Umair Haque / Bubblegeneration

Wednesday, August 24, 2005

Google vs Skype

OK. Om has a nice summary, if you wanna read more. Leaving aside tech issues of XMPP vs VoIP, let's begin with the proposition that GTalk is, in fact, a substitute for Skype (etc). How many people are gonna run both? Not many.

There are a few interesting points to consider here. First, I wanted to post last week that the Google buys Skype rumours were probably off the mark. It wouldn't make a lot of sense for Google to pay Skype's current valuation - it's much cheaper to roll their own, and then leverage scope economies (viz Gmail, etc) to cheaply drive adoption.

IMHO, the players that will (might) pay such a huge valuation for Skype are those that don't already have strong competences in this area (read: FIM). But I think this puts Skype in a bit of a tough spot - IPOs in this space aren't exactly roaring, and strategic buyers with such deep pockets are few and far between.

Point two. Techies that are telling the rest of us that this is a nonevent because it's built on Jabber are missing what's going on here - which is that Skype, I think, has shown a lot of incumbents across spaces that there is huge value creation potential in driving mass-market adoption of voice chat (let alone full blown VoIP). A lot of those incumbents are also discovering that entry barriers in this space aren't exactly huge (and Skype hasn't focused on building many), and so this market is going to get (even more) crowded pretty fast.

A bit of a heretical POV, but maybe Skype is kind of missing it's window? Just a thought.

-- umair // 3:38 PM // 1 comments

Comments:

I've been posting my thoughts on this situation over at my blog:

http://www.yesterdaywasdramatic.com

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a simple caveman // 5:10 AM