Google Goes After IM and Skype

Normally, August news is slow as ice melting in cool lemonade, but days after Skype announced the opening of their platform, and Yahoo! announced they will be the content portal for Verizon DSL customers, Google mixes the lemonade with news that they are launching an IM client, and also a VoIP client. The IM client is interesting in that it will be far more 'open' than what we've seen from AOL, Yahoo, or MSN. The Google IM, tied to Gmail and experienced as a popup therein, will interoperate by design with lesser IM names Gaim, Trillian, Apple iChat and others. Google Talk, the VoIP component, is designed to be an open platform as well, which developers can integrate into other sites and services. Google, which will use the same codecs as Skype, now appears to be forging head-first into the communication space, and the $4B in stock that the company recently sold to raise cash, will help fund the effort. Google, with a huge user base, is a credible threat to telco revenue and in particular to Skype. It's hard to see a sustainable advantage that Skype has to justify the valuation they put on their company. But Google also has its work cut out: they offer mostly free search services, without much 'user investment'. In my opinion, the biggest of sustainable advantages is customer loyalty borne out of user customization, specifically the "buddy list" or contact manager. Once a user invests time customizing preferences at a given site, and uploading their contact data, they will tend to use that service to connect with their buddies (and thus incur any communication fees). I think Yahoo!, AOL, and MSN have a head-start here, but they are going to need to catch up to the technical advances of Skype and Google to stay ahead.
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