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Skype's Sale As Media Feint
ansak writes "Bob Cringely's latest article shows evidence that some aspects of the 90s bubble are indeed back: Why would Rupert Murdoch think of paying $3billion for a mostly free online service like Skype? But his last line shows a keen understanding of Murdoch's skills and methods: 'By putting Skype in play, he distracts for no money at all most of the major media companies. And while they try to figure out how to respond to VoIP, old Rupert will be attacking them on some completely other front. He'll be stealing their shoes.'"
Bob Cringely's latest article shows evidence that some aspects of the 90s bubble are indeed back: Why would Rupert Murdoch think of paying $3billion for a mostly free online service like Skype?
This is the classic fake left and go right. It has been around as long as competition in business. Why is it that as soon as you throw in a 'net, eThis, iThat, or whatever other technology related slang, people immediately get stupind and forgetful? It's business plain and simple. Make your competitor concentrate on one part of the market and you have free reign in the rest. It's that simple.
Fuck I just got new sneakers...
I have never understood why Skype is considered good quality VoIP. Perhaps my experience is the only bad one? I tried Skype for an international chat whether the other machine was on a dial up connection (mine on DSL). Skype worked well only the first time and all that I got on later attempts was weird voice quality, long lags, etc. Nowadays, I have settled on Yahoo Messenger which does an amazing job of voice chat - beats the latest MSN Msgr hands down; rarely a lag, excellent quality, near instant call connect. I have uninstalled Skype a long time ago. Did anyone else have a chance to compare Skype with the IM voice chats?
$3b is a lot but Skype has a large and loyal user base. They could tie in a lot of things like: legal online music sales, expanding SkypeOut and SkypeIn and banner ads in the software. With Skype expanding out of the PC (like how Motorola is adding Skype to some of their phones) it has a lot of potential.
It's a little like someone looking at buying Apple. While they have good hardware and software they are so much more. Maybe that's what Murdoch sees for the future of Skype.
But is it worth $3b? I don't know.
"I hate to advocate drugs, alcohol, violence or insanity but they've always worked for me" - HST
By putting Skype in[to] play, he distracts[,] for no money at all[,] most of the major media companies.
It's just comma's. Not a bit deal.
Perhaps there is a connection.
You are being MICROattacked, from various angles, in a SOFT manner.
To call his son when he moves to Australia.
Why would Rupert Murdoch think of paying $3billion for a mostly free online service like Skype?
Reality Television.
-- Karma: Bad. Fucking stupid slashdot mods
I'd think he'd have bigger problems like... Trying to figure out who's going to run the company when he falls out.
HAHAHAHA! Evidence, oh, that's funny. I take Cringely articles as "evidence" of the exact contrary of what they claim.
Great Cingely post. Rupert has been "feinting" on Internet matters with his peers for over a decade. Notable is his speech to his peers a few weeks ago. See http://mp.blogs.com/mp/2005/04/ss_15.html His recent announcement of a Fox Internet unit also has these elements. More here: http://mp.blogs.com/mp/2005/07/on_news_corp_cr.htm l
I watched that Bubble blowhard, Kudlow, yelling into the camera yesterday about how Skype (not VoIP itself) "destroys the Baby Bells". Even though he mentioned that Skype is free only among Skype PCs, and they charge for connections to the PSTN - which can't scale. Murdoch's already got Kudlow fainting.
--
make install -not war
By putting Skype in play, he distracts for no money at all most of the major media companies. And while they try to figure out how to respond to VoIP, old Rupert will be attacking them on some completely other front.
Is Cringely saying that Murdoch would expand into VoIP to distract other media companies, who apparently won't be able to pay attention to more than one thing at a time? Of all the explanations Cringely gives for News Corp's contemplation of a Skype purchase, that is the least supported by any kind of logic. Media companies have tons of divisions. If merely creating a new one were enough to baffle your competitors into some non-competing stupor, then News Corp, which has expanded into TV and film, wouldn't face any competing newspapers (it does).
The rest of the article isn't so bad, but Cringely skips between explanations like a hyperactive frog. The simple fact is, Skype isn't worth $3 billion as a money-maker in its present form. It's valuable for two reasons: 1. It assails existing telephone companies, 2. It's a brand and a product with global reach, and hence a good way for a non-VoIP company to enter VoIP. Skype does 1. quite happily on its own. 2. is really the only motive for News Corp's prospective purchase.
Or in your case, apostrophes.
I think it's Engrish for "By using Skype, he to the major media companies for no money at all".
Please, for the good of Humanity, vote Obama.
I for one welcome our new shoe stealing overlords!
Of course, the rest of the VoIP industry loves this. If Skype is worth $3 billion, then so is Vonage and maybe Packet8. This purchase will validate the VoIP industry... I don't know about this... Skype is worth a lot because it has a good rep. It gained this rep because the software is free, ad-free and bug-free (well i havn't seen any yet) for Windows Mac and Linux. I use Skype often and so do the 10 odd friends and colleagues on my list, but i've never heard of Vonage or Packet8 and I very much doubt that any other of my Skype-using friends have either. Some of these people wouldn't even know what VoIP is, but they know what "Skype" is.
This is not offtopic, the story mentioned stealing shoes. Am I the only one concerned with the needs of the common man? Shoes are more than a luxury these days, they're often necessary for traversing rough terrain.
That's dash cunning of him!
GizmoProject uses SIP, which makes it a little bit more open.
I like Cringely's articles because they are always insightful, always look at things from a different angle, and almost always feature a prediction that I find very unlikely but compelling enough to make me look at the given topic in a different light (which is strikingly different from Dvorak articles, which are always inept, look at things from the same angle as everyone else but with cracked bifocals, and prove the adage that even a blind squirrel finds a nut from time to time).
That having been said, Skype is a very dangerous thing for the big telecom providers. As Cringely points out, the big phone companies can't buy it to kill it because something else would take its place. But he misses that this also holds for cable companies.
I use Skype Out regularly to call internationally, and I know that nobody calls to PSTN networks for less unless they own the switch on both ends.
Comcast et al want to sell VoIP on top of broadband, but Skype (or its successor) is free with broadband -- which brings up the whole bit about synergy and technical capabilities and whatnot.
Since the whole Skype backbone is P2P there really isn't a whole lot of infrastructure involved, other than the database for paying customers. There's no real physical infrastructure because the users are the network. As I understand it, Skype only has a few dozen employees (but I may have read that a while ago, before they had 20 million regular users).
The fact that there's basically no infrastructure means that it will be hard for a big incumbent operator to leverage its network size to take advantage of something like Skype. The whole Skype network costs its operators next to nothing to run right now, so how is MegaCableTeleCom, Inc (with all its buildings and employee unions, and executive bonuses, and specialized equipment, and miles and miles of plain-old-copper/coaxial/fiber lines, etc) going to keep it cheap enough to compete with free without losing?
Cringely's right -- Murdoch won't pay $3 billion, but somebody probably will. Only what's for sale is not the network but the customers. And those customers will flee in a minute if whoever runs Skype starts acting like a phone company -- cryptic bills, mystery charges, line-carrier fees, connection charges, etc. After all, something better and cheaper will come along any day now. For $3 billion, I'd sell.
I've been thinking about VOIP as a way of ditching my landline. Switch from
$80/mo for landline, local calls, and DSL/ISP
to
$20/mo for cable modem
$16/mo for most basic cable
$16/mo for Vonage VOIP
Total $52/mo, and I get more TV than I got before,
have a phone line in the house (I use my cell more anyway), and prepare myself for the next great thing....Netflix trickle download to TiVO in about 6 months.
Really, I've paid WAY too much for DSL for the last 5 years, in about a week I'm gonna tell the bells I don't need their landline. Its gonna be an interesting phone call to say the least.
But this comes back to the value of Skype...my Italian colleague here in the states talks to his Dad for free every morning at 5AM (our time). That is an unreal technology. Now, he wouldn't talk to his old man so much if it was not free, but it is, and his phone usage would be over $100/mo on landlines, free on Skype.
My other colleague (a Canadian/Israeli double citizen) uses Skype as her landline. Her laptop goes everywhere with her, and she is on broadband about 3/4 of the time, reachable on her Skype phone line.
The phone company landlines are challengeable by VOIP, for a tiny fraction of the cost since the user provides the "last mile" access over broadband. Its a great business model, and I expect Vonage and Skype to make a mint - those two Scandanavians that started Skype are gonna be even richer....
Rich folks is crazy.
Man just go outside and holla at a nizzle. Ain't need no voy-eep sheeeeeit.
Now that Rupert Murdoch owns it, what are users to expect ? Well, since Rupert is a member of the trilateral commission, council on foreign relations and travels to Bohemian Grove every summer (where he probably jacks off in a coffin, pleasing his owl master,) we should naturally expect Skype to be infiltrated with secret hooks/backdoors for the CIA/foreign intelligence services, or any close personal friends of this bastard.
Good thing it's not open source.
You can put something in play, just like you can set a plan in motion.
And as, for your obsession, with commas, I see you hail, from the James T. Kirk, school of oration.
Oh and it's just comma's what? But that's not a bit deal.
gah, the was removed from my post.
Please, for the good of Humanity, vote Obama.
I have a counter theory, which I explain at some length here. To sum it up, Comcast and the mobile phone companies won't want to buy Skype any more than the telecoms. It will be either Intel or Microsoft.
Why? Click the link.
Lack of eloquence does not denote lack of intelligence, though they often coincide.
This is the guy who just bought Myspace.com for $300 million. Is an outrageous price for Skype really out of the question?
Why would Rupert Murdoch think of paying $3billion for a mostly free online service like Skype?
I dunno, but a better question might be, why would
Well, that explains the full-page article in Australian NewsCorp-owned newpapers this morning touting VoIP as the way of the future for phone calls. And of course, the article mentioned Skype several times as if it were the only service of its type available!
Más sabe el diablo
por viejo que por diablo.
This means, "The devil knows more because he is old rather than because he is the devil."
1. Gizmo is NOT OPEN SOURCE. It runs on Linux, sure.* So does Skype. But how can you call it FOSS if it's closed-source? Just because it uses an open protocol? HTTP is open but you don't call MSIE 'FOSS'.
2. SIP does not 'annihilate' VoIP. SIP *is* a VoIP technology. If anything, SIP *furthers* VoIP. But not so much as Skype, which removes much of the frustration of firewall traversal.
3. Michael Robertson (MP3.com, Lindows, Gizmo) is the guy who thinks all Linux programs should be run as root. I would not touch any software that he has so much as looked at.
* Actually, it doesn't run on Linux yet. They promise a version will come Real Soon Now(tm).
~ Aero
Uncopyrightable: The longest word you can write without repeating a letter.
One of the main popular alternatives is Gizmo
http://www.gizmoproject.com/
This always works well and have never had any problems with it. The sound quality is absolutely superb.
Also works on Windows, Mac OS X, and about to be released Linux version too...
Well... fortunately, there is. Leaving aside gizmo there is a newborn app called jajah which supports an impressive number of protocols, among them IAX2 which was designed from scratch to work seamlessly behind NATs.
And it offers five minutes of free calls (yes, that is free calls to any phone, anywhere in the world) to any new registered user, and you don't even have to leave your card number! (hey jajah admins... BEWARE OF THE BOTS :) )
Although it's only available for Windows right now, I think it has a lot of potential to become a truly Skype killer
Anyway, it's always good to know that Skype has this kind of competition (jajah, gizmo, etc). That can only be good for all of us, voip users!
Please review this. He was trying to be funny (you judge for yourself if so). But offtopic????? That is somebody who is taking retribution.
I prefer the "u" in honour as it seems to be missing these days.
Before you talk to Rupert, why not quietly
license Skype's source code under -another-
name as OSS, so as to preclude loss of the
Skype tradition & to give the OSS communi-
ty the chance to finish the job or at least
extract the Skype protocols & create some
-interoperable- software.
Someone else hasn't realized that he'll make people pay for VOIP and push it through cable boxes everywhere he can.
In taiwan it's called the triple play. (Media, Internet, Telephone)
He really doesn't care about the "free." He cares that it's a proven system that works.
Michael
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
People are actually doing that in my city; that is to say, our local cable company recently started offering phone service along with 'net connection. It comes with free long distance anywhere in Canada. When it was first offered half a year ago it was quite buggy, strange interference issues, but it's now quite fine and one my my friends' family has switched entirely over to it, cut off their phone lines completely.
(if anyone's interested, the company in question is Shaw Cable....the reason behind their move ahead is mainly as a continued offensive against their main telecommunication competitor, Telus, which happens to have all of their workers on strike right now, so Shaw is poised to grab a huge chunk of the Albertan market over the next little while while Telus tries desperately just to stay afloat).
I remember sigs. Oh, a simpler time!
At $0.02 per minute, consumer long distance is all but irrelevant to the telecommunications market. It's an infinite supply commodity market that is basically devoid of profit -- this is bottom dweller territory. The telcos are abandoning the consumer market across the board -- and focusing their energy on business markets and advanced services. After all, all of the profit to be made in VoIP->PSTN is in local access charges, which the traditional wireline and wireless providers will be grabbing -- not Skype.
Furthermore, Skype isn't free -- it requires internet access, and the ISPs are charging you to pay their own internet bills -- checks payable to the telcos. The telcos don't care -- they'd rather manage a few billion dollars worth of ISP business anyway. It's a higher profit market.
Liberty you never use is liberty you lose.
if i really need a cheap internet calling card (essentially what skypeout is), i will hunt around for the best deal, keeping my skype id aside, there is no stickiness in calling phone numbers from a particular VoIP provider. Subscribers will switch to the best deal of the day. Skype will not be able to milk this unless they are the cheapest in the market. For that, they already have the volumes to negotiate. Their problem is a lack of customer relationship management. I seriously doubt thier ability to scale in that sense. Think India and Phillipines and process outsourcing.
Probably, they can charge the telcos that send their traffic to skype users. this is called the inter-connect fee. However, given the low reliability of skype and it's reliance on unsuspecting computers being turned into unwilling proxies, they call completion rates are going to be abysmal. as a result, the telcos might not agree to the standard inter-connect fees at all.
Earlier acquisitions like ICQ and Hotmail were relevant to microsoft and aol because they needed the userids. At the moment, there are far far many more MSN and AOL instant messenger ids than skype. (quick: how many contacts do you have on your AOL/MSN vs Skyp contacts? i have 200 on my msn and 5 on my skype).
Skype will need to become a regular telco to go anywhere. They will need to hire people and build a great world class customer support and e-commerce experience. I would suggest they hire Jakob Neilson and Patricia Seybold and get working instead of looking for a kerb side deal with the shady murdochs.
The purpose of all philosophers was to impress women
And as, for your obsession, with commas, I see you hail, from the James T. Kirk, school of oration.
Horse shit. Those commas were absolutely required. If you can't see the difference between the proper use of commas and your idiotic example, you have no business giving grammatical advice to anyone.
When nine hundred years old you reach, speak this well you will not, hmm?
"these services require charging, billing and customer support. certainly not something that can be done by clever marketing and adding a codec to kazaa."
Its perfectly OK to issue invoices electronically now (e.g. via a website now) so how they do now is fine and scales well. Google bills huge numbers of businesses for its adsense and that works well given the small number of employess dedicated to it.
Telcos pay a lot for customer support because they sell physical services which break down (telephone lines, telephones etc.) So Skype doesn't have their problems and so doesn't need to recreate Telco's customer support service.
"if i really need a cheap internet calling card (essentially what skypeout is), i will hunt around for the best deal, keeping my skype id aside, there is no stickiness in calling phone numbers from a particular VoIP provider."
Its not just Skype ID though is it. Its the protocol, we run Skype primarily for Skype to Skype communications. But we're looking at buying a skype compatible handset (I guess money goes from those back into Skype?). Cringely suggested advertising on the client etc. so there are lots of ways of making money from Skype. Its not equivalent to a cheap internet call card.
Assuming it does end up owning the VOIP market (a risk) then it potentially will end up with 300-500 million users, getting $10/year out of those seems pretty easy to do.
Jeff Pulvers Free World Dialup came before skype, does what skype does AND will forward your calls to your asterisk server using the IAX protocol.
For that reason I will be using FWD and cannmot use skype. FWD is not open as much as I would like, but I least I don't have to use their client software to take a call.
I don't know if IAX will let you originate an FWD terminating call.
Sam
blog.sam.liddicott.com
"...he distracts for no money at all most of the major media companies." Um, isn't anybody counting that 3 BILLION DOLLARS he pays for Skype?
There are some simple corporate tests as to whether a company is "worth it".
The simplest is replacement cost, given three billion USD (plus any revenues of course) could you create a new Skype?
Hard to assess the value of the userbase, and the telephone Interconnects, and goodwill, but given the immaturity of the market, and the speed with which Skype emerged, my gut feeling is yes I could replace it for less than 3Bn USD.
But then maybe there are aspects of the deal not immediately obvious, and simply because I think the price discussed is slightly inflated price doesn't mean the buyer can't make a profit. Let us call it "investment bank surplus".
I wouldn't put a cent into the pocket of this man. I wouldn't trust any software he had a hand in producing.
Thanks for the heads up.
it's the international and cross platform aspects of skypes service which sell it to me.
calls i couldn't afford are affordable.
but
skype out is a bit random with its success rates like throw a 6 to talk for anything from a minute upwards and expect for the connection to break at any time and need to redial.
skype in buys you a national number for your friends to call. (send me a text I will call you back and use the free minutes i get on my mobile phone contract).
my mobile is a pda phone (blue angel, mda III, xda IIS, ect) with wireless built
in its great for skype out within the confines of the limits of my wireless router (or someone elses)
skype out fills in the gaps in my mobile phone contract but for mobile calls its still a significant cost £12 an hour compared to £1.20 an hour for a call to a land line (usa excepted both $1.20 an hour).
skype calls are fragile often you have a call broken by a skype failure headphones are essential on the skype using end or your friends will get echoed at for the price i do like skype for anymore i wouldnt.
For rupert murdoch to buy skype that would stop me using it. OK he figured we got our tv too cheaply and worked out people would pay £30 a month and accept advertising too. If the model stays as it is for skype its useable just start shoving additional fee's and adverts at me no thanks.
so saying give me an alternative system mac windows linux and pda compatable that lets me call anywhere at skype like rates you could get me as a customer open source would be even better (and getting through nat is essential).
Blarney Quality Restaurant, Plants
Dear Skype DONT BOTHER porting your software for Linux,
if you CANT BE BOTHERED in making it work properly.
I can't wait when this comes out for Linux.
Unlike many multi-OS applications:
Skype has been nothing but utter pain.
Cringely writes:
"Skype threatens only incumbent FIXED phone service, not mobile service. Skype causes headaches for Verizon, but not for Verizon Wireless"
Wrong. Big cities start talking about Wifi wireless coverage across the entire city. Why would you spend your precious cellphone minutes in a Wifi enabled city, if your friends have Skype too?
Why a politically motivated person like Murdoch would want Skype has nothing to do with it's ability to turn a profit. It is one and the same reason Google created gmail, AOL, Yahoo and MS their email and IM services, in a word: data-mining (ok, two words).
When you sign-up for any of these servers you'll note there is no guarantee that anything you type or say will be kept private or secret. On the contrary everything must be sent through the provider's servers where they can parse it at will. From stock tips to source code, these services are a gold mine for the providers.
r7
Cringley gets all the readers all excited and focussed on conspiracy theories. In the meantime, he is cleverly crafting another slashdottable article that will have no other purpose than build his personal brand as tech's version of John Edwards. BTW, is anyone keeping track of his revelations?
Charles Jo
But... but... I'm a Slashdot troll!
Hey, like everything else this idiotic old prune and his reptilian-dosed nano-eating-offspring manipulate, this current ridiculousity is but another apsect of the murdoch philosophy, clarified crystal by interpreting correctly the old saying HE HAS ONE HAND OUT AND ONE LEG UP. This whole farce and fiasco is just a SKYPE HUNT, which of course is easily confused with the legendary SNIPE HUNT, and thats ok because the two are very much alike, virtually interchangeable, no major differences. I think you should disregard anything this currency monger and embarassment to America rupert murdoch, or his type of people do, because it is not good for you http://www.chapelhill.indymedia.org/news/2005/07/1 5830.php
or your kids....Bill Gallagher
Light Happens.
So there is that weird silence when nobody is talking. I better like hearing the backround noise because it makes you feel more "emersed".
Yup, I know what you mean ... that sudden 'silence' makes me feel like the call has been disconnected, so I instinctively 'hello?'. Of course it's done to save BW though ... why transmit when nobody is talking. I was thinking though, why not just introduce a little generated noise on the client side?