Where Is Skype's Competition?
But a couple of years after we predicted that Yahoo, Google and MSFT would respond and claw back Skype's customers, so far we've seen little response from these camps. Yes, they've improved and beefed up their voice components, but still it's been an anemic response given the importance of owning voice communications and the user's "Buddy list". The big portals still don't penetrate firewalls like Skype can, they don't offer the same reliability, and they've done almost nothing with respect to marketing their voice services. As a result, Skype is progressing quite nicely, unimpeded by credible competition. Hardware vendors (Linksys, D-Link, V-Tech, Uniden, etc.) are building innovative Skype devices while Telcos (Three UK, Vodafone, etc.) are working with Skype and Walmart is set to retail Skype-based products. While we may not be seeing the integration eBay promised us, we are seeing Skype progress into the mainstream on its own. It's not too late for the portals to still carve out a slice of this market, but it is too late for them to drive Skype into irrelevance. Skype still has it's challenges (growth is slowing, US penetration is low) but it's been very kind of the portals to give Skype the time to persevere.