Christensen was the vice president of emerging opportunities at Skype, a division of Microsoft. In that role, he was responsible for getting Skype into new platforms such as Internet televisions and set-top boxes. He was a big champion of Skype’s platform effort. On the eve of the launch of SkypeKit program, he told us, “One of the key pillars of the communications network is that it follows Metcalfe’s Law, and so to date with things like Facetime we’re talking about services with limited support for devices, while our strategy is to be on Android and everyplace else we can.”

Here is Skype’s official statement on Christensen’s departure:

“After six years in key leadership roles with Skype, Jonathan Christensen has left the company to enjoy time with his family and get energized for the next phase of his career. At different periods during his time at Skype, JC has led the Audio/Video, Core Library and Skype Developer Program teams, in addition to overseeing our platform and partner initiatives with consumer electronics manufacturers. Skype wishes him every success in the future.”

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Their plan, they said, was to upset the payments industry by making it radically more simple and less expensive to move money from one country to another.

It wasn’t a message the audience particularly wanted to hear — after all, many of them profit handsomely from wire transfers and exchange markets — but the company got a fair reception, according to co-founder Kristo Kaarmann. “There were a lot of smiles in the audience,” he says.

Chances are those smiles were covering up some uncomfortable feelings, however, since Transferwise is one of those startlingly simple ideas that has the potential to be incredibly disruptive.

Here’s why.

Traditionally, people who want to send money to another country and in another currency (say from American dollars to Indian rupees) will go to a bank or an agency such as Western Union to organize the payment. They will pay money to the broker, who will then wire the money into the recipient’s bank account or destination for a price — usually at an exchange rate significantly worse than the underlying market figure, and often with fees or commission charged on top.

Transferwise makes things simpler by making the process much more transparent.

Instead of wiring the money into the recipient’s foreign account, it handles the back end by simply having accounts in the countries and currencies it needs to. That means when a customer wants to send some money, she pays it to Transferwise at one end, and the company can then pay it out to the recipient at the other end from a different account, directly in the target currency.

In order to minimize its own capital needs, the company tries to match payments on one side to payments going the other way. But if there are no matches it simply hands over money from its own coffers.

It is a simple idea that sidesteps the usual red tape and delays around international transfers — and allows the company to operate at lower costs, too. Those savings are passed on to the customer: There are no expensive wire fees and no cranked-up exchange rates. Instead users get charged a flat fee (£1, around $1.56) on small transactions or a small percent on larger sums.

It’s peer-to-peer payment — a sort of Skype for currencies.

The Skype analogy is no accident, either: The other co-founder, CTO Taavet Hinrikus, was an early employee at the telephony firm and has experienced the thrill of using the Internet to challenge a huge, expensive industry from the inside.

Since launching quietly over the summer as a self-funded startup, he says, the company has saved users £250,000 ($390,000) in bank charges and organically grown a core of regular, dedicated customers who are helping spread the word.

Just getting started

Today the service is small, not least because it only works between two currencies: sterling in the U.K. and Euros. The team plans to roll out soon into new areas – first low-hanging fruit like the Swiss franc and the Polish zloty but then hopefully into other, more lucrative markets with very large expat communities. It is eyeing the Australian dollar, the South African rand and ultimately the U.S. dollar and Indian rupee.

That expansion will require a lot of regulatory work, since the company must comply with financial rules and laws to prevent its being used for money laundering (this is one significant benefit of starting in Europe, where a single regulatory burden covers 500 million people, 27 countries and 14 currencies).

But it will also have to work hard to outflank the banks, which are unlikely to be happy to lose any custom, and gain user trust — something that the team knows is going to be tough.

Kaarman says this is an area where Transferwise is moving carefully, because “the day you lose your first customer’s money, you are in trouble for a long, long time.” He’s right. A false step could easily kill off a startup.

So what comes next?

More currencies, more users, more awareness are all important — and to get there, funding could be high on the agenda.

So far the company has been self-funded, and it only has a skeleton staff. Scaling up will require more investment. If nothing else, it needs significant capital in each country it enters in order to guarantee prompt payment. However, given how straightforward and useful the service is, I don’t think it will be too long before there is some significant investment coming in.

Photograph used under Creative Commons license courtesy of Seedcamp

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Mu Dynamics makes a collection of products designed to show what happens when an app scales on infrastructure, from networks run by ISPs to servers running web apps in the clouds. As part of its efforts to sell more products, it’s embarking on a mission to educate both ISPs and app developers about how the software people are building today can affect the infrastructure if the software is widely adopted. Mu provides the equivalent of an infrastructure stress test.

For its latest test, Mu looked at Skype’s voice calling and chat functions across a bunch of different devices running different operating systems. A previous test looked at how Netflix traffic affected networks when compared to YouTube or other streaming video traffic. Netflix didn’t do well.

For the Skype test, Mu’s service made multiple calls to the Skype test number that lasted the same amount of time, measuring the data transmitted and the behavior of the packets to figure out how it would treat an operator, and how much of a data impact it would have on a consumer. Neither voice calls nor messaging had much of a data impact for the consumers, although in both cases running it on Mac OS X consumed the most data.

The results of this and other Mu Dynamics’ studies show how developers need to consider the infrastructure they’re running on as they design for the web. At the same time, the infrastructure providers have to understand the types of applications programmers are building and their consumers are consuming. In the case of server infrastructure, the end customers are the developers, which makes the relationship simple: the infrastructure or platform provider seeks to make developers’ lives easier so they will build on their services.

But in the case of ISPs, developers and the ISPs are both selling to end-consumers, and neither has a direct reason to talk to each other or work together to understand how the applications affect the infrastructure and vice versa. In a competitive broadband market, this might not matter because consumers could switch their ISPs easily if their Netflix or Skype ran poorly. However, because broadband access is essentially a duopoly and ISPs may have an economic interest in making sure certain apps run poorly, maybe Mu Dynamics’ can help provide — if not an incentive — at least information that could help booth sides meet in the middle.

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Just how will Microsoft make money off Skype? Microsoft CFO Peter Klein won’t say, exactly.

Microsoft closed its $8.5 billion cash buyout of Skype last week, and Klein, speaking on the company’s first-quarter earnings call Thursday, wasn’t ready to talk much about plans to capitalize on the popular VoIP phone service just yet.

But, he gave broad-brush indications of where Skype’s technology and features could end up:

Now that the deal is closed, we are starting the integration of Skype’s world-class services and global-networked platform across our portfolio of products and services including Lync, Windows Live Messenger, Windows Phone, and the Xbox platform.

Skype will be part of Microsoft’s Entertainment and Devices (E&D) business unit — home of Xbox — going forward.

Microsoft welcomes “the over 170 million people who rely on Skype for their voice and video calls on a monthly basis,” Klein said.

The 170 million number is interesting. By all accounts, the total Skype user universe is far larger than that.

“Highly engaged” Skype users spend an average 125 minutes on the service each month, he said. That could be an opportunity for Microsoft to bolster its online advertising business or to sell more premium (ad-free) services.

Analysts really wanted Klein to drill down into more detail but he deferred that discussion. Microsoft will start folding Skype numbers into its results in the second quarter. Overall, the company said it expects revenue for the quarter ending Dec. 31 to come in at $28.6 billion to $29.2 billion range.

When Microsoft announced its acquisition plans for Skype last  May, there was consternation among Skype users accustomed to its easy interface and inexpensive (or free) cost. A common question on Twitter was whether Microsoft would “ruin” Skype.  All that has calmed down ,but since the deal has been in the works, the competitive landscape shifted. Google+  and its hangout capability makes cheap video conference calling drop-dead easy and poses a major challenge to Skype.

Last May when the deal was disclosed, GigaOm Pro’s Michael Wolf wrote about how Skype could help Microsoft  make strides in home entertainment as a smart  TV and social networking platform for home entertainment. (Subscription required.)

Microsoft’s first-quarter earnings press release is here. SeekingAlpha posted a transcript of the analyst Q&A here. 

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With us moving away from single-purpose, 12-key-pad, mobile phones to more touch-centric Internet devices, the “voice” has been reduced to being an app. Sure, today, phone companies run that app and use traditional phone technology, but in the future, all voice communication could be from apps using Internet technologies.

On Wednesday, Juniper Research of the U.K. released a report that shows that by 2016 nearly four-fifths of 640 million mobile VoIP users will be making calls through apps downloaded on their smartphones, while rest of the calls could be over phone company networks. Even today companies such as Nimbuzz and Skype are enjoying tremendous success on smartphones, a trend I have written about many times.

Juniper forecasts that the number of mobile video callers will jump to 130 million by 2016, thanks to the introduction of mobile video calling services from most major companies and improvements in video calling technology.

Well, I guess Microsoft buying Skype makes perfect sense. Now if they could improve the user experience!

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It’s no coincidence that Verizon has filed in the very conservative D.C. Appeals court, which has previously struck down FCC rulings, and sees the FCC’s power as limited when it comes to network neutrality. It’s also no coincidence that Verizon’s lawyer in this case, Helgi Walker of Wiley Rein LLP, is the same lawyer who argued for Comcast in the ruling that called the FCC’s authority on network neutrality and even broadband services into question. Other interest groups or companies will likely file lawsuits in friendlier courts in California or other areas of the country where the judges are more likely to rule in favor of the FCC.

Of course, every case is different, and there’s no guarantee any judge, even one inclined to be more conservative, will strike down the rules enacted by the FCC in this case. However, thanks to a ruling in April 2010 by that same court, the FCC has been treading on thin legal authority with regard to enacting rules that govern how applications are sent over networks. I explained the issue in depth here, and in a GigaOM Pro report (sub req’d). For technology firms and companies that are relying on an Internet unencumbered by ISPs messing with packets on their networks, this is not a good beginning to the lawsuit.

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But in a world of schisms, few arguments are as vicious as those around network neutrality. Telecoms firms around the world have spent millions lobbying lawmakers and arguing that they deserve the right to meddle with bandwidth-hungry services. Content providers and open Internet advocates, on the other hand, say this unfairly punishes successful Web companies and promotes monopolistic behavior among broadband providers.

Both sides have been locked in battle for years, but the fight often comes down to a series of he-said, she-said battles based on assumptions rather than facts. A new report published today in the U.K, however, has tackled many of the arguments head on — and it has come to a forceful conclusion.

In a paper titled “The open internet – a platform for growth”, London-based consultancy Plum says that many of the arguments put forward by telcos are “myths”. And far from bandwidth-heavy services being problematic for broadband providers, it says, the reality is that actually require services in order to keep growing — which means network neutrality is vital.

Some network access providers have claimed that the open internet model should now be changed.

They argue that growing demand for content and applications is a problem… We conclude that there is no reason to believe that a
departure from the open internet norm would be economically efficient – rather, we find a departure from this model would risk irreversible harm.

The conclusion is, perhaps, unsurprising — particularly given that the report was commissioned by a consortium of content and software companies: the BBC and Channel 4 (traditional broadcasters with heavy interests in online video), video-on-demand company Blinkbox, as well as Yahoo and Skype.

But its findings are backed up with numbers. Residential service providers voice concerns that too much data is being used by customers, putting them in a dangerous position — but the reality is that the broadband industry across Europe is worth €155 billion, and that value is growing as broadband demand increases. Indeed, while fixed-line providers complain about data use, mobile networks say data is an important revenue driver for them.

Can these both be true? Not really, the report suggests. For fixed-line providers, the cost of delivering increasing traffic is only one small part of the whole picture and is often wildly misrepresented. In mobile, meanwhile, increased traffic has a more direct impact on costs — and yet the income generated still outstrips the money spent by the provider. “Costs are not ballooning,” it concludes.

The report also takes that another common argument — that applications and services are parasites which profit from the investment made by telcos — and labels it a canard. Without applications, it says, demand for services would be low and telcos wouldn’t make money. Plus it’s not as if everybody wants to max out people’s connections: in fact, it’s in the best interests of software companies to minimize download speeds to make services better (which is why they invest in their own infrastructure as well as using the existing broadband network).

The report certainly makes for a strong piece of reading, but its provenance means it is likely to be dismissed by telecoms firms as a piece of propaganda — a harum scarum work that invokes the ghost of network discrimination when all telcos really want to do is prevent abuse of their networks. However the report points out that even though European governments have taken some steps towards enshrining network neutrality, there are increasing examples of online discrimination, such as:

• Moves by the UK’s biggest internet provider, BT, which introduced a policy in 2009 that capped many users’ video streaming at a maximum rate of 896 kbps between the hours of 5pm and midnight.
• Restrictions brought in by Orange, a pan-European mobile and Internet provider, to prevent bandwidth being used for “non-Orange based Internet streaming services, voice or video over the Internet, peer to peer filesharing, non-Orange based Internet video.”
• Charges introduced by the British arm of Vodafone, requiring mobile users to pay an extra £15 ($23) each month for the right to use VoIP services.
• Plans by Dutch telco KPN to charge premiums for access to VoIP, video streaming and IM.

These are all incidents that show net neutrality is not just a theoretical battlefield, and requires careful examination from all parties.

It will be interesting to watch this one shake out. In a post on the BBC website, the corporation’s director of strategy, John Tate, argues that it is vital to look at the reality of cause-and-effect, rather than the rhetoric.

The report considers some of the telcos’ main arguments for introducing more traffic management… and says that, in practice, great content from providers such as the BBC drives demand for broadband connectivity, which in turn has driven fixed and mobile broadband revenues of approximately €155 billion in Europe in 2010.

He concludes by saying that Plum’s report “makes a useful contribution to the debate”.

I find that hard to argue with.

Image courtesy of Flickr user alancleaver_2000

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When social-bookmarking pioneer Delicious arrived with a new design and the beginnings of a new service, it wasn’t just a significant moment for the site’s fans and critics. Sure, the purists might not be happy — a number of features seem to have disappeared — and there’s always the chance it could revitalize a brand that has looked unloved for a long time. But it was interesting in broader terms, too.

What makes the return of Delicious really fascinating to me is that it’s the latest sign of a resurgence in activity by some of the people who were the earliest pioneers of the social-web boom, back in the middle of the last decade. Delicious, after all, is a former “Web 2.0″ staple that’s being regenerated thanks to the work of two other prominent Web 2.0 founders: YouTube’s Chad Hurley and Steve Chen.

And the relaunch is timed, coincidentally enough, just as another Web 2.0 veteran — Flickr co-founder Stewart Butterfield — also returns to the fold. Tuesday sees the public launch of Glitch, the cute, massively multiplayer online game he’s been developing for the last 18 months or so — a sort of surreal Mario-meets-World of Warcraft. (Disclosure: my girlfriend works as a contractor on Glitch, and I count a substantial portion of the team members as friends).

It’s not just a return to the front line for Butterfield, but also to Flickr’s roots. The photo-sharing site started off, after all, as the offshoot of a project called Game Never Ending. Watching these two moments is a bit like a flash back to six years ago, when the bright young things of Web 2.0 were starting to assert their influence over the future.

Welcome back, class of 2005

Six years ago, there was a crop of audacious founders who made their names cashing in and setting the Web 2.0 boom into motion. In the space of just a few months, Rupert Murdoch had purchased Myspace, Skype was bought by eBay, and Yahoo had gone on a spending spree that resulted in a dizzying sequence of purchases: Delicious, Flickr, MyBlogLog and more. These were all big bets, not least at Yahoo — which looked as if, for a while at least, it might use those deals to create the core of a new, faster company built around social information.

There’s no doubt that this group of entrepreneurs, whether they sold their businesses for millions or billions, were ahead of the game. Today, the ideas they laid out are writ large across the web: YouTube is even more enormous than it was in the past, trading links has become a real core of online activity, and no site would seriously consider launching without social elements.

But ever since its companies sold, 2005′s graduating class has seen the direction and shape of the web move away from them. Essentially, as Facebook rose, so their influence has faded. And so now we seem them attempting to come back and prove they can do it all over again: There’s Hurley, Chen, Butterfield. There’s Caterina Fake, Flickr’s other co-founder, who is currently hard at work on a new stealth startup called 2bkco (see disclosure). And while Delicious founder Joshua Schachter might not be involved in the new version of the site he created, he’s running another company dedicated to making social software more useful.

Beyond building things they like, what is it they are all trying to do? Do they want to claw back some of that influence, or prove that the ideas they had in the past are still important? It’s hard to say. Certainly, they are all more than simply lucky, because they are clearly talented people. But here’s the thing: the web looks like a very different place today than it did back then.

In reality, the company each of these entrepreneurs probably thought they could build is what we know as Facebook. But the Facebook of today is a radically different kind of service than the one they imagined, and it’s native to a different kind of web than the one inhabited by Delicious or Flickr or any of the others. It’s rapaciously hungry, unashamed to force us to behave in particular ways — and prepared to collect an overwhelming volume of data to get what it wants.

Sometimes it feels as if the early social sites are like internal combustion engines, purring away happily while Facebook powers up like a particle accelerator. And that’s why it’s important for this returning group of entrepreneurs to do more than simply bring the ideas they had in the past back to life.

Silicon Valley is populated with people who got lucky once and cashed out, usually thanks to the largesse of a free-spending major corporation like Google, Microsoft or (now) Facebook. Many simply disappear with their winnings and are never heard of again. Others return with new ideas and new companies. Why? Partly because that’s the only thing they know how to do — and partly because they want to prove that they weren’t just fortunate, they were good. And that’s the challenge facing this latest crop of success stories, too. How they fare remains to be seen.

Disclosure: 2bkco is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, GigaOm. Om Malik, founder of GigaOm, is also a venture partner at True.

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Cisco may have stopped focusing on core markets and let interlopers take ground, but when it comes to the PBX and corporate telephony market the global economic malaise didn’t help. According to data out today from Telegeography, revenue from enterprise telephony equipment sales has fallen by 4 percent during the second quarter of 2011 when compared to sales for the same period last year. Those sales include PBX/KTS systems revenues, voice gateways and IP telephony.

Cisco has kept its market share steady at 30 percent, while Avaya has gained 3 percentage points to hit 22 percent market share. However, in some areas Avaya has taken over Cisco’s top spot. From the survey:

By segment, the most notable shift in the 2011 vendor ranking is Avaya, which overtook Cisco as the market leader in IP telephony in Q1 2011, and continued to lead the market in Q2. NEC and Panasonic remain the clear leaders in the declining PBX/KTS segment, while Cisco dominates the voice gateway segment with a market share exceeding 80 percent.

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Users can view featured apps and browse by categories like business, call recording, desktop and whiteboard sharing. They can also search by language, keyword cost, platform, app and developers’ names. Skype members don’t actually buy or download the apps through Skype but instead are directed to developer websites or app stores where they can get the software.

Clicking on an app gets a clean description, screenshots, ratings and reviews, and it gives users several ways to share apps on social networks and on email. It’s a nice way for consumers to get acquainted with third-party Skype apps, and it gives developers a way to get some visibility. It also shows that the versatility and power of Skype is in the hands of other developers.

It’s another sign that companies are seeing the value of building up ecosystems around their platforms. And giving developers a way to showcase their wares is a great way to engender support. Last year, Evernote, for example, launched Trunk, a showcase for apps that use its API, part of a larger effort to become a productivity platform. Expect more app directories and stores from companies building their own app ecosystems.

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The milestone comes as Qik introduces its premium mobile services on Android, bringing over a set of features that first appeared on the iPhone earlier this summer. With Qik Premium, which costs $4.99 a month, users will be able to get unlimited video storage, easy video management and sharing via a desktop application that syncs videos from a mobile device, as well as video mail. Android users will also get the ability to record and send HD and 3D video if their handsets support it.

Qik’s growth is being led by video chatting, which has tripled since the beginning of this year, and video recording, which has almost doubled in the same period. Bhaskar Roy, Qik co-founder and senior VP of product development, said the company has grown in part by embracing all kinds of video communications, not just video conferencing. He said some people like to share recorded videos, while others like to stream to the web. Some like to video chat in real time while others are happy to send video mail.

“We don’t box people into how they use our product and I think that’s one of the key things to our success is this flexibility of how you want to share moments through video,” Roy said.

Roy said Qik remains independent from Skype due to Qik’s deep relationships with carriers and manufacturers. But he said over time, Qik will marry its products and technology together with Skype. By that time, Qik will also be part of Microsoft, which is in the process of buying Skype for $8.5 billion.

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The device is a clear plastic dome hovering above and below a cafeteria table that helps focus conversations in what can be a very noisy room. There’s a video feed as well. What tripped me out was the focus spent on creating a casual environment that could be conducive to spontaneous conversation. The designers didn’t want a microphone because it would look more like a “witness stand” and the audio quality would still be poor, and claimed that for similar reasons, Skype wasn’t the answer for their needs. From the article:

[Kevin] Brown, president of Brown Innovations of Boston, came up with the idea of putting one dome above the table and another below, to capture and focus the voices and help filter out background noise.

The overhead dome has three speakers that bounce the sound off the dome and focus it toward the diners; below are three microphones positioned to collect sound from people’s mouths. The shapes of the domes create a whisper chamber-type effect, where sound is focused and directed to the listener’s ear. Brown initially rejected the idea of an overhead dome – “I realized the easiest way to do this seemed a little ridiculous,” he said – but he came back to it in the end as the best solution.

This reminds me of other efforts to connect people via broadband in more natural ways. There are the telecommuting robots that can roam physical offices while the remote employee controls the robot and “sees” what the robot sees, and offices that try to use Skype or other always-on connections to offer windows connecting two places. In fact, as companies try to boost collaboration while reducing travel expenses, there are common elements that emerge from the many efforts to create these windows or wormholes.

They are always on: A key element is the spontaneity of popping by one of these windows to see who might be there and engaging in conversation. Video conferences and even Skype video calls can lack that because one tends to check in before hopping on to take the video call. Thus, it’s not for casual conversation, but doing business or holding meetings.

They use high quality audio and video: Nothings worse than a stuttering video connection when you’re trying to tell a joke or show off a new haircut, dance move or whatever. In the same vein continually saying, “What?” kind of takes the fun out of any conversation.

They are in common areas or are voluntary: The MIT/Stanford wormhole is in a cafeteria. Some companies put Skype walls in their hallways. The key element is that these links between colleagues are in public places. I can’t think of anything more uncomfortable than having a desk right by one of these things, so my every move was being broadcast, but I’d love it if I could tune into a GigaOM HQ camera every now and then to see what’s up in San Francisco.

They rely on low-latency connections: This is tied to the audio and video quality issues, but is worth its own line. The broadband connection for the window has to be high quality enough that the video and audio travels at close to real-time speeds. It’s jarring to watch someone’s mouth move when the words don’t line up with what their lips are saying. This is why, for example, services such as Google Hangouts have a recommended minimum broadband speed for those using the service.

They are easy to use: Again, this one relates to the always-on element in some ways, but unlike the arduous corporate video conferences of the last decade, even if this window isn’t always on, it must be easy to turn on. You shouldn’t have to ask an IT person to set this up. It should be as easy as sitting down and flipping a switch, or selecting your office to look in on.

I’m sure there are other elements to consider (maybe wheels?), and some things may rank more highly for some offices or locales than others, but in general the trend to use broadband to bridge distance is one I’m excited about. As a remote worker, it links me with my team members while as a broadband enthusiast I like it as an application that will encourage faster and better broadband to develop. And frankly, until we figure out how to teleport, it’s the next best thing to being there.

For those who are keen to learn more about this sort of thing, watch my colleague Mike Wolf, interview a telecommuting robot here:

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GroupMe subsequently took off like wild-fire by quickly introducing a number of messaging features, which is what helped it get the attention of Skype, who just bought GroupMe for a reported $85 million. But while the deal obviously revolved around messaging and communications, a big motivator for Martocci and Hecht in accepting the sale, and presumably Skype in acquiring GroupMe, was also GroupMe’s shot at going back to its original potential as a tool for making monetized group decisions.

That’s something Skype CEO Tony Bates mentions right off the bat in his description of GroupMe in the official blog post announcing the deal, saying the messaging start-up “helps users stay in touch and make decisions.”

Hecht and Martocci told me this morning that they’re excited about accelerating the work behind helping people make online decisions for offline activities. This could mean things like friends heading out for a night on the town or going specifically to an event like Lollapalooza. As Martocci told me last week, there are a lot of opportunities in monetizing these highly contextual groups. That’s going to be a big push for GroupMe, and something that will get more attention in early 2012. It seems to tie into the growing market for delivering local discounts and offers to consumers via their mobile device, something Groupon, Google, Foursquare and many others are also looking at.

GroupMe founders Jared Hecht and Steve Martocci

“We want people to do things better in the real world. By taking simple everyday tools like a mobile device, we can show them an offer,” Hecht said. “We don’t think of this as an ad but as a feature. We have a unique opportunity to add content through context and people communicating in real time to help them make decisions without getting in the way.”

GroupMe’s founders are mum on details of how this will work. But the company has been moving in this direction, introducing featured groups that allow brands to organize conversations around their products and properties. The Oxygen network, for example, launched a group around Paris Hilton’s show. GroupMe has also worked with Lollapalooza and Showtime’s Dexter  on mobile apps that let people tap GroupMe for messaging. These groups and apps organize around specific themes and products and could be a way for advertisers to target consumers. And if GroupMe can also tie into the conversations people are having about upcoming events, it can help facilitate commerce by bringing in relevant offers.

That’s something GroupMe’s Steve Cheney, who joined the company in January to help lead business development, talked about in a blog post this morning. He said by combining with Skype, GroupMe can not only help disrupt communications but can also drive new use cases for commerce in the emerging peer-to-peer economy:

The peer to peer economy is driving unprecedented intelligence to the edge of the network, and messaging is just the first wedge in helping individuals and groups make decisions and take actions instantaneously. When I talked about Groupon closing the redemption loop a few months ago, I was adamant that a mobile commerce layer and a social / communication layer are being built out that will have unprecedented impacts on how we interact and consume things with friends in our physical environments. At our core, humans are social, and friends drive a lot of our decision-making and actions. Where traditional telecom allowed fairly static connections between people, the mobile internet is driving a new peer to peer economy where people not only instantaneously connect with each other, but take actions to consume, share and enrich their real-world lives.

So it’s not just a communications play for Skype and GroupMe; it’s Skype’s chance to get into the game on real-time local offers, but from a communications perspective. That’s a sensible approach, considering Skype’s core strengths, and represents a sizable opportunity if GroupMe can execute. And if it works, it won’t just work for GroupMe’s audience, but should ultimately help Skype’s 175 million users and potentially benefit Microsoft, which is in the process of buying Skype. 

There’s a lot that needs to happen yet, and I’m curious how intent in conversations can be turned into relevant offers that don’t appear too stalkerish. But it’s a good sign for Skype’s business that the company is thinking not just about communicating, but about how to derive money from those conversations.

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Interactions not communication

Why is Skype spending so much money on a relatively small company with a relatively small user base when compared to Skype? The answer can be found in some of my posts from earlier this year. When contemplating Google’s ongoing battle with Facebook, I wrote:

…instead of getting bogged down by the old-fashioned notion of communication – phone calls, emails, instant messages and text messages – it needs to think about interactions…..To me, interactions are synchronous, are highly personal, are location-aware and allow the sharing of experiences, whether it’s photographs, video streams or simply smiley faces. Interactions are supposed to mimic the feeling of actually being there. Interactions are about enmeshing the virtual with the physical.

In today’s hyper-connected world, in order to be relevant, a service provider or a device maker has to figure out how to constantly engage its end users and in doing so, keep their attention and thus ensure the ongoing need for their offerings. As ngmoco CEO Neil Young recently told me, the longer you have an opportunity to engage with the customer, the more opportunities you have for more monetization.

Skype so far has been reliant on its instant messaging and voice (and video) call offerings to engage its hundreds of millions of users. However, the mobile phone changes that behavior – shifting the focus to more instantaneous services such a GroupMe in addition to a combination of other communication mediums – SMS, mobile phone, Beluga, Twitter and Facebook Messages in addition to email.

Skype, which has been one of the earliest beneficiaries of the iPhone boom, has seen lightweight group messaging clients like GroupMe gaining in popularity, and it’s right to be worried. GroupMe, which uses Internet telephony start-up Twilio’s back-end, could have easily added voice chats to the system and someday, even video, thus becoming an instant competitor for Skype.

So why did GroupMe sell out?

And as good as their future looked on paper, I’m pretty sure increasing competition from Facebook must have spooked the guys at GroupMe, who only last week told Ryan Kim that they wanted to remain independent.

The fact remains that the sands of time were against GroupMe. The oncoming competition from Facebook Messenger, Google’s Huddle and most importantly Apple’s iMessage were going to fundamentally increase the pressure on GroupMe, which in turn decided that it was better to find comfort in the arms of a much larger company.

What Skype gets out of the deal

For starters, Skype can use GroupMe and other apps it’s buying up to build a communication platform for Microsoft’s Windows Phone 7 offering. That would make a lot of strategic sense. In addition, it would allow Skype/Microsoft to have a hedge against Facebook.

Even though Skype is a partner with Facebook for now, they need to be worried about the future, as Facebook will eventually compete with them. Just as Skype reduced voice to an application on the Internet, Facebook is slowly reducing voice calls to an afterthought in a multi-communication world.

When Facebook announced its video chat offering in partnership with Skype, I wrote:

Even if we buy into the argument that Facebook can get Skype a lot of new customers, I still think it is a highly risky strategy, and it runs the risk of the company losing a grip on its customers. Let’s remember that at one point even IBM thought Microsoft was only going to help them sell more computers and make more money.

Skype has a big subscriber base, but it can’t bet on holding on to them forever. At one time, AOL and Myspace were companies with hundreds of millions of subscribers and now they are a quickly vanishing shadow in muddy waters. In buying GroupMe, Skype for now gets a chance to build a new mobile experience and hopefully find engagement and attention.

Will that be enough for Skype?

From a long-term perspective, Skype as an entity is going to have an identity crisis. It cannot figure out whether it wants to be a friend to the consumers or whether it wants to be a corporation-focused collaboration company.

The muddled, confusing and terrible user experience of its desktop applications only highlights that dichotomy.  And that identity confusion is so aptly reflected in this blog post from company CEO Tony Bates.

This acquisition is another step towards our vision to provide a global multi-modal and multi-platform communications experience. It complements our existing leadership in voice and video communications by providing best in class mobile text-based communications and innovative features around group messaging that enable users to connect, share locations and photos and make plans with their closest ties. This latest acquisition, coupled with our acquisition of Qik earlier this year, augments our role as an innovator in driving unique mobile user experiences.

I think the big decision Bates & Co. need to make: decide who they really want to be!

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Skype announced on Sunday that it is acquiring GroupMe, just a year after the group-messaging startup officially launched to the public. While terms of the deal were not disclosed, AllThingsD reports that Skype will pay around $85 million for the company.

Skype has been focused on adding video calling to its mobile-messaging applications, but the GroupMe buy gives it more expertise in the text-based group-messaging field. GroupMe, which was born out of an all-day hackathon at TechCrunch Disrupt last year, launched in August 2010 and since then has risen to prominence based in part on the continual updates it’s made to the product. (Check out Ryan Kim’s big profile on GroupMe and founders Jared Hecht and Steve Martocci from last week.)

GroupMe largely won the group-messaging war against competitors like Fast Society, Kik and Beluga at this year’s SXSW, and most recently it released the latest version of its application earlier this month. That version includes questions, direct messages to other users and expanded support for mobile web browsers.

GroupMe has raised a total of about $11.5 million since being founded, including a $10.6 million funding round from Khosla Ventures, General Catalyst and First Round Capital at the beginning of this year. The acquisition comes while Skype awaits the close of its own $8.5 billion acquisition by Microsoft, which was announced just a few months ago. That deal is expected to be completed by the end of this year.

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In the age of blogs, it is the one with the ability to create instant amplification of the original news that is the chosen outlet. No surprise that you see news break on sites like  Politico more often. And why gadget news first shows up on Engadget.

Today, news jumps from blogs to television to traditional news outlets with the same regularity as it does in the opposite direction. This is part of the industry upheaval due to democratization of distribution. This subtle but harsh reality might have helped Google decide to go straight to its own blog with the Motorola news. It seems Larry Page decided not to play favorites with any media outlet and instead posted the news on the Google blog.

I give Page full kudos for doing this — I think this is the best business practice and all companies should follow it. I remember visiting Google’s offices and meeting with the communications team and making them understand that for a company that owns Blogger and YouTube, they needed to start using those tools and be the change they wanted to see. And nothing comes bigger!

On the flip side, Google also gets a lot of incoming links, which is important for the official news of the deal to show up when someone searches on Google for “Google Buys Motorola.” Ironically, right now if I conduct that search, Larry Page’s blog post is below a post on Mashable. The fact that the original comes after what is essentially a regurgitated blog post is symptomatic of the slow degradation of Google Search — which at times feels much like driving over the always-under-construction streets of San Francisco.

What’s the scoop?

But back to the idea of scoops and Salmon’s assertion. I think there is an element of truth to it. What is also important for us to remember is that the idea of a scoop today is much different from the idea of a scoop ten years ago. Today, the news — and scoops — are more a process than one big news release. The process means someone first breaks what is essentially a tiny component of the story, and pretty quickly the whole picture becomes clear, as other reporters and media outlets join in. Now you must be wondering – isn’t that how things are always done? Yes, but earlier there were fewer outlets and the metabolism of news was slower.

Today, this happens in almost real-time, thanks to the growing presence of online publications and a sharp increase in independent voices. I would say that the process of breaking news is becoming more democratic than ever before, but it is also a lot more difficult.

I for one, welcome the change. As a young reporter trying to make a go of it, I was always competing with large giants like the Wall Street Journal who were the preferred choice of news leakers. The same went for other big publications. On the other hand, I had to earn my scoops the old-fashioned way: by building contacts, establishing relationships and knowing my beat as best as humanly possible — and then working the beat 24-7. So when I did score a scoop — and I did land quite a few for Forbes.com — it was a delicious feeling.

Pre-announcing Sun’s launch of its Corona (net-PC) was one of those stories that drove the Sun PR machine into a tizzy. Or National Semiconductor’s decision to sell off Cyrix. There were a few others along the way as well, such as Yahoo buying Flickr and Six Apart buying Live Journal. More recently I have had a few including Microsoft-Skype and Microsoft’s involvement in the Google and Motorola deal.

But as the size of the blogosphere grows, chasing the scoop becomes much more harder. There are just too many good reporters out there, and they have ability to find and post the first hint of a scoop at a lightening speed. Getting the scoop is only going to get harder, and in the end, it will kill the traditional scoop.

The amplification effect, however, has its downsides. One mistake in reporting, and it reverberates around the web and onto the traditional non-Internet media outlets. And if the news involves publicly traded companies, it can have a major impact on the stock prices or even the direction of the economy. That’s the reality of media today.

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