Feeds

Skype won’t make it, says WSJ columnist

Zennstrom replies

  • alert
  • submit to reddit

Beginner's guide to SSL certificates

A scathing criticism of Skype, the new Voice over IP Peer-to-peer system from the KaZaA founders, was voiced in the Wall Street Journal last week in an article by Lee Gomes, stating that “Skype calls are peppered with frequent voice drop-offs, as well as all manner of clicks and pops and the call often ends for no good reason. A traditional phone call may not be any sort of audiophile dream, but at least it's reliable.”

The author said that Skype has no chance of becoming the new global phone network as its creators hope, because it is largely unnecessary with phone bills down to just $40 or so a month and discount international calls coming on the scene. The article went: “Free music. Now that was a great Internet deal. But free phone calls don't have quite the same appeal.”

Niklas Zennstrom, Skype founder, immediately hit back at the comments in a communication with Faultline: “Lee is comparing Skype, 8 weeks out of beta launch, with the traditional circuit switched phone companies who have been around since the T-Rexes (well OK for 100 years at least).

“I don't know how much people on average were spending on music, but I don't think it was as much as $40 per month as all Americans are spending on calling plans.”

His implication is that people who decided to download file sharing music were not even saving $40 a month, but they were happy to make the savings, so why not on phone calls?

“I also know there are millions of people who have relatives and friends abroad who would love not to have to pay for those international calls.”

“Gartner Group predicts that all calls in Europe will be internet based from the year 2020. I see a clear analogy of the shift from fax to e-mail with the shift from circuit switched phone calls to internet based phone calls. Today the fax is still around but lots of people use the email as their primary text/image communication system, and the fax is used when you want to send a signed document or something.”

When asked directly about the call drop offs and the quality problems, Zennstrom said, “We are in beta and the first priority is to deal with scaling and stability, secondly with audio quality. I am sure we will be able to improve the quality even more over time.”

The WSJ article did acknowledge that Skype may become the de facto standard for Internet phone calls and that it will no doubt get better in time.

In Faultline’s view Lee Gomes of the WSJ fails to understand how disruptive and discontinuous innovation works. The rules that have been observed through history are that you need to offer something half as good, for a tenth of the price. At least they’re the Faultline version of the rules, and Skype seems to fit in quite perfectly.

© Copyright 2003 Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of events that have happened each week in the world of digital media. Faultline is where media meets technology. Subscription details here

Security for virtualized datacentres

More from The Register

next story
It's Big, it's Blue... it's simply FABLESS! IBM's chip-free future
Or why the reversal of globalisation ain't gonna 'appen
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
Bitcasa bins $10-a-month Infinite storage offer
Firm cites 'low demand' plus 'abusers'
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
CAGE MATCH: Microsoft, Dell open co-located bit barns in Oz
Whole new species of XaaS spawning in the antipodes
Microsoft and Dell’s cloud in a box: Instant Azure for the data centre
A less painful way to run Microsoft’s private cloud
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.