by Derek Kerton

Where Is Skype's Competition?

I'm re-re-visiting my position on Skype. Techdirt writers were early Skype users and fans of the service, but as the hype-storm gathered, we became relatively pessimistic about Skype's ability to justify valuations, despite all the publicity. Our arguments: while Skype works well and has legions of users, there were two key problems: 1) it's legions of users were people seeking "free" products and that's not the best kind of customer, even in volume; 2) Very little of the Skype technology is special, and the position Skype held looked very susceptible to competition from the main portal/IM brands.

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.

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  • identicon
    Julian Bond, 22 May 2007 @ 11:38am

    Market Share

    So what Market Share do you think Skype has of the IM+Voice+Video market? It seems hard to get reliable figures for total accounts, downloads, total online of the other systems. Meanwhile Skype continues to ship early, ship often with a significant release every qtr. For the other IM players this seems more like a minor release every 18 months. As long as this disparity exists, Skype wll continue to overhaul and pull away from them. Most distressing in all this is:- - Lack of progress on IM interoperability - Lack of progress on the open source side in implementations of libjingle, Gtalk interop and combinations of SIP with Jabber.

    reply to this | link to this | view in chronology ]

  • identicon
    Billy Donovan, 22 May 2007 @ 11:38am

    just got data plan. what to download

    I just got a data plan on my mobile. I pretty much do not need my computer anymore since I do so much with my mobile phone. The neatest thing is that I can even watch naughty movies:) It is pretty neat, it's called Mobile TV. All I do is point my phone to sexoncell.com and they have adult mobile movies in different formats like 3gp movies, symbian, pda or whatever. If you have any other cool sites, please let me know! This one, though, even has a free daily mobile movie.

    reply to this | link to this | view in chronology ]

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