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Summary:

Skype’s new owners should be aware of one small thing: They are paying $2 billion for a company that, despite having more than 400 million subscribers, doesn’t know how to leverage that platform. Why? Because it doesn’t understand developers. It never has. We have consistently pointed […]

skype_logoSkype’s new owners should be aware of one small thing: They are paying $2 billion for a company that, despite having more than 400 million subscribers, doesn’t know how to leverage that platform. Why? Because it doesn’t understand developers. It never has. We have consistently pointed out this lackadaisical attitude towards its developer ecosystem. The fact is that if you put your lot with Skype, then you are really on your own. Today the company announced that it’s killed Skype Extras, an API-based effort that was launched with much fanfare in June 2007.

Extras are third-party applications (or plugins) that can be added on to leverage the Skype network. For instance, Skylook, which marries Skype with Outlook. The company, which never really got its act together to promote these and the Skype ecosystem effectively, today sent out an email to its developers saying that it’s killing Extras:

Unfortunately I have to announce that the Skype Extras program will be shut down, effective September 11, 2009. Despite the incredible breadth of Extras developed for Skype, simply not enough people were using them to justify our continued support of the Extras program.

Skype will certify no new Extras, but will keep selling current ones until they expire and will support accessories via the public API. The company will “no longer allow the use of Skype credit by 3rd Party Extras developers” as of Dec. 11. What does that mean? That if you’re a developer, you have no reason to believe Skype will do the right thing, under even with the new management (and more enlightened and web savvy ownership) structure  when the deal closes.

  1. Sounds like they just don’t want to be the storefront for them anymore. I took a quick glance and didn’t see anything of tremendous value. Perhaps they’re hoping developers sell their extras themselves or just make them free?

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    1. Ravi

      I think the issue is more than just the storefront. It is basically the company’s attitude. They just killed the program without really telling the developers.

      More importantly, the whole Skype developer ecosystem has been craving for attention from the company which frankly is busy selling minutes to make its numbers instead of prompting the ecosystem.

      I am sure if you ask around, many would agree with me when I say: they don’t have the developer DNA/

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      1. Ravi,
        the “storefront” actually had some extras that promoted the use and purchase of Skype’s PAID services. Also, the DRM engine Skype used never worked properly and many of the business/productivity extras had their own payment systems. Had it worked, Skype had a robust revenue sharing agreement with its partners, and might realize that some of them are actually doing quite well.

        At the end of the day, Shai’s comments are accurate, the partner ecosystem is a model that has been proven with Apple, Google, and countless others if executed properly. We’re hoping Skype will regroup and come out with a more compelling focus on its developer strategy soon after ownership changes hands.

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  2. This is indeed bad news. I met with Skype people late last year and they were not only enthusiastic about 3rd party developers, they told me that a major upgrade to the API and Developer Program was coming this year. The only silver lining here is if today’s announcement is the precursor to that new program. So let’s stay optimistic.

    How many more examples do we need to learn the lesson that Balmer put so eloquently: “Developers, developers, developers!” http://www.youtube.com/watch?v=wvsboPUjrGc

    Facebook beat Myspace because of their platform for 3rd party apps.

    For the same reason, Apple went from zero to THE mobile platform in two years. Now RIM, Microsoft, Palm, Nokia and all the carriers are playing catch-up.

    Skype needs a vibrant ecosystem of 3rd party developers to come and use their platform for new services. Services we can’t think of right now. Services that would never have occurred to the original creators of Skype. Who could have imagined 65,000 apps for iPhone?

    There is a flood of innovative uses for the voice channel waiting for a good platform. (If I may toot my own horn for a moment: http://www.fonolo.com.) If Google Voice gets there first, Skype will have squandered a major opportunity.

    - Shai

    CEO, Fonolo

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    1. Shai, I could say more, but you did a perfect summary. I say +1 to your sentiments.

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    2. Great point about GVoice “getting there” before Skype. There’s definition something there, and it will be very interesting to see what happens with Wave this fall.

      OnState (also a horn toot – http://www.on-state.com) is in a very similar place to Fonolo. We make virtual call center and virtual PBX software that is platform independent, but Skype was one of our original platforms of choice, and remains a reliable underlying source of communications for us and many of our clients. So while the impact of this move will not negatively affect us, it remains a bit of a head-scratcher nonetheless. I’m hopeful that this is a move by Skype to rid themselves of non-productive “partners” (not all the dissimilar from what they did to the partners section of their website back at the end of April) and come out with an enhanced version later. Some insight on this would be helpful, though.

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  3. This is indeed idiot-stick behavior on Skype’s part.

    But it’s also a frank admission that they didn’t have a sustainable strategy as a platform. Their new owners are sure to be up to some new approach, as they can’t help but envy the iPhone/iTunes phenomenon, as well as Twitter and Facebook’s success with developers.

    What this all proves is that you don’t succeed alone — partners are how you get the leverage and monetization opportunities.

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  4. Mishan Kontroll Friday, September 11, 2009

    Skype had add-ons? Who knew? The frustrating changes to the Skype UI (on Windows, anyway) discourage me from looking around that app.

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    1. But it is still a damn good way to make calls ;-)

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      1. On a recent project, the company I was consulting for used it for conference call meetings among dispersed developers. It worked okay, except when it didn’t.

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  5. We ARE a Skype extra (PBX/Call Center product) and just recently came out with our newest version to great reviews. Now I’m not sure if this development is a good thing or bad since the extras are still going to be available, just no new ones will be added might possibly put uncertified applications (like us) on a more equal footing with certified ones (which are not necessarily better solutions).

    Not a bad time to explore other platforms though..

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  6. Skype’s defunct developer ecosystem cannot be revived by its new owners, even if they wanted to…

    …Adhearsion has made it obsolete.

    http://adhearsion.com

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  7. The problem with the “Extra’s” has never been lack of interest or lack of developers, but simply the lack of a real API. The client messaging API that Skype has had (and will continue to support) has very few actual uses outside of hardware and client software mashups. A few great apps., (like Skylook) filled a space where the Skype client itself was lacking – but that is hardly the basis for a robust ecosystem. They have had a history of eating their own children, as the current API really didn’t give developers any security that their app. wouldn’t just be included in the next release of Skype.

    The real opportunity lies in some of the new things that are being developed using new API’s that are being tested now, if you Google around the Skype for Asterisk channel driver you can find mentions of Mark Spencer talking about ‘Skyhost’ – and how they built the S4A channel driver using this.

    Skype is not slapping developers down, they are merely redirecting resources to where they should have gone years ago – this is new information to them, but they seem to be able to actually make decisions now without interference from clueless brass of their former owners.

    Having said that they deserve the criticism with all barrels for releasing a rather ambiguous statement, about the future of the developer ecosystem.

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  8. does anyone know what happnd to jajah? are they still alive? whats the revenue that company is making?

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  9. Laura Merling (@magicmerl) Friday, September 11, 2009

    What is happening to Skype is a word of warning to everyone rushing to build and launch their API – tech company, media, retailer or otherwise! It takes more than opening your api and putting up a website.

    Developers will help you create an amazing ecosystem if you make the effort. It means everything from being responsive to providing extra access to those doing cool stuff, to finding a way to reward them either via visibility (fame) or letting them make money (fortune). The early things eBay did well included having people who identified the top applications that brought value beyond just the eBay community and they helped them with introductions to VCs and potential partners and they gave them access to unique data sets that others didn’t get. The list goes on….

    Your API program takes a lot of planning and management ongoing. Some key things to think about..
    - Why are you doing this? (traffic, direct revenue, brand awareness)
    - Who is your audience/api consumer? (suppliers, independent developers, affiliates)
    - Is your goal to be a platform (ebay), content provider(NYT), affiliate program(AWS) or functionality/service(Calais)

    Developer ecosystems are tough to build, but once you do, the value is worth the challenge. Ask eBay, Amazon, and more recently someone like Thomson Reuters Calais team.

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  10. Strange thought: Is Skype preparing to abandon its P2P architecture for fear of losing to JoltID?

    Skype built its franchise on the P2P architecture which let them offer free calls between computers, and super-cheap calls between a computer and a landline. But their recent business initiatives show them moving toward selling VOIP minutes in bulk to PBX providers like Asterisk and Shoretel, even though this doesn’t take advantage of the P2P architecture and the Skype client.

    Dropping developer outreach to the client suggests (maybe?) further deemphasis of the P2P model. Are we seeing them prepare to abandon their not-so-secret advantage?

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