option to download the Google Toolbar to which Skype will add a custom button. Probably won’t look a lot different from the Skype Toolbar for IE or FF shown above.
• The most interesting comment from a Skype observer’s viewpoint is the statement: “The companies will also explore interoperability between Skype and Google Talk via open standards to enable text chat and online presence.” Does this mean that Skype will execute on its opportunity for IM Federation Leadership and take up Alec Saunders’ challenge issued when the Skype code cracking story broke:

Skype should take a leadership position in publishing those protocols, and encourage others to build upon them. The Skype client becomes the first, and possibly the best, way to use the Skype protocol, but not the only way.

This agreement also recognizes the “international” aspect of Skype with over 72% of all users having registered a language other than English as their primary language:

• Skype has developed a universal Phone Number Recognition API component that Skypifies any phone number recognized on a web page or in an e-mail. In fact the PNR has been incorporated not only into all the Skype Toolbars but also into the latest release of Skype (ever wonder why you now see a flag associated with phone numbers in Skype 2.5?).
• Skype has just announced a localization support utility for its third party developers comprising a list of more than 2600 phrases translated into Skype’s 27 supported languages.

Today Alec hypothesized on where the money is in “Click-to-Call”. Jaanus Kase, Skype’s Chief Blogging Office, has commented on the interoperability item above. Andy has thrown in his perspective, including what he hears about Google’s “weak” pursuit of PSTN termination. I’m sure we’ll see lots of other coverage, especially given I first heard the story on various morning television shows that are viewed at my fitness club. However, the final proof of this agreement’s value and impact is going to take a few years to play out.

The secret sauce used by Skype that results in the excellent voice quality of Skype-to-Skype calls and facilitates quality in Skype-to-SkypeIn/Out calls is the Voice Engine for PC and Voice Engine for (Windows) Mobile licensed by Skype from Global IP Sound (“GIPS”). Combining codecs, echo cancellation technology and other voice and packet management features the various GIPS Voice Engines eliminate or minimize the impact of inherent (wired or WiFi) network problems and deficiencies introduced by factors such as delay, jitter, packet loss, clock-drift, acoustic and network echo.

In a press release last Monday, Global IP Sound announced the extension of this relationship to include Skype’s licensing of Voice Engine for Embedded such that the GIPS features and technology can be deployed in voice-enabled hardware devices. In an interview with Wendy Toth, VP Marketing, and Dr. Jan Linden, VP Engineering at GIPS, we learned:

• This agreement will permit the incorporation of GIPS Voice Engine technology into future WiFi phone offerings. (It is not included in the recently released WiFi phones announce last month.)
• It would facilitate the offering of a Skype for Symbian phones (such as Nokia’s N-Series) although no such client has yet been announced by Skype.
• In July Skype/eBay and GIPS resolved the patent dispute that Skype effectively assumed upon Skype’s acquisition of Sonorit and Camino Networks.

Eleven years ago I had been close to the scene when Microsoft did an original one-time licensing of the Spyglass Mosaic web browser that formed the core of the original Internet Explorer; Spyglass then went out of business within the following year as they had no sustainable revenue stream. I asked Wendy what was different about the GIPS business model such as to sustain and grow their revenues, given that Skype has licensed GIPS but has no ongoing revenue base for basic Skype calls. She responded:

• GIPS has developed a business model that relies on both initial one-time and ongoing usage revenues.
• GIPS has built up a diversified customer base such that GIPS’s success is not significantly dependent on their Skype relationship.
• GIPS has set the bar for voice quality through their unique overall methodology for voice processing, incorporating echo cancellation and their proprietary codecs.

Other questions we posed to Wendy and Jan:

• What is the status of Global IP Sound’s video technology which was demonstrated at Fall VON last year? Effectively they have extended their Voice Engine into a Multimedia version that incorporates video technology. The initial licensee of Voice Engine Multimedia is AOL. To date there has been no licensing by Skype but she would not reveal whether there were any negotiations to extend Skype’s license to include Voice Engine Multimedia.

• Where do you see the real push or pull for compatible hardware devices? Dual mode WiFi handsets and compatible ATA devices.

• What is the most significant trend you have seen in the past year? Asia is a market that is growing much faster than our North American and European markets. Of particular note are Korea and India.

• Where do you see the market in three years? We will see VoIP go away as a term as it becomes transparent to all voice communications infrastructure. On the other hand it will impact how we communicate as new voice applications evolve. GIPS will be a player anywhere there is voice processing on the network. As an example, have a look at GIPS Border Interface Engine, bringing GIPS technology to the carrier market at the VoIP/PSTN gateway.

In summary:

• Expect to see new Skype-Certified hardware incorporating GIPS Voice Engine Embedded in the not too distant future.
• Given that their relationship has matured to the point where they can quietly resolve potentially divisive issues such as the patent dispute, the GIPS-Skype relationship that is a key element contributing to Skype’s success has become much stronger.
• Going forward GIPS will be a player in the VoIP communications ecosystem at the client, device, network and carrier level .
• Question: Will Skype take advantage of other GIPS Voice Engine technology to provide improved video as well as a Symbian Skype client?

Video Action Keeps Expanding: In addition to service launches on the video communications front, (Skype, SightSpeed), it was a week when we learned where Skype’s founders, Niklas Zennstrom and Jaanus Friis, may be spending some of their eBay-generated wealth. (Keep in mind that Niklas and Jaanus had VC partners with whom they shared probably a significant portion of that $2.6B sale price.) Phil has commented on their Venice Project, a forthcoming video play first revealed in a Business Week story. Om thinks it does not bode well from an eBay investor’s point of view:

“Whatever the case might be, this doesn’t look good from an eBay investor’s perspective.They spent $2.6 billion (and change) on Skype, and the two main guys are busy doing other projects.”

My take, having worked with many technology-based enterprises transitioning from startup to a sustainable expanding business, is that eBay has let Niklas and Jaanus go back to doing what they are best at – entrepreneurship – and have let their more operationally experienced managers take responsibility for growing Skype from an emerging ~$100 million annual revenue enterprise to the multi-billion per year revenues required to justify a $2.6 billion purchase price. As long as Niklas and Jaanus can input their suggestions and viewpoints into management decisions and do not go to a competitor, I would not lose any sweat as an investor over this situation.

Will Niklas Now Visit The U.S.? Towards the end of the week we learn that Niklas and Jaanus have “reached into their own pockets to help settle a lawsuit brought by the music and movie industries.” Om speculates on a link between settling the lawsuit and getting the Venice Project launched; No further word on the Streamcast or Net2Phone lawsuits. Will be interesting to see if Jeff Pulver can now convince Niklas to attend his Fall VON show; to date Niklas’ only North American appearances have been at VON Canada.

WiFi Phone for Skype – Who Are The Real Players Going To Be?: While SMC announced availability of their forthcoming WiFi Phone for Skype at a MSRP of $199, Om uncovers a report saying that the launch of the NetGear version “has been pushed out again and because of the delays, NETGEAR has now lost its exclusive partnership with Skype.” If I understand the Certification Program correctly, it sets bars for Skype Certification; however, I have never heard that “exclusive partnerships” are available with Skype. But NETGEAR certainly generated high expectations since their big press launch at CES in January. From the recent Skype press release, it seems like Skype has been working with four hardware partners on WiFi Phones for Skype.

Skype Toolbars Update: Skype finally issued a press release for the complete range of Skype Toolbars; we reported on them when the new releases actually became available at the beginning of July. A hotfix release of the Skype Office Toolbar this week has added support for Visio, Access and Project; the beauty of this particular Toolbar is the ability to transfer the file you are actually working on via Skype’s File Transfer in a single step while the file remains open.

A few items this week:

Cynthia Blumfield an analyst blogger at IP & Democracy, demonstrates how Skype is on the path to $200 million in revenue in 2006 when revenue per registered user increases by $0.02 per quarter for the remainder of the year. (Hat tip to Andy.)

In response to an email from one of his readers that starts out with “Why are so many people in the VoIP sphere excited by business models with negative gross margin…..”, Jon Arnold asks where is the business model with GizmoProject’s All Calls Free “offering”:; he makes a point of not calling it a plan or program. (When I was in the software business in the early 90′s, I recall that competition would be so intense amongst dealers such that many dealers would respond to large volume RFP’s with “zero margin” pricing on popular software such as MS Office suites. They made their profit on the marketing development funds ["MDF's"] provided by the software publisher. Key here is to understand that dealers would buy from distributors but get the MDF’s from the software publisher. However, in the telecomm wholesale business, there is no up-channel “buffer” business entity paying out MDF’s.)

Janko Roettgers at P2P Blog comments on how Cringely doesn’t get Skype since he makes incorrect assumptions about the roles of supernodes and “online Skype nodes. (Cringley’s original post on Skype’s scalability: The Skype is Falling.) Janko concludes: “I don’t know how scalable Skype really is. But if it does break one day, it definitely won’t be because of overwhelmed supernodes that can’t handle all those chatty users.”

Seems like there are several Skype-related stories out this week:

Andy at VoIP Watch, in a post entitled Skype Giving More Away, has commented on the SkypeOut International calling promotion that Bill brought to our attention yesterday.

In my view this Skype is acting more and more like a real phone company, using promotions such as this, which is clearly sampling. In many ways this is much like the old MCI or Sprint switch campaigns that did battle with AT&T in the pre-divestiture and post divestiture era of the 1980′s.

PC Magazine has a report on security threats in 15 of the most popular software applications, including Skype. Bottom line: keep your software updated and you’ll minimize these threats. Many, such as Windows and Smyantec’s Norton products, incorporate an automatic update feature. While Skype has improved their update process in Skype 2.5, it is still not an “automatic”. Given they are going after a broader consumer market, let’s hope they get there in a future release. (Bill advised getting this upgrade a month ago in a post immediately after its release.)

Skype for Couch Potatoes? Om dug out Skype, Now on Your TV, commenting on Oregon Networks’ settop media browser “which allows information such as Skype’s in-coming caller ID and message alerts to be displayed on the television screen “. Looks like a feature that should be into TiVo as an option.

Plus ça change, plus c’est la même chose! (The more things change, the more they stay the same.) Andy’s post, We Too, We Also, We Copy, brings back memories of my days with a formerly major utility software company where we always had to be super-careful about discussing new products with Microsoft personnel. Hopefully Scoble’s legacy of humanizing the people behind Microsoft and, by implication, putting out a more favorable public perception of Microsoft, has not withered away just as he is departing for a new venture. Only time will tell if Microsoft’s new offering competes with or complements iotum’s Relevance Engine. (And congratulations to iotum on winning another award.)