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Communications The Internet Businesses The Almighty Buck

Skype's Sale As Media Feint 123

Posted by Zonk from the keep-them-guessing dept.
ansak writes "Bob Cringely's latest article shows evidence that some aspects of the 90s bubble are indeed back: Why would Rupert Murdoch think of paying $3billion for a mostly free online service like Skype? But his last line shows a keen understanding of Murdoch's skills and methods: 'By putting Skype in play, he distracts for no money at all most of the major media companies. And while they try to figure out how to respond to VoIP, old Rupert will be attacking them on some completely other front. He'll be stealing their shoes.'"
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Skype's Sale As Media Feint More

Skype's Sale As Media Feint

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  • This goes much further back than the 90's (Score:5, Interesting)

    by El Cubano ( 631386 ) on Friday July 29, 2005 @07:38PM (#13199622)

    Bob Cringely's latest article shows evidence that some aspects of the 90s bubble are indeed back: Why would Rupert Murdoch think of paying $3billion for a mostly free online service like Skype?

    This is the classic fake left and go right. It has been around as long as competition in business. Why is it that as soon as you throw in a 'net, eThis, iThat, or whatever other technology related slang, people immediately get stupind and forgetful? It's business plain and simple. Make your competitor concentrate on one part of the market and you have free reign in the rest. It's that simple.

    • Re:This goes much further back than the 90's (Score:4, Interesting)

      by timeOday ( 582209 ) on Friday July 29, 2005 @08:11PM (#13199777)
      Cringely's pretty clever in how he wrote this up, too. If Murdoch buys Skype, Cringely will be hailed as a prophet. And if not, Cringely's "ploy" theory still seems plausible, due (if nothing else) to Machievelian appeal. Either way, Cringely comes off looking good.
    • Why is it that as soon as you throw in a 'net, eThis, iThat, or whatever other technology related slang, people immediately get stupind
      Dunno, seems to occur pretty regularly though.

    • This sector is really interesting and heating up. Skype is not a standard, so Skype can only talk to Skype and they are trying to create their own version of what they consider internet telephony to be, a bit like MSN in the early days of the net. What the potential valuations of Skype do not look into are what they actually offer. Some here have already pointed out that free messenger services such as MSN and Yahoo! already offer voice, at better quality, so what is it that skype does other than link phone numbers to skype usernames? This is a perfect scenario for an open source application to make use of an open standard such as SIP (Which is compatible with a lot of hardware, and existing voip networks) and to create a multi-platform consumer product that provides zero lock-in (as skype does).



      These telephony apps are the browsers for the voice internet, so nothing less than a full browser war would be expected. Hence the reason why incompatible applications such as skype will die away as newer and better open source applications that can inter-operate are released and taken up. I would even speculate that a voip client ('browser') would be much easier to develop than an open source web browser, and I think it is high time that the open source crowds jumps in to promote and develop the alternatives to these nasty commercial applications.

      • The thing is, though, I'm sure it's only a short leap of technology to get Skype onto VoIP, or perhaps take it into another arena altogether.
      • I think that's along the lines of what Gizmo is trying to do.

        I've used it and the sound quality is great, the record call feature is, well, nifty at least, and the mapping is fun if a bit off sometimes for things like cellphones (ohio in texas? wtf)

        Anyway, there do seem to be some kinks on the windows side, my connection sometimes won't go through, but that might be related to hibernating and connecting from different places all the time.

        Still rough, but fun and definately cheaper than something
    • This is the classic fake left and go right. It has been around as long as competition in business.
      One interesting thing about Murdoch's companies is that the money keeps on going round and round from one company to another for no apparent reason, so to the observer it looks like there is a lot more money than there actually is.

  • Shoes (Score:2, Funny)

    by mnemonic_ ( 164550 )
    Fuck I just got new sneakers...
    • This is not offtopic, the story mentioned stealing shoes. Am I the only one concerned with the needs of the common man? Shoes are more than a luxury these days, they're often necessary for traversing rough terrain.
    • Please review this. He was trying to be funny (you judge for yourself if so). But offtopic????? That is somebody who is taking retribution.
    • Fuck I just got new sneakers...

      I suspect you wouldn't have gotten an "offtopic" mod if you had followed that up with, "My voice is my passport. Verify me."

  • Skype quality?? (Score:3, Interesting)

    by Really Wannabe Geek ( 687062 ) on Friday July 29, 2005 @07:40PM (#13199637)
    I have never understood why Skype is considered good quality VoIP. Perhaps my experience is the only bad one? I tried Skype for an international chat whether the other machine was on a dial up connection (mine on DSL). Skype worked well only the first time and all that I got on later attempts was weird voice quality, long lags, etc. Nowadays, I have settled on Yahoo Messenger which does an amazing job of voice chat - beats the latest MSN Msgr hands down; rarely a lag, excellent quality, near instant call connect. I have uninstalled Skype a long time ago. Did anyone else have a chance to compare Skype with the IM voice chats?
    • I've personally talked to someone over skype from the SF bay to Shanghai, and there was no lag, and it was much better than phone quality. Both parties had broadband. YMMV.

      • Re:Skype quality?? (Score:5, Interesting)

        by Knights who say 'INT ( 708612 ) on Friday July 29, 2005 @07:53PM (#13199707) Journal
        Skype works behind NATs and is available for Linux and OS X.

        There aren't really any alternatives.
        • Yes, no firewall issues ever (that I know of).

          And I've talked to people in India, Israel and Switzerland from Pennsylvania with "in the same room" presence.

        • Re:Skype quality?? (Score:5, Informative)

          by pmazer ( 813537 ) on Friday July 29, 2005 @08:32PM (#13199850)
          Gizmo [gizmoproject.com] is trying to compete... we'll see how that pans out.
        • There aren't really any alternatives.

          Well... fortunately, there is. Leaving aside gizmo [gizmoproject.com] there is a newborn app called jajah [jajah.com] which supports an impressive number of protocols, among them IAX2 which was designed from scratch to work seamlessly behind NATs.

          And it offers five minutes of free calls (yes, that is free calls to any phone, anywhere in the world) to any new registered user, and you don't even have to leave your card number! (hey jajah admins... BEWARE OF THE BOTS :) )

          Although it's only avail

        • Jeff Pulvers Free World Dialup [freeworlddialup.com] came before skype, does what skype does AND will forward your calls to your asterisk server using the IAX protocol.

          For that reason I will be using FWD and cannmot use skype. FWD is not open as much as I would like, but I least I don't have to use their client software to take a call.

          I don't know if IAX will let you originate an FWD terminating call.

          Sam
        • you forgot windows ce (2003 version)
          skype and skype out + wireless networking = mobile skype
          in your pocket (your coverage may vary).
          free calls in the urban jungle maybe:)

          I don't know how well skype would work over gprs or how cost effective either
          i think my provider will let me have 3 meg download for £5 if i buy as a bolt on
          £7.50 a meg if i just use it.
        • Vonage and many others would disagree with "nothing except Skype works behind NAT"

    • Re:Skype quality?? (Score:5, Informative)

      by paulius_g ( 808556 ) on Friday July 29, 2005 @07:53PM (#13199699) Homepage
      I like Skype and MSN Messenger over Yahoo's voice for several reasons:

      First, Yahoo does not always transmit voice. So there is that weird silence when nobody is talking. I better like hearing the backround noise because it makes you feel more "emersed".

      Secondly, voice quality of MSN Messenger and Skype depend on your microphone and Internet connection. I recall calling a 56K user and having near-32bit quality. Another time, I've called a radio station (which had an excellent microphone and a decent Internet connection) and the quality was astounding (at a whopping 128kbps)!

      MSN Messenger, only has two quality modes. I call them good and bad. The bad quality will mask some backround sound and transmit at 32bit, while the good quality even goes beyond Skype, many times. Of course, because of Microsoft, proper connection detection fails at multiple times and sometimes the voice simply does not work!

      Now, let's get on a bad side of Skype (uh oh!) Skype uses quite an abundant percent of CPU compared to other programs. On a 800MHz computer, Skype takes up a whopping 80% while MSN remains at a low 5%. This is bad if you're trying to play some FPS game togethor or surf the web. Skype is preservative on bandwidth, though.

      On the alternatives side, we have the usual VO-IP programs used by gamers and communities: Ventrilo and TeamSpeak. I prefer Ventrilo as it's quality can be comparted to MSN Messenger, but TeamSpeak is a bit preservative and goes at a way lower quality. Both these alternatives are excellent when chatting in groups.

      So, to conclude:
            Skype
      Advantages
        o Conference support
        o Great quality
        o Stable and reliable
        o Nice interface
        o Multi Platform --- Yay for Linux support!
        o Low bandwidth consumption
        o Bypasses firewalls greatly (I've tested with many corporate firewalls and Skype knows it's way around it!)

      Disadvantages
        o High CPU usage
        o Not excellent for 56K connections

      Until next time,
      Paulius

      • Re:Skype quality?? (Score:3, Informative)

        by Richard_J_N ( 631241 )
        You missed out some key disadvantages:

        1)Skype isn't open-source. You can't read the source code, therefore you can't necessarily trust it. I'm not naturally inclined to give the makers of kazaa the benefit of the doubt.

        2)Skype is gratuitously incompatible with the rest of the world, and uses a closed protocol. This is unforgivable.

        3)Skype is P2P - which means that in some cases, such as Cambridge University, it cannot be used, because a user of the university network may not grant network bandwidth to non-m

        • Re:Skype quality?? (Score:3, Informative)

          by MP3Chuck ( 652277 )
          "I'm not naturally inclined to give the makers of kazaa the benefit of the doubt."

          The makers of kazaa are not the same people that riddled it with spyware (Sharmann Networks, or whatever it was...).
        • Personally I use Skype to make long distance calls to other people, see I am studying in the UK but all my family and friends are in another country, not everyone [knows how to use/ has a computer] to speak , so I have found Skypeout quite useful.

          I am really looking forward for a service that directly competes with skypeout, that way the prices could go even lower. Although I find the prices right now really good. Imagine, a long distance call from UK to my own country costs less than a long distance call
      • Disadvantages

        Please add:

        - non-distributed servers
        - non-open protocol

        • non-open protocol

          Yes, but the iLBC codec [ilbcfreeware.org] used by Skype is open, right?

          • The codec might be, but the call handling protocol isn't. And that's what's used to setup a phone call.

            • The codec might be, but the call handling protocol isn't.

              Call handling protocols are pretty easy to reverse engineer! That's certainly no big deal. Of course, it is most likely patented... OTOH, if it's a trade secret; there won't be any patent on it (except submarine patents?).

              Hmmm.... I guess, getting an OSS version of skype won't be so difficult. The catch is the central call setup server architecture (not unlike bittorrent trackers), which is under Skype control.

              A trackerless, decentralized SIP

      • What is this "32-bit" you keep talking about? Even in professional hi-fi recording studios, rarely is anything recorded at more than 24-bit resolution (although sometimes the sampling rates go up a fair bit). Standard telephone is typically 8 bit 8 KHz; an uncompressed G.711 VoIP stream at this quality (indiscernible to POTS, and often of higher quality) requires 64 kbps.

        I guess by "32-bit" you really just mean "sounds great".

        -b

      • So there is that weird silence when nobody is talking. I better like hearing the backround noise because it makes you feel more "emersed".

        Yup, I know what you mean ... that sudden 'silence' makes me feel like the call has been disconnected, so I instinctively 'hello?'. Of course it's done to save BW though ... why transmit when nobody is talking. I was thinking though, why not just introduce a little generated noise on the client side?

    • Skype doesn't work with dial-up connections. It normally needs 5K/sec in/out. Yahoo and other IM voice chats need only 3K/sec.

    • You must have done something wrong then. The audio qualit of Skype is a lot better than Yahoo in my experience.

  • Why buy Skype? (Score:5, Interesting)

    by hotspotbloc ( 767418 ) on Friday July 29, 2005 @07:44PM (#13199654) Homepage Journal
    Why would Rupert Murdoch think of paying $3billion for a mostly free online service like Skype?

    $3b is a lot but Skype has a large and loyal user base. They could tie in a lot of things like: legal online music sales, expanding SkypeOut and SkypeIn and banner ads in the software. With Skype expanding out of the PC (like how Motorola is adding Skype to some of their phones) it has a lot of potential.

    It's a little like someone looking at buying Apple. While they have good hardware and software they are so much more. Maybe that's what Murdoch sees for the future of Skype.

    But is it worth $3b? I don't know.

    • Unless they can drastically improve quality, I don't see SkypeOut being a big factor. Yeah, I used it for a while and put up with the shitty quality, constant downtime, and high prices. Then I found out that I could get toll-quality calls for next to nothing using a service like voxee.com or nufone.net, not to mention use it with Asterisk or any SIP or IAX device.
    • They could tie in a lot of things like: legal online music sales, expanding SkypeOut and SkypeIn and banner ads in the software.

      I am a loyal Skype user. It has kept my girlfriend and me in contact despite being on two separate continents for a year. However, I would drop Skype in a heartbeat if there were banner ads.
    • $3b is a lot but Skype has a large and loyal user base.

      Bingo.

      Skype is also a wet dream for corporations.

      We've recently been told that we need to replace the entire phone-system in the building, or take over maintenance of the old exchange.

      That's something we're not willing to do, as it would cost us too much.

      Instead, we'll be evaluating going with skypeout/skypein for everyone at the office.

      Very low cost, very good quality - provided you have the bandwidth for it.
    • There are some simple corporate tests as to whether a company is "worth it".

      The simplest is replacement cost, given three billion USD (plus any revenues of course) could you create a new Skype?

      Hard to assess the value of the userbase, and the telephone Interconnects, and goodwill, but given the immaturity of the market, and the speed with which Skype emerged, my gut feeling is yes I could replace it for less than 3Bn USD.

      But then maybe there are aspects of the deal not immediately obvious, and simply becaus

  • Lachlan Murdoch quits News Corp (Score:5, Interesting)

    by SpaceLifeForm ( 228190 ) on Friday July 29, 2005 @07:46PM (#13199660)
    links [google.com]

    Perhaps there is a connection.

  • Why buy Skype? (Score:4, Funny)

    by doyen2000 ( 879584 ) on Friday July 29, 2005 @07:50PM (#13199675)
    To call his son when he moves to Australia.
  • Why would Rupert Murdoch think of paying $3billion for a mostly free online service like Skype?

    Reality Television.
  • >> Bob Cringely's latest article shows evidence

    HAHAHAHA! Evidence, oh, that's funny. I take Cringely articles as "evidence" of the exact contrary of what they claim.

  • The Murdoch Internet Rope-a-dope. (Score:3, Informative)

    by Ohmster ( 843198 ) * on Friday July 29, 2005 @07:55PM (#13199715) Homepage Journal
    Great Cingely post. Rupert has been "feinting" on Internet matters with his peers for over a decade. Notable is his speech to his peers a few weeks ago. See http://mp.blogs.com/mp/2005/04/ss_15.html [blogs.com] His recent announcement of a Fox Internet unit also has these elements. More here: http://mp.blogs.com/mp/2005/07/on_news_corp_cr.htm l [blogs.com]

  • Bubble Spinners *Heart* Feint (Score:3, Insightful)

    by Doc Ruby ( 173196 ) on Friday July 29, 2005 @08:01PM (#13199737) Homepage Journal
    I watched that Bubble blowhard, Kudlow, yelling into the camera yesterday about how Skype (not VoIP itself) "destroys the Baby Bells". Even though he mentioned that Skype is free only among Skype PCs, and they charge for connections to the PSTN - which can't scale. Murdoch's already got Kudlow fainting.
    • And how does charging for connecting to PSTN fail to scale?
      • It's not so much the charging that can't scale, but just their gateways to the PSTN. Skype will need a different gateway architecture to scale millions of network callers to PSTN. There are also problems in gatewaying to other VoIP networks, those that use SIP. "Telephony" is more than just a pair of unidirectional audio streams between two endpoints. Very large loads require lots of distribution and failover architecture, that Skype doesn't support. Even the more open SIP is not yet proven to scale to "cit
  • I for one welcome our new shoe stealing overlords!

  • Of course, the rest of the VoIP industry loves this. If Skype is worth $3 billion, then so is Vonage and maybe Packet8. This purchase will validate the VoIP industry... I don't know about this... Skype is worth a lot because it has a good rep. It gained this rep because the software is free, ad-free and bug-free (well i havn't seen any yet) for Windows Mac and Linux. I use Skype often and so do the 10 odd friends and colleagues on my list, but i've never heard of Vonage or Packet8 and I very much doubt t

  • Don't forget GizmoProject (Score:4, Informative)

    by havaloc ( 50551 ) * on Friday July 29, 2005 @08:44PM (#13199894) Homepage
    GizmoProject [gizmoproject.com] uses SIP, which makes it a little bit more open.

    • Re:Don't forget GizmoProject (Score:1, Informative)

      by Anonymous Coward
      GizmoProject [gizmoproject.com] uses SIP, which makes it a little bit more open.

      More like "much more open." Any SIP user can call any Gizmo user. Any Gizmo user can call any SIP user.

      For free.

      Seamlessly. Hell, if you were motivated, you might even be able to get Asterisk to log into the Gizmo SIP proxy and make and receive your calls without using the Gizmo client.

      Skype can call... Skype. The protocol's not open and there's no interoperability.

  • I'd sell for $3 billion, (Score:5, Informative)

    by spisska ( 796395 ) on Friday July 29, 2005 @08:55PM (#13199931)

    I like Cringely's articles because they are always insightful, always look at things from a different angle, and almost always feature a prediction that I find very unlikely but compelling enough to make me look at the given topic in a different light (which is strikingly different from Dvorak articles, which are always inept, look at things from the same angle as everyone else but with cracked bifocals, and prove the adage that even a blind squirrel finds a nut from time to time).

    That having been said, Skype is a very dangerous thing for the big telecom providers. As Cringely points out, the big phone companies can't buy it to kill it because something else would take its place. But he misses that this also holds for cable companies.

    I use Skype Out regularly to call internationally, and I know that nobody calls to PSTN networks for less unless they own the switch on both ends.

    Comcast et al want to sell VoIP on top of broadband, but Skype (or its successor) is free with broadband -- which brings up the whole bit about synergy and technical capabilities and whatnot.

    Since the whole Skype backbone is P2P there really isn't a whole lot of infrastructure involved, other than the database for paying customers. There's no real physical infrastructure because the users are the network. As I understand it, Skype only has a few dozen employees (but I may have read that a while ago, before they had 20 million regular users).

    The fact that there's basically no infrastructure means that it will be hard for a big incumbent operator to leverage its network size to take advantage of something like Skype. The whole Skype network costs its operators next to nothing to run right now, so how is MegaCableTeleCom, Inc (with all its buildings and employee unions, and executive bonuses, and specialized equipment, and miles and miles of plain-old-copper/coaxial/fiber lines, etc) going to keep it cheap enough to compete with free without losing?

    Cringely's right -- Murdoch won't pay $3 billion, but somebody probably will. Only what's for sale is not the network but the customers. And those customers will flee in a minute if whoever runs Skype starts acting like a phone company -- cryptic bills, mystery charges, line-carrier fees, connection charges, etc. After all, something better and cheaper will come along any day now. For $3 billion, I'd sell.

  • Ditch the landlines... (Score:4, Insightful)

    by Anonymous Coward on Friday July 29, 2005 @08:57PM (#13199942)
    I've been thinking about VOIP as a way of ditching my landline. Switch from

    $80/mo for landline, local calls, and DSL/ISP

    to

    $20/mo for cable modem
    $16/mo for most basic cable
    $16/mo for Vonage VOIP
    Total $52/mo, and I get more TV than I got before,
    have a phone line in the house (I use my cell more anyway), and prepare myself for the next great thing....Netflix trickle download to TiVO in about 6 months.

    Really, I've paid WAY too much for DSL for the last 5 years, in about a week I'm gonna tell the bells I don't need their landline. Its gonna be an interesting phone call to say the least.

    But this comes back to the value of Skype...my Italian colleague here in the states talks to his Dad for free every morning at 5AM (our time). That is an unreal technology. Now, he wouldn't talk to his old man so much if it was not free, but it is, and his phone usage would be over $100/mo on landlines, free on Skype.

    My other colleague (a Canadian/Israeli double citizen) uses Skype as her landline. Her laptop goes everywhere with her, and she is on broadband about 3/4 of the time, reachable on her Skype phone line.

    The phone company landlines are challengeable by VOIP, for a tiny fraction of the cost since the user provides the "last mile" access over broadband. Its a great business model, and I expect Vonage and Skype to make a mint - those two Scandanavians that started Skype are gonna be even richer....
    • People are actually doing that in my city; that is to say, our local cable company recently started offering phone service along with 'net connection. It comes with free long distance anywhere in Canada. When it was first offered half a year ago it was quite buggy, strange interference issues, but it's now quite fine and one my my friends' family has switched entirely over to it, cut off their phone lines completely.

      (if anyone's interested, the company in question is Shaw Cable....the reason behind the
    • The only reason I'm still with DSL is my ISP gives me a static IP address and doesn't care if I use my connection to host a server. That's taboo with Comcast.
  • Now that Rupert Murdoch owns it, what are users to expect ? Well, since Rupert is a member of the trilateral commission, council on foreign relations and travels to Bohemian Grove every summer (where he probably jacks off in a coffin, pleasing his owl master,) we should naturally expect Skype to be infiltrated with secret hooks/backdoors for the CIA/foreign intelligence services, or any close personal friends of this bastard.

    Good thing it's not open source.
    • I agree, thats what I thought at first, you cannot trust these people, they have contacts/friends in some of the most richest inside men ever and most in the know.

      Not to mention ICQ also, probably gives the mosad 100% backdoor access to every persons convo/voice history too.

      The govt and powers at be, NEED TO and LOVE TO keep a close eye on the cerfs. Hey, they started this, 'keeping tabs' on the people in 1870s, when the pre IBM founder from NEC and friends expanded census info to do massive cross-referenc
  • I have a counter theory, which I explain at some length here [blogspot.com]. To sum it up, Comcast and the mobile phone companies won't want to buy Skype any more than the telecoms. It will be either Intel or Microsoft.

    Why? Click the link.
  • This is the guy who just bought Myspace.com for $300 million. Is an outrageous price for Skype really out of the question?

  • Huh? (Score:2, Informative)

    by sunspot42 ( 455706 )

    Why would Rupert Murdoch think of paying $3billion for a mostly free online service like Skype?

    I dunno, but a better question might be, why would /. editors pay any attention to a known fraud [wikipedia.org] like Cringely?

    • any attention to a known fraud like Cringely?

      From an article linked above: "To the best of my knowledge, I was doing so with the title of acting assistant professor," Cringely said.

      In the land where high school teachers get to call themselves professor it isn't much of a stretch - the rest of the world knows not to take anyone from the USA that uses that title quite so seriously.

      We all know that if he really did have an important position at Stanford he would have already had a reputation and would be wr

      • He claimed to have a PhD. He didn't and he still doesn't. Why should anybody pay attention to a word this clown writes? He's no more qualified than many of the people posting here on /.

        Actually, there are probably plenty of people here I'd trust over Cringely. I'm sure most of them aren't lying about their credentials.

        • He's no more qualified than many of the people posting here on /.

          The difference is that he has had experience in finding out information and presenting it in a readable form on a regular basis. A real Stanford Professor would write under their real name but would write a lot less since they would have other responsibilities - most people would realise that.

          Attacking the man doesn't change the message and it's a weak tactic that becomes popular every now and then. I've been reading Cringley on and off for

  • Well, that explains the full-page article in Australian NewsCorp-owned newpapers this morning touting VoIP as the way of the future for phone calls. And of course, the article mentioned Skype several times as if it were the only service of its type available!
  • Más sabe el diablo
    por viejo que por diablo.

    This means, "The devil knows more because he is old rather than because he is the devil."
  • The guy behind Skype on an interview on June 17: [bbc.co.uk]

    "And now we're also very much focussing on moving away from the computer into mobile devices, so you can use Skype for free wirelessly."

    They (Murdoch and Zennström) were already talking back then. Deals worth 3 Gigadollars are very well studied by both parties, and they've done their homework. Murdoch sees the niche that he can jump into after leaving News Corp. and Zennström makes it just plain clear that he's talking with wireless carriers tha

  • Before you talk to Rupert, why not quietly
      license Skype's source code under -another-
      name as OSS, so as to preclude loss of the
      Skype tradition & to give the OSS communi-
      ty the chance to finish the job or at least
      extract the Skype protocols & create some
      -interoperable- software.

  • I can't believe (Score:3, Interesting)

    by mpapet ( 761907 ) on Friday July 29, 2005 @10:51PM (#13200369) Homepage
    Someone else hasn't realized that he'll make people pay for VOIP and push it through cable boxes everywhere he can.

    In taiwan it's called the triple play. (Media, Internet, Telephone)

    He really doesn't care about the "free." He cares that it's a proven system that works.

    Michael
  • At $0.02 per minute, consumer long distance is all but irrelevant to the telecommunications market. It's an infinite supply commodity market that is basically devoid of profit -- this is bottom dweller territory. The telcos are abandoning the consumer market across the board -- and focusing their energy on business markets and advanced services. After all, all of the profit to be made in VoIP->PSTN is in local access charges, which the traditional wireline and wireless providers will be grabbing -- no
    • I do. I work at a major university in the States. I'm regularly in contact with coworkers at a campus we have in the Middle-East. Skype allows for very decent voice communication when simple IMing won't do, cross platform, free of charge... For us it can be exceedingly useful.
    • Ah - that came some close to getting the key point... but the key factor here is a really estoric feature of telecom in the U.S...

      While Skype does have to pay a per minute charge to the local telco to call out into the PSTN, the opposite is also true. If an ILEC (Bell) customer dials your Skype number, then the ILEC has to pay what is called "Reciprocal compensation" to Skype for handling connecting the call to their Skype customer. That charge is not passed on to the ILEC customer, other than being paid
  • Skype needs revenues to get anywhere. Those revenues will primarily come from either SkypeOut or SkypeIn. Unlike the virally and self-spreading nature of a the original Skype (which is a pure IP play), these services require charging, billing and customer support. certainly not something that can be done by clever marketing and adding a codec to kazaa. they will need to re-orient themselves to be customer responsive, regulation compliant, service oriented business. which is going to be difficult for zenstor
    • "these services require charging, billing and customer support. certainly not something that can be done by clever marketing and adding a codec to kazaa."

      Its perfectly OK to issue invoices electronically now (e.g. via a website now) so how they do now is fine and scales well. Google bills huge numbers of businesses for its adsense and that works well given the small number of employess dedicated to it.

      Telcos pay a lot for customer support because they sell physical services which break down (telephone lines
  • "...he distracts for no money at all most of the major media companies." Um, isn't anybody counting that 3 BILLION DOLLARS he pays for Skype?
  • I wouldn't put a cent into the pocket of this man. I wouldn't trust any software he had a hand in producing.

    Thanks for the heads up.
  • it's the international and cross platform aspects of skypes service which sell it to me.
    calls i couldn't afford are affordable.
    but

    skype out is a bit random with its success rates like throw a 6 to talk for anything from a minute upwards and expect for the connection to break at any time and need to redial.

    skype in buys you a national number for your friends to call. (send me a text I will call you back and use the free minutes i get on my mobile phone contract).

    my mobile is a pda phone (blue angel, mda III,
  • Cringely writes:
    "Skype threatens only incumbent FIXED phone service, not mobile service. Skype causes headaches for Verizon, but not for Verizon Wireless"

    Wrong. Big cities start talking about Wifi wireless coverage across the entire city [boston.com]. Why would you spend your precious cellphone minutes in a Wifi enabled city, if your friends have Skype too?
  • Why a politically motivated person like Murdoch would want Skype has nothing to do with it's ability to turn a profit. It is one and the same reason Google created gmail, AOL, Yahoo and MS their email and IM services, in a word: data-mining (ok, two words).

    When you sign-up for any of these servers you'll note there is no guarantee that anything you type or say will be kept private or secret. On the contrary everything must be sent through the provider's servers where they can parse it at will. From stock
  • Hey, like everything else this idiotic old prune and his reptilian-dosed nano-eating-offspring manipulate, this current ridiculousity is but another apsect of the murdoch philosophy, clarified crystal by interpreting correctly the old saying HE HAS ONE HAND OUT AND ONE LEG UP. This whole farce and fiasco is just a SKYPE HUNT, which of course is easily confused with the legendary SNIPE HUNT, and thats ok because the two are very much alike, virtually interchangeable, no major differences. I think you shoul

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