Yahoo to Lock out Trillian

September 18, 2003

in Accelerating Innovation

Are you a Trillian user just trying to keep your chat consolidated? At the beginning of the phone system there were different companies. Those on one network couldn’t connect with another. Well looks like Yahoo is making a fatal blunder following Microsoft’s lead to close out third party clients. See the CNET article found via this blog.

For all the aggravation brought by incumbent telcos, the thought that organizations such as Yahoo or MSN could replace them to provide our basic communication infrastructure is even scarier. Heres a simple action plan to send a clear message that were. [Oliver Travers]

This closed door mentality is just one reason 525000 people have downloaded Skype to date. I’ve seen 34000 so far today online (up from 32000 yesterday). I keep saying it beats MS and Yahoo for voice quality while still beta. I’m not wedded to any of the above IM clients for I’m not 11 years old (my daughter will be harder to shift from AIM) and don’t particularly like multiple text conversations. However while I failed to really convert my parents and many friends to IM chat, I know Skype provides another opportunity. Now we are talking phones something they understand. For them a Yahoo upgrade or lock-out is is just a bore.

Why is it a strategic blunder? Yahoo is looking at their “former” competitors and is unwilling to think forward. I don’t think they ever had a strategy for “Your Computer is Ringing!” Now what if ringing and entertainment file sharing are brought together via a plug-in strategy? Sharing music (access to anothers Hotlist) is just an individual hack. It’s the card that won’t be played for a little longer and it won’t tie to Kazaa.

Trillian’s blunder is also just the type of strategy I was warned and advised about yesterday. Tying any business to Skype at this early stage is a “test” to get learning for an emergent environment. It may pay off, real big time. Then again Skype’s business model is not declared. There is risk there. The strategy questions continuue – who, how and what will shape the value equation in the P2P telephony market?

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