[“Uncle!  Uncle!  I give Up” — I really thought I could make it as the last hold-out in the VC Blogosphere NOT to comment on the Skype-eBay (or is it eBay-Skype?) Deal — Wrong again — cgm] What the Skyp…

“It’s best to do one thing really, really well.

Google does search. Google does not do horoscopes, financial advice or chat.”
- from “Ten Things Google has Found to be True” (http://www.google.com/intl/en/corporate/tenthings.html)

Rumor is they are in town (sValley) and talking to anyone with a check book.

Sad.

“We derive most of our revenues from fees we receive from our advertisers.”

You may live in an ideal world where broadband access appears for free from the heavens and corporations exist for the sole purpose of creating pleasing things. Congratulations.

Free voice is very compelling. Skype is a wonderful product. But the shareholders of Skype expect a (perhaps monumental) return on their hard dollar investments. And the shareholders of Google would expect a return on their investment. Google has many choices to make: where to throw $1B is a big choice and one that Google’s shareholders would expect to yield dividends.

If Google were to throw $1B at Skype, the expectation is that they would have to monetize that fickle audience. Google’s primary method of monetization today is advertising.

Discounting whether or not Google is evil or wonderful, Google’s business is advertising. When I see articles proclaiming that Google must buy an IM client or Google must buy Skype, I have to wonder where are the IM and Skype users (I know – one and the same) that want to have advertising crammed down their throats on their Skype client. Sheesh.

Whenever we think that things are cooling down for a while, not one, but both search engine giants jump up to remind us the war is not over yet.Just yesterday Yahoo! announced that:we have grown our index and just reached a significant milestone at Yahoo!

If you own and operate the infrastructure, you get to make decisions about how it is used and how it is monetized. Public networks may actually have more problems in getting this right because they deal with more voices. When a cableco is evil, you can usually figure it out because of the obvious motive. Munis and Coops end up with numerous motives and opinions. Just think about how your local public schools operate.

Shortly after the town of Muttsville builds out a muni network with high ideals and tax dollars, Cisco will whisper in the ears of the IT guys operating the network that it would be very high minded to offer telephony on that network. After all, wouldn’t it be great if the free networking put in the public schools for the children included a phone in every classroom. Plus, the IT guys would add another few letters to their Cisco certifications, the IT department would add a couple more headcount, and what a grand project that will be.

Soon the town council will be given the proposal and they will agree that it will be of great benefit to all to start the Muttsville Telephone Cooperative on the muni network. And it’s great that the mayor’s own son-in-law knows enough about eye-pee to join the IT department and participate.

Time marches on. The take rate for telephony is luke warm and suddenly the added use-tax for telephony isn’t covering the added expense. “No problem” sayeth Cisco sales dude “We’ve seen this before in Cattsville.” You need a thing called packet shaping and policy management on your network. With packet shaping and policy management, you can really really really make sure that Muttsville Telephone Cooperative offers the best kind of service.

And the other Skypes and Vonages of the world offer the worst. Before you know it, for the greater good of the children of Muttsville and the benefit of the Muttsville Telephone Cooperative, Skype is mucked with.

People, groups, councils, organizations, governments, corporations – they all make decisions on policy. Since the technology exists to readily squash various applications on a network, you can be assured that policies will be created to do so. The only things that change, with some subtlety perhaps, are the motivations.