Skype: “Catch Us if You Can!”

February 1, 2004

in Skype Journal, VoIP

A great article in last weeks (Jan 26th) Fortune written by Dan Roth on Skype. He travels to Estonia and beyond tracking down and talking to the creators of Kazaa and Skype. Can’t help but wish I had been travelling with him. For potential innovators what is interesting is that Skype emerged from over four years of experience. Experience in the music industry, experience building P2P systems and a perspective built round intellectual property, lawyers and regulation. Headquarters now being established in London.

Two quotes really caught my attention.

It costs Vonage-the top provider of paid Internet telephony, with 97,000 users-almost $400 to add a new customer. It costs Skype one-tenth of a cent.

“What Skype is doing is like a toy,” says Hossein Eslambolchi, AT&T’s chief technology officer and president of AT&T Labs. “They will realize they can’t scale it, they don’t have a brand like the AT&T brand, and they don’t have the local footprint, which we have. It’s going to be very hard to compete with someone like AT&T.”

I would have liked to have seen (in Dan’s article) some reference to Skype’s experimenting with forums and even bloggers. The “SkypeMe” initiative, the rapid infusion of ideas has from my perspective clearly helped Skype. My bet is they are learning from their marketplace faster than the “traditional company” or organization. That’s a cost saving for development. The trick now is to accelerate

Add to that the tenth of a cent that they are demonstrating very effectively. Orkut like Skype is capturing people at a very low cost. I mentioned it with my first post on Orkut that I’d already created a larger network there than on Ryze or any of the other networking services. It’s also true for Skype. However for Skype I don’t know if I’m unusual or not (I assume I am) however I have more “connections” on Skype than I have on MSN, Yahoo and AIM combined.

Then there is the other perspective my SBC bill last month was $72m my Comcast Cable $91(std tv + broadband) and my mobile $70. Franky I can’t wait to get rid of SBC, that is the least useful of all these services. I only keep it for international calls for which my bill has been cut by more than half in the last five month due to Skype. Plus I spend more time talking.

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