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Rumor Mill: Google Buying Skype
November 20, 2007
I have to be honest with you my loyal and devoted readers. I am disgusted with myself. Why you ask? Because I am an addict – I am addicted to writing about Google. I just can’t seem to help it. They are in the news and in every hot sector. Even when they aren’t making news in a sector they are implicated in rumors which I must explore in order to do my job effectively.
I haven’t wanted to touch the latest rumor because I just wrote about the Google/Sprint acquisition rumors and in doing so got tremendous heat from many in the blogosphere because the rumor did not have solid facts behind it. Others said regardless of my sources this deal could never happen.
Perhaps starting the headline of said post with the words ‘Rumor Mill” doesn’t get the point across. Next time I may have to try something stronger.
In the mean time the latest Google rumor mill acquisition target is Skype.
This makes sense for eBay because I am pretty sure they have no idea what to do with Skype. As a standalone company Skype has done a good job these past years but they make little money and missed revenue goals.
In a recent article I asked out loud (well in print anyway) why Skype doesn’t run ads on the service. This is a no brainer if you are looking for revenue.
Here is an excerpt from the article:
Show some ads: Let’s see if I understand the situation. You have over 5 million users on your service almost every moment of every day. You need to increase revenue. Your answer? Show no ads. If I were eBay I would be flashing product listings in front of Skype users as often as possible. If this doesn’t make sense, why not show Google ads like everyone else in the world? It is tough to see where this isn’t a $100 million/year revenue opportunity – this amount may seem high but think about how long people use Skype each day and consider you can flash new ads in front of users constantly. Moreover, probably $90 million would flow to the bottom line. eBay’s P/E ratio is currently about 40 so this amount of earnings could translate into about $3.6 billion in market capitalization. Not showing ads is something I can’t conceivably understand.
You don’t think there are 100 propeller heads (said respectfully – I am a fellow propeller head) in the Googleplex working on speech recognition right this moment so if they acquire Skype they can immediately run contextual ads based on what you are talking about?
Wait till the privacy zealots get a hold of this news. It’ll be front page news in The New York Times for sure.
But I digress. Google needs voice and voice for that matter needs Google.
Even AT&T has learned how to be nimble and quick and as of today owns a pay-per-call company. Google too must look for new avenues of revenue growth and millions of Skype users make fertile ground for new VoIP-based contextual ads.
What are the odds of such a merger happening? I would say from Google’s standpoint there is a 100% chance that Skype is something the company wants. The question is will eBay part with the world’s largest software-based telephone company? My feeling is if they haven’t figured out how to integrate or monetize Skype yet they may never figure it out. Moreover, selling to Google makes sense for all involved and also allows the talented Skype team the ability to really monetize their platform in a meaningful way.
eBay for its part might even get some concessions from Google in the deal, ensuring that Google doesn’t compete in any significant way with PayPal.
Although no one at Skype has told me a sale is imminent, my spider senses are indeed tingling and I do get the feeling some change is afoot. Time will tell of course and if you are ready to blast me (I mean send me a respectful letter of course :) ) for starting unsubstantiated rumors I would like to point you to at least one other site which had this rumor posted before me.
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Google TV
November 20, 2007
If you think Android and the Open Handset Alliance are interesting, check out this article form TechCrunch about how Google may soon be in the set top box market and by doing so will be have the ultimate platform to integrate television and advertising.
Here is an excerpt of this very well-written article:
Before Google announced Android, many people thought Google was developing its own mobile phone. But the point of Android is to get other companies to build the phones and a new set of applications for them. Google wants to supply the underlying technology to make it happen, and finally bring the mobile world into the Web age. It should be obvious by now that Google is much happier when it is creating technology platforms—for mobile apps, for social apps, for advertising— than one-off consumer products. Why should it be any different when it comes to television? (And remember, Andy Rubin and others on Google’s Android team used to work at WebTV and TV software startup Moxi Digital, although Android is not officially part of Dureau’s group).
In any case, Google would not be the first to try this. Some of the hypothetical applications I describe above are already being developed for Microsoft’s IPTV set-top boxes, which runs Microsoft Mediaroom. Anyone can write an application for Mediaroom on the PC and easily make it work on an IPTV set-top box (or an Xbox or an HD-DVD drive, both of which come with Ethernet jacks). There are only about 50 or so third-party apps for Mediaroom right now, however, because making TV apps easier to build is not enough. Getting cable or satellite TV providers to put those apps on their set-top boxes is the bigger battle.
“Service providers are open to good rich apps on their network if they do emerge,” says Microsoft’s Barrett. Not surprisingly he does not think that an open-source, Android approach is the way to go. “Trying to make a level playing field,” he says, “really is not in the service provider’s interest. It is in Google’s. But if you just throw the doors open, the TV or the phone becomes unusable pretty quickly.” The same argument is why Apple is cautious about allowing third-party apps on the iPhone. You don’t want some random app crashing your cell phone or your TV. But that just means device makers or carriers need to certify that the apps are safe. The still-closed mobile world is moving in this direction despite these issues.
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COTS to the Service Provider Rescue
November 20, 2007
There was a time when service providers had to purchase massively expensive proprietary equipment in order to deploy telephone service. Class 4 and 5 switches required enormous investment and could be justified as this equipment would be depreciated over many years in a well-known and slow-moving competitive environment.
Then along came VoIP and the market shifted into high gear. All of a sudden customers wanted more services and they wanted to spend less money for it all. Competition seemed to come from every direction with crazy “woohoo” ads from companies like Vonage and more sober ads from the cable companies.
Even worse, the wireless companies began to take share making it that much more difficult to pay for the massive iron sitting in central offices worldwide.
Just before VoIP became popular, new architectures such as CompactPCI and later Advanced TCA emerged allowing service providers to benefit from technologies being popularized in the enterprise and consumer markets.
As voice becomes a cheaper and cheaper commodity, service providers must look for other services to replace lost revenue. TV and time-shifting technology are a few ways of accomplishing these goals and of course all the elements of the triple, quadruple and quintuple-play can be added into the mix.
I sympathize with carriers because there are virtually infinite ways to generate revenue. The question service providers need to answer is what infrastructure is needed to handle these services? For example, AT&T is now streaming Pandora radio and is using this service to compete with satellite radio.
The way to deal with the challenges faced by today’s service provider is to ensure you have the infrastructure in place to handle virtually anything. Who knows what tomorrow’s services will be. Will service providers provide IPTV with embedded smell-over-IP allowing viewers to really immerse themselves in the viewing experience?
One way to be prepared for anything and everything is to ensure you have cost-effective yet reliable infrastructure which allows your organization to expand rapidly while maintaining flexibility to provide tomorrow’s anything over IP services.
To learn more be sure to check out the upcoming TMCnet webinar titled Building Carrier Networks Using COTS Technology which takes place December 5, 2007 at 2:00 PM EST/ 11:00 AM PT.
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Voice Peering Forum Winter 2007
November 20, 2007
If you are going to go to one voice peering conference in 2007 it needs to be VPF or Voice Peering Forum Winter 2007, New York City at the Ritz Carlton Hotel. Here are some of the speakers you can hear at this conference:
- Dr. Judy Reed Smith, Founder & CEO, ATLANTIC-ACM
- Jon Romm, COO, Avail Media
- Mark Ericson, Director of Product Strategy, BlueNote Networks
- Kevin P. Fleming, Sr Software Engineer and Co-Maintainer of Asterisk, Digium
- Thanh Nguyen, Director for Business Development, France Telecom
- Joseph Gillan, Economist, Gillan Associates
- Christopher Lengyel, Director, Product Management, iBasis
- Eric Hanselman, Network Protection Architect, IBM Internet Security Systems
- Gary Kim, Editor-in-Chief, IP Business
- Bill Binning, Vice President, Marketing, Jaduka
- Joe Trainor, Vice President, Narrowstep
- Georges Smine, Senior Director, Product Marketing, Nominum
- Bernardin Arnason, Managing Partner, Pivot Media
- Sanford McMurtry, VP - Strategic Operations, RNK Telecom
- Shrihari Pandit, President & CEO, Stealth Communications
- Bob Bradley, Product Line Manager, Sonus Networks
- Pankaj Shroff, Chief Applications Architect, Sonus Networks
- Stephan Beckert, Director of Research, TeleGeography
- Rich Tehrani, President & Editor-in-Chief, TMCnet
- Patrick Murphy, COO, The Thomas Howe Company
- Hunter Newby, Chief Strategy Officer, The telx Group
- Bhupender Kaul, Vice President, Business Services, Time Warner Cable
- Jim Dalton, Founder & CEO, TransNexus
- Rodrigue Ullens, Co-founder & CEO, Voxbone
- Tom Schlatter, Director of Data Architecture, XO Communications
Oh yes, and I will be speaking as well. I hope to see you at the show…
This is the preeminent voice peering conference in the world and Shrihari Pandit the conference chairman has done an incredible job educating the peering market year after year and if you aren’t aware has held a peering conference at ITEXPO for many years. You will definitely want to be in Miami in January 2008 as well to stay on top of this fast-moving industry
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Ma Bell Strikes Back
November 20, 2007
Recently I wrote an article titled Ma Google which discussed how Google needs to do anything – everything it can to have a direct pipe to customers so they can bypass service providers who could block their access.
Now it is AT&T which is gearing up to take on Google head on. How you ask? By acquiring Ingenio the pay-per-call advertising company. Initially AT&T will integrate the service into its directory assistance products but it is easy to see how the company could try to build a huge advertising network similar to what Google has done with Adwords.
Just think about how many businesses AT&T already has as customers. Over time this network could be evolved into pay-per-click as well.
Currently Ingenio has a number of advertiser partners such as AOL and infospace. It is not tough to imagine the company adding Yahoo! and MSN to this network over time.
Now it’s Google’s turn… I wonder what they will hit the service providers with next. What do you think?
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Avaya DevConnect
November 20, 2007
Over the years, TMC has worked closely with Avaya to host their DevConnect Developer Conference at TMC events such as Communications/VoIP Developer. I have always found these events to be extremely valuable as Avaya does a great job getting the world’s best and most knowledgeable speakers to be part of this show.
In a way I feel a special closeness to this conference because back in 2000 when Avaya hadn’t spun out of Lucent and their first ever IP-PBX was called the IP Exchange System – I was invited to be the first keynote speaker in Las Vegas. This event was being held concurrently with a TMC event as well.
So if you are interested in learning more about Avaya’s Developer Connection program or communications development in general, I recommend this conference.The DevConnect Developer Conference is happening November 28, 2007 at Avaya Labs in Lincroft, New Jersey and is free for attendees who will benefit from great networking opportunities with Avaya professionals as well as the ability to connect with Avaya engineers and business development managers. Also, attendees will be offered hands-on demonstrations within the Avaya DevConnect Labs.
As an added bonus, attendees of the conference will also qualify to win an Apple iPod Touch. What more do you need to know? Register here.
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Kindle: Nobody Wants This Thing
November 20, 2007
OK, I have heard about Kindle and other e-book readers and in my opinion, no one wants one of these things. I could be more eloquent and wax poetic about how this device is not the same as a book and people will not warm up to it, etc but i won’t.
So in short, I am a huge fan of Amazon and this is a great idea for them to try but I think no one wants one. If they sell more than 100,000 of these things I think the earth will stop spinning.
I would love to be proven wrong but I am pretty sure I won’t be. Sorry Amazon. I hope this doesn’t cause my product shipments to slow down around the holidays. ;)
See also: Introducing Amazon Kindle
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Packet8 MobileTalk
November 20, 2007
Having seen invention after invention and new technology after new technology come along I can say I have begun to appreciate some of the more simple things in life. Don’t get me wrong, I like complex technologies such as the iPhone allowing one to surf the web in a fashion which comes close to a laptop browsing experience.But I realize that some technologies are too complicated for mass adoption and as such I appreciate simple solutions like Skype which anyone can use.
Having said this, when I found out Packet8 has developed a new solution named MobileTalk which allows long distance VoIP calls to be made by mobile phones I could not help but be excited. Why? Well because I am very much aware of how difficult it is to call international numbers with a calling card.
I spend a good deal of time in the car and it is a nightmare to dial long international numbers including calling card while driving. I subsequently don’t make as many international calls as I normally would because of the pain associated with dialing.
And yes, of course I know I can program the long sequences into my phone and yes, I know how to program. I just choose not to.
So I am very happy to hear Packet8 has developed a solution which downloads an application to smartphones and automatically connects the call via their network. They save you money and save you from having to dial a calling card number followed by a long international number. In the end; these are the exact things many of us need in a mobile long-distance solution.
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TMC Thanksgiving Pot Luck Luncheon
November 20, 2007
Today is Pot Luck Luncheon day here at TMC which basically means each person in the company brings in enough food to feed five-ten people. If you play this out, we will about five times more food than we can eat. I hear we have about seven pies, mashed potatoes turkey, carbohydrates of all varieties, muffins and of course I topped it all off by bringing the soda.OK so I had an easy task but I did agonize over which sodas to buy early this morning. I did go off the beaten path and even pick up some Diet Mountain Dew as I am convinced at least one of my coworkers has this substance flowing through their veins and arteries. ;)
The lunch starts at 1:00 PM EST so if we aren’t picking up phones, etc, this is why. I have already had a few requests from a few of my coworkers about where the post-luncheon nap will take place. :)
I hope you all have a Happy Thanksgiving and for those of you who do not celebrate this holiday I hope you and your loved ones have a wonderful week.
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Mobility as Strategic Advantage
November 20, 2007
It is obvious that mobile device proliferation has had a dramatic increase in productivity for knowledge workers worldwide. In addition it is well known the US government and military functions more effectively because it relies on Blackberrys.
It goes without saying that the individual mobility needs of a users varies widely as some mobile workers need optimal web access while others primarily need e-mail access and others may need specific applications.
It is also well known that every mobile device today from Blackberry to iPhone consists of numerous design tradeoffs weighing size, keyboard, connection speed, processor speed and more.
The next point worth considering is consumer choice. For example, if using the best device makes users most productive, then having the greatest access to devices means the best potential fit of personal needs and device which in turn means the most potential productivity. After all, if a user needs access to the best browser, they need a device with sufficient resolution to allow for this.
As different users have different device preferences and needs, it seems obvious that having one dozen devices to choose from is better –from a productivity standpoint – than having four.
If we can agree that having the greatest access to mobile devices can make users most productive then we must further acknowledge that if a country such as the United States has access to the greatest variety of mobile devices it will in turn have a competitive advantage in the world market.
Unfortunately the opposite is true and I was reminded of just how far behind the US is when it comes to mobile phone choice as I read this MSNBC/Forbes article titled Coolest cell phones you can't get in the U.S.
While this article is focused more on consumer-friendly phones, the situation in the business phone market is similar and U.S. service providers have done a great job ensuring there is not much consumer choice in device selection.
I am not an advocate of needless government regulation but it is apparent to me that consumers, businesses and the country would be better off if any device worked on any network. It seems like common sense but service providers exert tremendous control on device manufacturers and as such Americans suffer because they have less choice.This is exactly why the Carterfone rule needs to be applied to wireless networks. This is the rule which allowed consumers to utilize phones other than those from AT&T on AT&T’s network. A wave of telephone competition and plummeting prices was a result of this ruling in the PSTN world.
It seems apparent that this same rule should be applied to cellular networks as well to not only lower prices and give more consumer choice but perhaps most importantly to ensure the U.S. can catch up to the rest of developed countries when it comes to mobile productivity.
For more on Carterfone and Open Access be sure to see the TMCnet article titled FCC Outlines Plans for Public Safety Network, Open Wireless Access.
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Don’t Vote Until You read This
November 20, 2007
I am unhappy to hear that 24 House Republicans are delving into the FCC’s plan to regulate the cable companies more closely. FCC Chairman Martin is acting in the best interest of consumers by fostering competition in the cable industry and in doing so will likely lower consumer costs and allow more competition in the market.While it is true that increased video competition is coming from phone companies and consumers can stream video over the internet, any support the FCC can give to increase the pace of video competition is good for all cable customers.
While House Republicans are in the information gathering phase at the moment, comments from Rep. Marsha Blackburn of Tennessee, regarding her concern about the FCC moving away from light-touch regulation seems to show more concern for cable company shareholders than the citizens of the United States.
Recently I mentioned it would make more sense for the FCC to mandate network neutrality rather than get into the nitty gritty of regulating individual cable channels. I still think in the long run this direction makes the most sense.
However I must commend Chairman Martin for taking on cable companies and much of the government in an effort to increase the rate of competition in the cable business and subsequently help consumers.
I recommend voters keep an eye on the politicians and the party they represent in this dialogue and use this information when making voting decisions in the future.
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