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October 1, 2007

Why VoIP Innovation Died with Skype

This post reflects on eBays stewardship of Skype, the failure of Skype to remain the innovator in VoIP, Skype Marketings failure to maintain momentum, and some challenges for the new CEO.

Andy Abramson's blog woke me up to the Management Shake Up At Skype this morning. I'm happy to leave all the money posts to Bloomberg, WSJ, Skype Journal, GigaOM Valleywag etc. For me, my interest today is not about the money. It's also not about Meg Whitman / megatwork either although I wonder why no one comments on her ability to continue holding her job after such a write down and payout. The numbers say the eBay strategy has failed.

I blogged Skype from the very beginning, I followed it, I founded Skype Journal (as other eg Inside Facebook and similar today) for two years I was completely committed to "What's your Skype strategy?". Then eBay purchased Skype. I know I felt I had lost something that day. It also shook my beliefs. So watch out Zuckerberg; careful what you do with Facebook!

Skype started out in 2003 like a Web2.0 startup today. Niklas and co managed without the blogs although put in a Forum very early on. There early adopters solved problems, told stories, and requested new features. Janus Friis who wrote today about the earnout and the history has applied all the lessons from Skype, getting users, developing a dialogue, beta, etc to Joost and the companies Atomico is investing in are similarly Web2.0 centric.

(not) just another monday » Janus Friis

The other project is Atomico. Atomico is our new risk capital group where we invest our own capital. We have already, quietly, invested in many companies such as Technorati, FON and Last.FM, and now we are going to take it to the next level.

So why didn't Skype become another Web2.0 powerhouse? Simply the money! The VC's choose to sellout (given Skype's apparently under performing record since on revenues - remember this was the models the VC's pitched and sold) just as Skype was beginning to emerge in a Web2.0 vein. Efforts to start a formal developer program were rushed; however, by that time Skype already had their API; really cracking open new opportunities for devices, and software enhancements. Concurrently, an element of conservatism stepped in. Call Transfer, Headless Skypes all talked widely prior to the sale remain limited even today two years later.


Impact on VoIP:
Skype  failure to perform has directly impacted on the VoIP category. Skype made a mistake by not selling up the category; talking the category (search google today VoIP and Skype isn't mentioned) or more broadly communications. In fact if you look at the Skype homepage today all links to forums, blogs etc are unavailable or deleted. The homepage says nothing about what it is other than cheap phone calls. VoIP was always about more than this. It was also about the revolution in communications and what happens when the cost of a call goes to zero. When I see this, when I look at a page like this there is only one place to point the finger. It's at marketing. It should be noted that Niklas stepped down and Marketing was the department that lost its head.

Failure is Marketings:

The real problem at Skype after the initial launch and growth has been marketing. Niklas and Janus are not marketers. In fact they were always surprised that Skype took off as quickly as it did. Some may beg to differ with my conclusion saying Niklas was the most brilliant marketer; look at what he sold etc. In this regards the team VC's and Niklas and Janus were. I have always thought the problem was "marketing" which for the most part has remained faceless for four years. I cannot rest all responsibility for this at Niklas's door; rather I'd point to the VC's and more importantly eBay which has had two years to get it right with their own people in charge.

eBay marketing took Skype from what was on the cusp of being one of the first Web2.O companies and made certain that it embraced 1.0 mediocrity. I would have thought they would have known better with their community background; the problem was the types of people they talk to. eBay isn't about consumer marketing; it is about marketing and supporting small business. Skype is about you and me. Ebay never managed this. They couldn't understand why skypers never asked for more than a great calling experience and lower rates. Concurrently, they didn't listen or provide feedback to the people and community that could. They turned their back on the innovation engine and tellingly more and more engineers left.

The problem is marketing product leadership, capability to engage users, and ability to keep innovating around new services. Example today, Skype has an active user base that is much larger than Facebook's for a service that is much more mission critical. And yet Facebook could usurp Skype and the Skype network tomorrow if they so choose. Those that tend to be most passionate about Facebook today, were once most passionate about Skype. The apps this same group are now developing are directed to Facebook not Skype. That's a shame. Skype's strategy timeframe also isn't six months. They don't have the luxury in looking and spending months finding a new CEO. In six months they could be irrelevant.

In a world of rapid change Skype doesn't yet have the network affect working for them. Unlike eBay, and less so PayPal, Skype is not a universal channel for communications. I still believe it could be. The actions that could have thwarted competitors, accelerated growth still remain; however are now too risky because of eBay, ownerships and money. Skype has four possible plays which it failed to capitalize on 1)Directory, 2)SIP & Identity, 3)API 4)Presence. All of these possibilities were well known to evangelising Skype users and early beta testers. I've certainly written about them all on more than one occassion.

In the beginning Skype had a launch program with news every two weeks . PR Before eBay - An Era Over. This was in place until eBay took over and since then the PR program has been all downhill. Kelly Larabee was marketing and the Skype PR queen before it all went wrong. PR is a Marketing responsibility. It failed again on the recent Skype Outage; the outage wasn't so serious... the response and management was.

Skype is not longer creating new stories. Stories of intimacy launched Skype. Today these stories aren't even told on the home page. You simply cannot have viral growth without stories and new reasons for delight. Januus Kase launched blogs at Skype and left some time ago. Still why would you stay when your company won't let your passions spill over into the real world? In this quote Niklas celebrates what Skype has achieved: SCOOP: Zennstrom defends Skype while stepping down

“Beyond creating a business, Skype literally touches millions of lives and this is something to be proud of,” Zennstrom said. “I would like to think that we have contributed to making the world a little bit flatter.”

I concur!

Skype Choices:
Skype must face up to either competing as a telecom or becoming the 21st century communications company it started out to be.... getting lost along the way. With eBay ownership I don't give much credence to the latter; and I'm no longer sure or close enough to the company to know what they could do if challenged with new directions. When they were many times smaller it was obvious. They could and did change the world. Few companies get absorbed by large ones and continue to innovate at the same rate.

Skype CEO? 
You would hope the search has been on quietly for months. (Nah... I never got a call!) Who gets the shot will tell the world many things about  what Skype will become.  Some criteria.



  • Visibility: The new CEO will / must be very visible. They will either hold or lose the confidence of remaining developers. Learning to talk Skype will be a problem. Skype is less than four years old. As there are no internal candidates finding someone that can talk Skype (not as telephony) is a major challenge.

  • Guts: They will have to be a hard ass on the numbers. Skype is already in a price war, it's time to take home the advantage while creating new value which will take some imagination and real pressure on the organization. That's may or may not be a problem for eBay. Depending on the "agreement" it will have an impact on the new CEO, their flexibility, and the time given to finish the job that Niklas started

  • Beliefs: They have to have deep seated beliefs. Winning in this world will not come from quantitative research; rather it needs a higher level of experimentation, more transparency, and the building or a real open community. Skype is closed. Skype must be opened up. Few candidates will know how to do this.

  • Facilitate: Skype still learning has a young team and some good old fashioned recognition and encouragement is required. Skype cannot grow bigger without growing responsibilities of those that are there today. Any new CEO must know how to put in place an accelerated listening program.

  • London: the Red Herring choice. Should the new CEO simply move the company to Estonia? Politics and autocratic rule have still to be overcome. There are always hard choices to be made. Marketing is the first area to address. Adding to the marketing team will help to re-shape it without killing the gems that remain. Eg User Design.

  • Product Acumen: Skype wins or loses not based on the US, rather on India, China, Brazil in the longer term. It cannot win at all without a mobile strategy, in fact a Presence, View, Talk, Text, or Post strategy. Communications is multi-modal today and multiple devices. Skype has understood this better than most; however is yet to press the advantage home. New competitors are also increasingly everywhere... It is not the IM clients, or the telecoms anymore. Facebook and Google remain the real challenges.

  • Power of Three: Does he/she say bullshit? eBay appears to be incapable of integrating communications into their selling process. How much management attention and time will eBay require of the new CEO? Anything over 10% and we know that nothing will change.

Note I wrote this post just after the sale to eBay. Skype Chapter 2. I cannot be more disappointed today. Almost all the reasons I wrote for the deal to be done... have not been done under eBay's stewardship. The one thing I learned later and did not know at the time was that eBay had never bought the video rights or capabilities. That in itself shows the real lack of foresight and understanding behind what they were getting in to. Perhaps eBay will never be able to extend their market to conversations. Long term that's an error.

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October 8, 2007

Facebook Profiles

I hope this isn't true! Structuring profiles eg (business or professional vs personal) is so limiting and isn't representative of the flow that exists between different relationships. If elements of a profile are to be limited then the controls must be much more precise. To go from one to two profiles leaves me with the same problem. Are they both on... is one on, are they both off. Profiles are outputs of how we group and tag information... and then grant access to it.

This issue is another facet of Stowe's message re groupings. You must enable it so I can assign more than one tag. Group Tags may have different access to different information. If you are a member of more than one group you may have access to more or less profile information. Eg you can be my Friend and my Colleague.  This may also relate to time of day, my state (what I'm doing) and how I perceive my relationship with you. In reality we can't manage every piece of information on a per user / per relationship basic. However, we should also remember that just because we make it available... others may choose not to subscribe.

Laughing at Facebook’s “older” users « Scobleizer

IBM has about 20,000 employees on Facebook. We’ve explored how that can be used for internal communications/engagement objectives, and have discovered that there’s real potential - though many prefer to keep their “personal” and “professional” lives separate (I call it the “do I want my boss to see me in my bathing suit?” problem.) If Facebook can solve this - and the reports from last week that they’re developing a way for users to have dual profiles suggests they’re trying - FB’s value for networking will increase considerably.
Where Facebook can really innovate is in the controls area. Tags should also have controls that determine what's shared, how long, privacy, expiry, etc.

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Social Tools - Reinventing the Communications Hub

Lee Bryant writes an excellent post on Social Tools for Internal Communications. Includes adding value by "social filtering", the "social stack" and how social tools are adding value. It's a must read. I've pulled out a quote from it below that relates to what I have come to think of as typical aggregator management, reading and bookmarking behavior. (Lot of posts on this topic recently.) Points I'd like to add

1) Consider Lee's comments overall in terms of the impact on communication within the enterprise and how social bookmarking is becoming an increasingly important communications hub.

2) Explore how use of these tools relaxes control and yet speeds up the flow of input and assessment in real-time. Similarly how their impact on attention data can expose "things" that otherwise may be missed in the more traditional silos and KM pyramids.

3) LISTENING: For me all of conversational marketing; getting PR and Ad agencies on board starts with listening. I'm certain most companies do a lousy job of listening. RSS / Newsreaders and a social bookmarking strategy are you first steps in learning how and where to listen.


Headshift :: Social tools for Internal Communications

From my 300+ sources, I may skim read 1000+ items every day, of which I might bookmark 10; if something really newsworthy is going on then I might write one blog post or internal analysis based on one or more of these signals. That means that as an individual, I am rigorously filtering my information inputs by amplifying the signals of 10 stories and perhaps adding my own insight and analysis to one key development in any given day. Imagine for a moment that a significant proportion of 5000 person knowledge organisation do this every day. The resulting social signals about what is important would be incredibly useful to the organisation as a whole, and would provide a far greater return for the overall investment of time and attention than unconnected reading and research. Creating this kind of flow for signals, information and insight is one of the key objectives of a social knowledge sharing strategy.
Net Net. What I'm seeing. We are again in exciting times. The social tools, and meta data are going to continue to reinvent the communications hub. This will have important ramifications for both directories and "click to connect" futures.

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Brand Conversations - PR Clippings

This is a perfect story for a brand to pick up on or at least tag. If I was a Skype brand manager today I'd want to capture at least a link or a bookmark. I'd also want this capture visible to all (on the Skype website or my BM link blog), and a comment left on the blog. The Skyper in this post is a brand advocate and I'd wager introduced more than a few people to the joys of Skyping. Clarence Fisher is a teacher in Canada, he is writing about Classroom 2.0 and New Literacies in Action. His post represents what we look for in facilitating "conversational marketing". Skype's brand was built on a combination of conversational marketing and simply viral uptake. However, it was the stories that created it.

Many brands have stories like these. It is easy to demonstrate for almost any organization in minutes; certainly not hours. The majority of companies don't see them, if they do they don't recognize them or use them as an asset which they are.

Remote Access: Expectations

I have realized that my kids have the expectation, the realization, that this type of communication is even possible. Even though they live in a small town in the middle of nowhere, they will constantly look at my Skype list and ask me where people are from. They understand that this type of full, two way audio and video communication is easy enough that it can be done while I am doing dishes or cutting up vegetables, getting ready for supper.
Note: this post just appeared in my Technorati "Skype" newsfeed. Just scrolling down I see two more that reflect positively. Earlier today I furled a link to Your Brand is not my Friend. In the context of social networking sites the author was correct; and yet I'm sure "Skype" is Clarence's friend.

Some questions:
How are you consuming / receiving information content like this?
Do you recognize it?
Are you still just satisfied with PR clippings once per month? (What does that cost?!)
Do you have customized feeds?
Who is responsible?
Are you getting real-time updates?

I'm convinced that conversational marketing starts with listening. Listening enables the conversation. Bookmarking content empowers the need and the understanding to wade in and learn more.

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Dina is on Wordpress

My blog buddy Dina has used a Radio Blog from the very beginning. Sometime after setting her up I went on to MT and we've run projects there over the years. Still, it is hard to change a blog platform once you are wedded to it. In that way it is a little like a bank account... it seems like a lot of hassle to change and then finally you have to bite the bullet. I personally think this is even worse with hosted services which will continue to take your money so you can keep your blog and history there.

So Dina has a new blog and I will shortly move mine too; again to Wordpress; using many of the plug-ins that we have been experimenting with on Mosoci.

I will blog separately on the plug-ins, what we've learned works, what new things we can do. I know we are taking our use of these tools to a new level.  Separately, when you have blogged for four years at the same URL; have feeds etc. you have some trepidation about moving to a new location. Despite all the "you can import and export" your content often it isn't easy to retain your URL's and thus a change breaks links. One way we have dealt with this is to create Google custom search engines which merge the search for new and old content.

Conversations with Dina (old) Conversations with Dina (new)

New Blog URL - http://dinamehta.com/ Subscribe via RSS 2.0 - http://dinamehta.com/feed/ Subscribe via Atom - http://dinamehta.com/feed/atom/ Comments feed - http://dinamehta.com/comments/
So update your reader.

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Andy Abramson - PR & Blogging

Andy writes about his clients many of which I read and says Clients Who Are Blogging-Makes My Heart Go Pitter Patter

Blogging has given each company a chance to tell their stories in real time, and with as much detail is needed. Some choose to write mostly about their own exploits, while others write about the space they play in. Regardless of which tact they all take the key to this is that viewpoints are getting to the public faster now than ever before, and for that reason blogging clearly is making it better for the end user because when it comes to audience and numbers in the blogosphere "its not how many, its who," I always like to say.
I cannot think of another PR firm that can put this claim and support it with so many blogging related activities (eg the Nokia program).  If your firm is in this position then I'd like to know who you are. I suspect (although I have never read it) that Andy will no longer take a client that doesn't have or want to have a blogging strategy. I see this as a "massive shift" in how one PR co can pitch vs another. I'd also see it shaping the type of services provided and the education services that may overlap or be a prerequisite to creating the business relationship.

I'd like to add to Andy's post and I'm sure even some of his "blogger" comrades may pick up on it.  I believe his blogging clients have learned to:

1) listen more effectively
2) track what users are saying and wade into the conversations
3) reach out to people... sometimes I think with surprising supportive results.
4) build beta beta test programs.
5) speed their response rates and know where to take action

I'm betting that:
a) their dollars have gone way further
b) they are seen as more authentic industry leaders - builds profile
c) better prepared for any crisis should it come / happen.

The best recognition is the results that his clients have had within the VoIP arena, visibility, sale, etc. I have used both Truphone and Nokia as workshop case studies to illustrate some starting points.

Andy, I'd love to see you share more on Blogging and PR.

  • The fall of traditional media,
  • blogger outreach programs,
  • what makes a good blogging client,
  • pitfalls to watch out for
If you are a demanding corporate blogger --- what should you demand from your PR firm?



  • What category strategies are you and your PR firm jointly enabling?

  • What collective bookmarking may be available to you?

  • How are you collectively shaping Industry direction?

  • What metric are you applying?

  • What search criteria are you using?

  • What's your tagging strategy?

A blog doesn't always start and end exactly the way you expected. I find that blogs often shape themselves; depending on the day and what else one's seen. As I've recently been talking to more and more brand marketers in traditional firms I'm seeing that their PR and Advertising firms generally are not serving them well. These firms are not staffed to handle the new environment, while the clients are usually not accountable for "conversational marketing", conversations or the impact of social media. As such it remains no mans land for many organizations.


October 9, 2007

Stalked by your Mobile

Jeremy writes an excellent post on Jaiku's purchase by Google. Stowe noted it's ramifications for telephony and others being blindsided (I agree with this and Google is being underestimated). Aswath takes another angle in referring to OAuth. Identity is certainly in the mix. I'll only be happy when it is under my control; networked, searched or not...

loose wire blog: Google Jaiku: It's About Mobility

All this information outlined above would be available to Google, to let them fire ads at us. For the first time, as far as I know, an advertising company not only has access to what we're doing (our presence message), they have access to where we're doing it (the cell ID etc), what we're doing next (the calendar), how long we'll be doing it for (the duration of the event), whether we're focused on something else (indication of whether we're on a call), as well as the usual preferences we may have registered in our profile (gender, age, interests, etc.)

The point here is that Jaiku is one of the first of such tools to shift the social web to the mobile social web......... But perhaps now is the time to ponder just how much personal information we either consciously or unconsciously hand over when we use them, and how comfortable we are about it.


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About October 2007

This page contains all entries posted to Unbound Spiral in October 2007. They are listed from oldest to newest.

September 2007 is the previous archive.

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