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Skype: Microsoft's $8.5 billion identity tool

With VoIP on the side

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Open...and Shut In 2005, eBay bought Skype for $2.6 billion to bring voice communications to the online auction site, claiming the combination would "revolutionise the ease with which people can communicate through the internet." Four years later, eBay sold Skype for $2.75 billion because no one wanted to talk to the other party in a transaction.

Now that Microsoft has picked up Skype in an $8.5 billion deal, let's hope that it appreciates what eBay never did: Skype is more valuable as an identity tool than as a VOIP service. Identity is the Holy Grail for the Internet, which is why Google and Facebook desperately want users to be themselves, and not a pseudonym.

Google has been more upfront about this, perhaps because Facebook doesn't really have to coax users into using their real names. Facebook is where you hang out with high school friends and that person you met at a bar: fake identities just don't work very well for true social networking.

In other words, Facebook has identity data, and Google wants it. Skype? It could help Microsoft map the identities of over 100 million Skype users, adding to the more than 500 million MSN users Microsoft claims. Such users, however, are largely anonymous. I have an MSN account (two or three, actually), and use them under different names for different reasons (mostly to collect spam when I sign up for things online).

And I'm one of the "good guys." The proliferation of fake online identities is a real problem, with as much as 40 per cent of website user accounts being fraudulent.

Adding Skype, which only works if the two (or more) parties to a voice or IM chat actually know the identity of the person on the other end, can provide a real richness to Microsoft MSN user data, and also offers a platform for further mapping out identity online. I have been surprised by how mainstream Skype has become among older, less technically savvy people that I know.

Such people aren't hiding behind pseudonyms. They want their children living abroad to be able to easily find and add them as contacts. Yes, there are great reasons for Microsoft to use Skype's collaboration features in its Office and other products. But just as eBay could have benefited much more from using Skype to add identity data to its online transactions, further deepening trust between buyers and sellers, so too might Microsoft find Skype's identity data more useful than its VOIP service.

Even as the web makes it easy to do business with an obscure buyer or seller on the other side of the globe, the need for trust - for trusting the other's identity - has never been greater.

Skype offers communication tools, yes. But it's ability to deliver identity is much more valuable. ®

Matt Asay is senior vice president of business development at Strobe, a startup that offers an open source framework for building mobile apps. He was formerly chief operating officer of Ubuntu commercial operation Canonical. With more than a decade spent in open source, Asay served as Alfresco's general manager for the Americas and vice president of business development, and he helped put Novell on its open source track. Asay is an emeritus board member of the Open Source Initiative (OSI). His column, Open...and Shut, appears twice a week on The Register.

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