Set Skype Free !

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    If you love somebody...

    When Sten Tamkivi, GM of Skype Estonia, came to visit us in California, who does he run into on the streets of Palo Alto but Niklas Zennstrom and Janus Friis, the co-founders of Skype, rarely seen in America.

    This impromptu Skype reunion, captured by Ede Tamkivi, was a bit of a surprise for both parties as the estranged founders were negotiating with PE firms to arrange for a buyout of Skype from eBay (per NYT). Instead, eBay just announced that they intend to spin Skype off in an IPO.

    Personally, I would be delighted to see a free Skype. eBay’s current business offers few synergies, and a big multinational needs to accommodate business partners —which limits Skype’s ability to pursue growth aggressively. For example, Skype for wifi-enabled cell phones has been delayed by pressure from wireless carriers who see their voice revenue at risk. Niklas’ and Janus’ original vision was entirely for wifi handsets; the company was called Skyper at the time, and the Europeans (of course!) were focused on mobile solutions work, home, and wi-fi hotspots (where we spend most of our time). The PC version was a test bed that “escaped” among company employees, just like PayPal/Confinity did for e-payments (their original vision was entirely for beaming currency between cell phone IR ports).

    A free Skype could also challenge international carriers (e.g., in Mexico) who got Cisco to introduce noise onto Skype traffic. Disabling Skype would be too obvious, so they degrade the signal.

    With a sense of nostalgia, I looked up my notes from a 2004 USA Today Panel I did on the future of the Internet:

    “Telephony is an application.
    - services move from the network to applications
    - intelligence is pushed to the edge
    - regional provider-centric -> global customer-centric
    Within 20 years, we will look back and laugh that we used to pay for voice connectivity. (Pre-Hotmail, we used to pay for client software and $5/month/email account...) Email and Voice and Video Conferencing will be applications over IP. Wi-Fi phones running Skype and forthcoming dual-mode wi-fi/cell phones will make VOIP mobile and mainstream. For these consumers, voice will become a free application that runs over a commodity data network, without a separate cost premium, just like it has become for email. And of course, voice over a data network will be more valuable and enriched than the plain old telephone service.”

    Restructuring a trillion dollar telecom services market will take time, but consumer demand makes it inevitable, IMHO.

    Why was Skype successful?
    “People like to talk.” — Niklas Zennstrom

    nimboo, raymond crowley, seikatsu, and 3 other people added this photo to their favorites.

    1. nimboo 73 months ago | reply

      Thanks for your insightful commentary!

    2. Steffe 73 months ago | reply

      That's a good quote. We sure like to talk.

    3. Happy Tinfoil Cat 73 months ago | reply

      Loved Skype but it's now blocked at work by the cell phone maker who bought us and most my family now uses QQ. It's taking years to burn off my balance. I thought India had the new phones and wonder if they'll ever be sold in the USA. I think the difference here is that almost all cell phones are distributed by the carriers, in the USA. There is no incentive to allow VOIP. People get the phones 'free' with a contract and may not see the advantage of buying their own. If a certain, down on its luck, cell phone company decided to make these for the general public, they may actually have a chance to survive.

    4. benjiman 73 months ago | reply

      Wow, I'd never thought about the noise idea, but now it seems obvious. And fuct.

      Amazing how old business models follow the same reptilian brain patterns. Fight/Flight.

    5. -fCh- 73 months ago | reply

      Excellent background info. At the time of the eBay-Skype transaction I was a converted skeptic. ( chircu.blogspot.com/2005/09/e-bay-skype-part-i-ii.html ) Now, it seems, that I must have trusted too much Skype's transformative powers within the eBay context.

      I would take
      Why was Skype successful?
      “People like to talk.” — Niklas Zennstrom

      into something like:

      Was Skype successful?
      “People like to talk.” — Niklas Zennstrom

    6. Todd Huffman 73 months ago | reply

      I'd love to see Skype out on their own. VOIP is a disruptive technology which hasn't been given room to break into a nice stride. Voice is data, just like everything else.

    7. !MimosaMicheMichelle! 73 months ago | reply

      I am curious to see what will happen in the future. New technology is becoming very important to people. I think it makes us feel free. In Canada, although the economy is not as bad as south of the border, consumer behaviour studies keep concluding that we give up on many expenses but NOT our television, our Internet and our cell phones. This is obviously because it satisfies a need that all human beings have; it helps us to connect with the world around us. I assume that talking on Skype would naturally go with this preference. I am convinced that any technology that improves and simplifies our communication with the world will be among the first choices for our lifestyle. A free Skype seems an obvious eventuality. I hope.

    8. seikatsu 73 months ago | reply

      This meetup certainly was a real surprise for both sides... Proved again that Silicon Valley is the happening place, even for deeply European entrepreneurs. :)

      PS: Ede says hi and thanks for the attribution.

    9. avlxyz 73 months ago | reply

      great commentary!

    10. drona 73 months ago | reply

      Skype is already rumored to own ~10% marketshare of the worldwide international phone traffic. The Skype team knew how to design things right...there were at least 15 companies prior to Skype that offered VOIP based desktop-to-desktop app based calling. Now they have come up with one of the most rapidly proliferating apps on wifi connected smart mobile devices -- what else a phone app! Iphone, blackberry and even ITouch. Besides email, voice and video, desktop conferencing is also taking off, for work and play.

      One problem I have with Skype however, is that that P2P architecture is quite onerous for corporate and university environments and brings the network down. They haven't figured out how to solve the problem. For >3 people in a conference their service is unusable.

    11. jurvetson 73 months ago | reply

      great points.

      But the most fun one was over here, relating the universal Jungian dream about "my polyamorous cult compound in the forests near Vosu, surrounded by adoring she-elves, with every day being Jaanipaev."

    12. Todd Huffman 73 months ago | reply

      Adoring she-elves?

      Um. Yes.

    13. drona 73 months ago | reply

      Totally agree...those carrier sponsored she-elves would want to kill Skype for the obvious reasons...

    14. jurvetson 73 months ago | reply

      anything to shelve the technology...

    15. On. Goemon 73 months ago | reply

      there must be a bit somewhere that will make my winmobile believe 3gdata==wifi..

    16. jurvetson 69 months ago | reply

      And now it's free (TechCrunch broke the story)...

      "As a separate company, we believe that Skype will have the focus required to compete effectively in online voice and video communications and accelerate its growth momentum” said eBay Inc. President and CEO John Donahoe.

    17. jurvetson 47 months ago | reply

      Alas, screwed again... sold to MSFT. =)

      In related news, via Sten on fB:

      Is Nokia Worth Less than Skype?

      Horace: 'this is the end game of disruption. It ends much more suddenly than it begins. It’s the consequence of nobody noticing the beginning that makes the end so shocking.'

    18. avlxyz 47 months ago | reply

      i'd Like your comment if Flickr would let me :)

    19. Siim Teller 6 months ago | reply

      Re-reading this 5 years later. Your notes from 2004 (10 years ago) are interesting. Who could have predicted that Skype will sort of lose on mobile to chat apps…

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