The New Old Phone Business

Just about everybody I know who has heard about the sale of Skype to Microsoft has groaned about it. Myself included.

No doubt it makes sense for the entities involved. eBay, various investors and the founders all make money on the deal. Microsoft/Nokia now gets to be Microsoft/Nokia/Skype. Those not involved, including Google, Apple, and all carriers other than those partnering with SkypeNoSoft get nothing.

What the world will get is a set of services that work best only on Nokia’s Windows Mobile devices. Also count on fees for new and old Skype services, with complicated and confusing plans from the carriers.

Add involvements by the ITU (a Microsoft site, Silverlight and all)¬†and governments that like tariffs on calls and data services, and we’ll see the Internet further subordinated to the same telecom business we’ve had since telegraphy. Same meatloaf, new gravy.

Also count on appealing alternatives coming out of Apple and Google, sooner rather than later.

As for Facebook, I have no idea. They’re well-placed to become some kind of player in the telecom business, whatever it becomes, but I don’t see them doing much more than continuing to be AOL 2.x.

I’d say more, but I have a book to finish. If you’re wondering why blogging has been slow lately, that’s why.

[Later...] I love Don Marti’s take:

Really, this is good news. While users are trying to figure out whether to download “Skype Live Small Business Edition” or “Skype For Windows Professional Platinum 7.0″, some startup will eat their lunch.

6 comments

  1. PXLated’s avatar

    Andy Ihnatko seems to have the best take I’ve seen so far on the Microsoft/Skype deal – http://bit.ly/k1RmNZ

  2. Martin Roell’s avatar

    “Also count on appealing alternatives coming out of Apple and Google, sooner rather than later.”

    So you are saying that we get a new Skype, just better? Yay. :-)

  3. AlanLindsay’s avatar

    I think you are looking completely at the wrong end of this. It has almost nothign to do with WP7/Nokia – that possibility is just an extra and everything to do with a full stack of IP-based communications available from enterprise to consumer level across a broad range of Microsoft ddevices and software.

  4. Doc Searls’s avatar

    Maybe you’re right, Alan. Here’s Fred Wilson on the matter. Also Ben Horowitz, Om Malik and a Ballmer interview. All upbeat and optimistic (though guarded in Fred’s case). And maybe that “full stack” is all Microsoft wants.

    But I doubt it. My guesses are based on Micosoft and Nokia history (especially recently, since Elop came there from Microsoft), plus the enormous gravitional pull of Business As Usual in the telecom world. That’s about it.

    Martin, Apple and Google can both beat Skype in UI (Skype’s keeps changing and never gets good), but lack the codecs they need to compete with Skype’s audio, which kicks ass when it works. Maybe they can fix that. Certainly they’re motivated.

    As for competing with Skype in IP bypass of the phone system (making skype-to-skype and skype-to-phone calls), I don’t know. Google and Apple both do their own bypass, or facilitate it (in Apple’s case), yet have deals with telco partners. Nokia and Microsoft also have telco partners. What matters is that none of those partners have never liked Skype bypassing them. So I don’t expect Skype to get much better at something it was born independent from and its new partners hate. As a phone system of sorts, I think it’s frozen where it is right now.

    Microsoft, by all reports, loves and wants the videoconferencing stuff. Nice, but how interesting is that, really?

    As for Andy Ihnatko’s take, it’s a fun read, as usual. Not sure it’s the best take, though. Could be there isn’t one. We’ll just have to see.

    Meanwhile, there’s what Don Marti said, which I love. Just added it to the post above. Also this from Dan Lyons. It really is hard to imagine Microsoft not screwing it up.

    I also like what Cringeley says.

  5. Chip’s avatar

    Doc, as always, you have it well covered.
    Wife was asking me about this, I commented, that it’s likely good for MuSoft, but only to try to sell more of the SOS (same old stuff).

    Much of my office suite has migrated to google docs, I can iChat with daughters on left coast and overseas … haven’t skyped for some time.

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