Skype: Its Just The Beginning

Skype is a hot brand name in an area that has become a battleground for the biggest Internet companies: voice over the Internet. Google, Yahoo, MSN, and AOL have been rolling out voice products to enhance their existing repertoire of online communications tools. By teaming up with eBay, Skype has managed to level the playing field. Niklas Zennstrom says that sensing increased competition from MSN & everyone, they agreed to be bought over by eBay & says that they can act like a small unit within a big enterprise as Meg [Whitman] has done a very smart thing where she has eBay, PayPal, and Skype as three independent brands, very focused on doing what they can do. Skype’s user base continues to grow ( 65 Mn plus- Mary Meeker presented that this perhaps the fastest growth seen by an internet name in such a short time) – the user base is hooked on to existing services. He sees a lot more upside with new paying services, like personalized Skype, allowing users to pay for digital phone services such as ring tones and avatars. Skype is signing up content providers to provide voice services - anything from phone translation to horoscope to stock market information to advise them. – All these shall carry premium rewards. He also talks about the impending introduction of pay-per-cal - it’s similar to AdWords, whereby a link or a button is placed on a web page or search results or directory & when a user clicks on that, the company is willing to pay for that click- here instead of coming to a home page, it goes to a call center – this is a premium service. Talking of others entering the voice business, he says that it’s one thing to add voice capabilities, but they also need to add other services. He also highlights that the difference is one of focus - in doing this business very [well], while for others, this is a function they have, along with other functions.

Pointing out to the build up of skype ecosystem, he adds that Salesforce.com has integrated Skype into the Salesforce.com platform. The core focus has always been voice, and communications around that & he believes that online presence, text chatting, and voice shall have a new family member joining them -video shall be added in the next release of Skype for Windows. As far as the telcos go, Skype thinks that it’s very beneficial to work with them and it’s good for them to work with it – as for Skype to work, broadband connections are needed. He positions Skype as more of a complementary service to Telcos than a replacement service. Talking of regulations he adds that each country or region that makes it more difficult for users to use Skype is not doing [itself] a favor, for it’s valuable for businesses and consumers in countries to be able to use online services such as Skype. Very few companies have grown as fast as it was before being acquired, post acquisiton also and still retain its identity and brand recall - Skype has admirably done that. Certainly Skype shows every sign of becoming as ubiquitious as Coke or Procter & Gamble brands.