For Skype, Tense Moments, New Deals


With the big three – Yahoo, Microsoft and Google – making their respective moves into the Voice-over-IM space, it is very likely that folks over at Skype are feeling the heat. Recent moves indicate, that company is slowly coming to terms with the harsh reality that easy growth in the west is over. So perhaps it is looking east.

There is news that Skype will be bundled with all Sony Vaio PCs sold in Japan, a good move given the strong presence of Sony in one of the most broadband-enabled countries. Then there is an increasing coziness between Hutchinson Whampoa of Hong Kong and Skype. Dow Jones reports that HW might buy 5% stake in the company. (There goes the IPO theory!) There is some boneheaded comment about Skype being valued at several billion euros. Oh well… Andy says he won’t be surprised by a handset joining the investor ranks as well. The company today announced a JV with TOM Online (also owned by the same guy who owns HW) which is majority owned by TOM, and will push the software/service to its wireless mobile customers.

But that’s just in recent days. I have received emails from Skype PR telling me that there are 400 partners who have developed Skype related hardware and software, and more will follow. They made the announcement on SkypeWeb and Skype Net. The company has been secretly reaching out to developers trying to use Skype API and Skype Platform. They realize that with the big three’s marketing muscle, their IM/Presence platform is under threat. The Gizmo Project guru Michael Robertson, is not impressed and says that Skype API is not really an API.

> Skypeweb and skypenet are just a smoke screen to convey that Skype is opening up, but they are really not. If you have to download a program (THEIR program) to talk to it that’s NOT an API. An API lets you talk to the service/format using a completely different program. Skype wants to SAY that they are open and that they have an API when they really don’t. They wrap their declaration in a friendly puffed up “we want to give back to the net”. And it’s not coincidence this came 2 days AFTER Google says they actually will use open standards and connect directories to others.


mark vanschoonbeek

I use Skype daily and it works good enough for me, not to say great. And I was a bit surprised on comments from people arguing that Skype does not make use of a standard. Well I think those people better should take a look around at the REAL world and watch how many other standards are set. In my opinion the better standards are the “de facto’sâ€?, those that are formed on the edge of the advancement of technology. Why? Well simply because standard bodies work very slow, mostly to slow leaving the market open for a (much better!) proprietary solution. In many cases proprietary technology, when used on a large scale, simply IS the best base to built a real good standard on. Consuming people just want to make use of a good service/product for an affordable price and they don’t care if it’s a standard or not.
It’s the market that sets the standard and NEVER the other way around unless that standard is AND in time AND a good one AND for an affordable price because…. That simply is how the market works!
To say it in other words: when 85% of all VOIP users are using Skype, then SKYPE is the standard, not SIP, because SKYPE better matched that emerging VoIP demand: IN TIME, STATE OF THE ART, AFFORDABLE …



To PXLated:

Hello! the open standard that matters most is the PSTN, which Skype connects to handily. That beats every other standard there is in the geek world. I use Skype daily. Living in Spain it is convenient for calling American and European PSTN phones for less than 2 cents a minute. I tried using Messenger’s voice function today with several people. The quality does not compare to Skype, yet Skype is far from perfect. Real people aren’t interested in standards, they just want it to work… and for the time being, Skype is far and away the best.

Mike Rundle

If only Skype didn’t crash on my G5. It always seems to do it right when the important part of the conversation is going on…


Michael Robertson wrote: “If you have to download a program (THEIR program) to talk to it that’s NOT an API.”

Skype is a pure P2P solution, with almost no central server, so it’s normal that the API talks with the clients. And that the client is on your same machine is just a technical requirements, it’s not possible to have any software talk with the supernodes.

And about Skype not being open: How should a completely decentralized network run and survive if any hacker could write a client with the purpose of taking the network down?

Juan Lopez-Valcarcel

Skype really needs any growth story at this stage if they want to be acquired for more than $3Bn or aim for an IPO anytime soon.

Interestingly, Skype has just a partnership with a 3G mobile phone operator in Germany to offer their services to mobile users… surprising co-opetition indeed.

PD: Om, thanks for all your good work. Your deep analysis and fact gathering is proof of great journalism and is a pleasure to read your posts every day.
Carl, there will always be rumours flying around the Net, as that the spice that makes Web 2.0 such a great adventure. Chill out and enjoy the ride.


Here’s my most recent thoughts on Skype after the ISP fallout has settled. Skype is probably at least a year ahead in telephony over the ISP’s. They have an established network over PSTN, features, bug-fixes, operating systems, devices, and wireless on the way. That said, I believe if they develop key partnerships with mobile phone service providers and mobile phone handset makers, then they are in a very nice position.


Om is on it. I like his rythym and style. He’s on the back end of rumors and on the front-end in fact and solid opinion. All this Skype news has been in the press for awhile. Om isn’t breaking it. In fact, he’s just sweeping up the crumbs very nicely.

Thanks Om.

BTW, Skype has already denied the Hutchison 5% deal, so your IPO thought is still an option.

Om Malik


what is that you are trying to say? not sure…if you have a point/question – go ahead and post it. otherwise read what i wrote, and its just a summation of what has been happening.


You know what Om? You are in part very responsible for increasing the noise-to-signal ratio about Skype and its getting old. I thought you are a reporter. A journalist. This is not reporting, this is speculation. Is your new job at Business 2.0 that of odds maker? Do you have a secret connection to the bookees in Vegas?

One day its Murdoch buying Skype for a billion bucks, then the next day Google might buy them out. Oh wait, maybe its Yahoo. And then a week later Vonage might do an IPO and this will surely increase Skype’s valutation. Oh but wait a minute, Skype says their not for sale. And now they are in deep doo doo because the wild west ways are gone. Or are they? Sheesh.

Aswath Rao

Gizmo Project and others are using SIP for signalling protocol. But we have to worry about codec as well, lest we get stuck with a single licensed codec from a single company.

Om Malik

it is clearly the early mover advantage that is working for them, and the other thing is that they have been the only game in town so far. that has a role to play in this as well. i think as gizmo project and others like it become stronger, some of those skype advantages are going to go away. just my two cents


I just don’t get the Skype hype and why anyone would want it…I thought open standards was the holy grail but it seems the mainstream bloggers all promote Skype. Is it because of their podCast VoIP experience? Seems they should be dumping Skype in droves and getting on the open, interoperability bandwagon. Where are the Gillmors, Winers, Searles?

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