eBay has dispatched one of its own to take the helm at Skype, in the hope he can go some way to justify its increasingly baffling multi-billion buck purchase of the profit-lite VoIP app. Josh Silverman, current CEO of eBay price comparison tentacle Shopping.com, will take over on 24 March. In his inaugural blog post, he writes …
They should sell Skype *on* eBay. At least then they'll stand to pocket a nifty Final Value Fee as part of the deal.
I'll leave the exact details of the listing to the rest of you...
Skype is doomed
Skype was doomed from the get go.
The whole point of communication is that you have to be able to talk to anybody. If you buy a mobile phone, you can shove any old SIM in it and talk and send text messages to anyone -- to no extent are you constrained to other subscribers with the same company. It's the same if you buy a tethered phone: if you're lucky enough to live in a cable TV area and so have a choice of telephone companies, they have the same sockets, which accept the same phones, and they use the same STD codes for each town. If it was any other way, people would stick to writing letters.
Skype is a closed network, with closed-source software using undocumented (and deliberately obfuscated) protocols. It's difficult to know what they could do to make them less liked a serious player in the communications space. A flashy, binary-only download might satisfy chavvy Windows users who don't know any better; but anyone even half-serious about internet telephony knows that asterisk -- which uses open protocols such as IAX and SIP -- is where it's really at.
(The only thing I can think is, maybe they had some batshit crazy idea to sell advertisement space in phone calls. It's technically feasible, but it has one fatal flaw: absolutely nobody is going to tolerate such a thing, ever.)
The only thing that can save Skype from certain oblivion is for them to open the Source Code -- and that really isn't likely to happen. The current owners seem to have no intention to open it up, and the likes of IBM or Sun won't pay what they're asking.
Pluses and Minuses
I finally succumbed to Skype - well, I did try it several years ago, when it sucked, but haven't checked in again until this month - and have been pleasantly surprised at the overall quality and ease of use.
Strangely I haven't talked to anyone Skype to Skype. All of my calls have been outgoing to landlines. That is where I began to seriously question Skype's business model.
I'm paying $3 a month for nearly unlimited long distance to anywhere in Canada and the US (3000 minutes a month). Try as I might I can't see how they're making much money on that deal but I figure I'll take it as long as it's there.
I'm still irked that the Skype In service, which would give me an incoming phone number, is only available in the US and not Canada.
In the wake of Skype I've looked at a variety of VOIP offerings, and have found that they all seem to offer one of a) prices that are as expensive as land lines b) reports of very sketchy service c) are provided by a web site that seems to have been concocted in twenty minutes for a company that no-one has ever heard of.
Skype's site is confusing and it is very hard to tell exactly what they offer and what things cost. Then again they ARE owned by E-bay, so maybe that answers some questions.
VOIP and Skype's competition is still land lines and cel phones, both of which offer advantages that Skype can't. For Skype to be viable they need to offer something uniquely valuable rather than just going for cheap.
They started with a good idea... and then stopped
The initial premise was good, and the execution was fair: Free skype-to-skype calls, some landline tie-ins and a simple to use IM front-end. And then they stopped. They need to set themselves up like Blackberry, or as an MVNO with mobiles in every country. Simplify corporate communication and everyone will want one. Offer the same as everyone else, and you'll just end up an also-ran.
That said, friends who work or live overseas having a local number their family can call for free on their landlines, and forward to their mobiles for pennies a minute makes it a real, if quiet, success.
Skype is doomed
possible revenue models are:
call termination POTS/mobile -
(ok but self defeating as more people use the service)
charge for software add ons / services "HD video" / "Video Chat rooms" etc
(not a major revenue stream)
reselling supporting hardware - cameras, headsets etc.
(again not a major revenue stream)
advertising as a core part of the application
(people would switch)
Skype does have a viable business model - after all costs are next to nothing to provide the service.
The problem is the valuation of $2.6bn - when will investors learn that users are not the same thing as customers.
New to Skype
Yes, it was massively over-hyped on purchase, but the idea is good and I'm sure once they have increased their user base sufficiently (it must still be growing) they'll find some way to monetise it properly with advertising - as Google did with gmail. Yes, the adverts were/are considered slightly intrusive but it must have worked big-time for them and as a gmail user I certainly haven't stopped using the service because of it.
We've also just started using Skype and I'm pretty sure that we will continue to use it as we've found it an excellent free communication tool for family around the world.
If I were Skype chief exec I'd be looking at ways to distribute free PC headsets.
Skype is doomed
I worry about Skype. 2 years ago they were innovating like crazy, but I haven’t seen any real innovation in the product for ages. OK Skypefind, like I am really going to use that to find a restaurant. Skypeprime, nope I’m not interested in making peanuts answering questions all day. Besides the last time I looked there wasn’t even a directory where you could list your service so there was no way potential customers could find you anyway.
I also saw that Skype let go 30-40 people around the new year, that speaks volumes for the state of the company. Some of those I noticed were responsible for the developer community, that speaks volumes for how Skype views the importance of working with developers. It seems to me they are abandoning the small guys in favour of large deals. Sony, Three etc.
While Skype’s user base continues to grow, they are not making money, they are letting staff go left right and centre (I hear their internal IT team has been cut as well) and they are not innovating like they use to.
I think the writing is on the wall.
@AC (Skype is doomed)
"The problem is the valuation of $2.6bn - when will investors learn that users are not the same thing as customers."
Skype's "business" is not worth $2.6 billion. The problem is who they are up against: "VoIP" means "Asterisk" like "radio valve" means "Mullard". It really is that simple.
The ONLY way that anyone can hope to get any value at all out of Skype is by making it work with Asterisk. Otherwise a new, SIP / IAX / SSL supporting (and 100% compatible with existing Skype-branded handsets/headsets; because if there's any reverse-engineering to be done on these things, you can bet it'll already have been done by the Linux crowd. Never underestimate the power of millions of Freds in millions of Sheds) VoIP application will come along. The Windows chavs will download it to speak to their mates for free, just because it's new and shiny and OMGWTF Skype was so last year!!!1! And the serious VoIP users will download it (or, if it happens to be Closed Source, they will download an Open Source clone instead) because it works with what they've already got.
And Skype ends up an irrelevance, because the one big thing that was supposed to help the company -- Skype is designed only to work with other Skype and to resist all attempts to make it work with anything else -- is actually a serious *deficiency*, and that will only become more apparent as Asterisk grows and grows.
Moral of the story: Always share your sweeties, lest one of the kids to whom you refuse to give one grow up to be president.
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