Comments on: Cringely’s Predictions for 2006

By: Ro

Ro — Thu, 19 Jan 2006 14:41:39 +0000

There's a number of folks who've already done a lot of rights negotiations and own a DRM system. I honestly thinks that's more commoditized than you think. Providing wide access and distribution to that however is something few outside of iTunes is even close to, and the reason iTunes maintains its leverage with rights owners is its distribution via millions of iPods (comparable to that volume of users with Skype). Hearing streaming music from your Skype enabled phone, handset, PC is not even a stretch... Btw, how many consumers are even aware of BitTorrent vs Skype. And competing with Tivo is barely a concern. Seems like Tivo is competing with a whole lotta folks these days.Enterprise software IS converting to Enterprise applications served via web service. It's already happening... Enterprise communications won't be dying off ever though Jeffrey and has only complementary connection to Oracle. So not sure what point you had there.

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By: Jeffrey Mcmanus

Jeffrey Mcmanus — Wed, 18 Jan 2006 02:32:57 +0000

There's more than one platform for delivery of P2P content today (and delivery isn't the hard problem to solve here anyway, it's negotiating with rights holders and then figuring out how many pennies you're left with after you've mortgaged your children to them). Running a high-growth, high-margin business based on P2P would fall into the category of a Neat Trick, but if that's in the cards, rock out with it. Your competitors are now BitTorrent and Tivo. Enjoy!I don't see eBay as an enterprise software delivery provider (not because eBay can't do it but because I see enterprise software as a concept slowly dying). However, in raising that issue it looks like you've perhaps unwittingly taken the discussion full circle, to Tim O'Reilly's prediction that eBay will someday purchase Oracle. Kudos!

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By: Robert Young

Robert Young — Tue, 17 Jan 2006 15:52:35 +0000

That last comment by Ro is, from my perspective, right on the money! Put another way, eBay will extend its dominant people2people transaction marketplace into the digital products arena via Skype.Now that's big... very big.

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By: Ro

Ro — Tue, 17 Jan 2006 14:26:00 +0000

Here's a thought (completely personal and in no way tied to eBay/Skype). What if Skype as a voice service was just a means to deliver an accepted/legal P2P service to the door of every user/consumer? The delivery of large data files is already embedded to the Skype network. Is there a BitTorrent type service for consumer/business here but with access across the entire network of users (vs downloading a new app to enable it)...I can imagine that if you own the standard P2P operating environment/platform with hundreds of millions of users (tbd), Skype would be a fantastic delivery mechanism for media (music, videos, etc), software and content that could be delivered to any node (pc, wireless). There is money there...Also, I really think there's a huge opportunity under the enterprise/SMB banner which is essentially untouched atm. Skype Groups is an initial launch in this direction, but consider what companies currently pay for communications. Again, if you own the standard (ala Paypal) extending that standard to the business community while embedding more security, higher quality or more feature rich functionality (web conferencing) translates to $$. Much like you will hear at Evans Data Conference Jeffrey (if you stick around), it's all about stretching the business via one platform... own the standard and free C2C => paid B2B.

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By: Jeffrey McManus

Jeffrey McManus — Tue, 17 Jan 2006 12:36:36 +0000

Finally, he has arrived!So, I'm not really arguing that Skype doesn't have a critical mass or critical momentum. That much is clear. I'm just trying to see the synergies as Meg tried to lay them out when the acquisition was announced, and to look to the future.If Skype returns $100M revenue to the business this year, which seems pretty likely, then eBay paid a 40X multiple, does that sound about right? That's actually not awful in terms of some of similar companies (including eBay itself which has a P/E in the neighborhood of 60+ at the moment) but you gotta wonder where that growth goes two years down the line when this stuff gets utterly commoditized.

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By: Ro

Ro — Tue, 17 Jan 2006 10:47:51 +0000

I'm just flowing with thoughts here... To add to the commentary above, becoming the VOIP platform of choice is the endgame. Monetizing via SkypeOut should be only the the very base of revenue for Skype. With 60+MM users, either by partnering, acquiring or emulating concepts driven by the developer community, other revenue streams will naturally surface. Paypal is a great example of this. Paypal's original service for consumers was absolutely free. It's business/enterprise service was not however. Could Skype introduce an enterprise-level or premium service once it's taken outright leadership in the VOIP space with a low-cost or free consumer service? Could that be worth billions of dollars in revenue? The answer for both is unequivocally yes. It happened with eBay, with Paypal and soon with Skype...

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By: Ro

Ro — Tue, 17 Jan 2006 10:33:43 +0000

Btw Jeffrey. When I was pressing 'Post' a couple of seconds ago, I realized a second later that the Yahoo Ads to the right of this commentary proved my point. There were Skype ads from four different developers advertising to the Skype community... :)

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By: Ro

Ro — Tue, 17 Jan 2006 10:26:38 +0000

Wow the red carpet :) Thanks Jeffrey! I think its interesting Cringely states "Skype won't contribute much to the company in 2006/2007". That's like predicting "Jeffrey McManus will do a better job this year"... completely ambiguous. (And in this case you and I know Jeffrey it's not true ;))When your contribution margin is over a billion growing at ~30%, a $50-$100MM impact could be viewed as 'not much'. So I call foul. What I predict is that Skype will maintain global leadership in VOIP and VOIP will become the predominant form of communication for C2C, B2C, B2B. The last two companies my wife and I started enabled VOIP services, so I do know a little about this. Ultimately, what Skype does enabling its platform will drive its success (which is already fairly massive). Consider how many companies have 60MM users? I bet even Yahoo wouldn't mind figuring out how to monetize that community. It's this user community which will drive a large, thriving developer community (all of which are figuring out interesting new ways of monetizing said community over and above SkypeOut/SkypeIn). I also recall people wondering how the heck to monetize online search (which is a free service folks). Hmm. What eBay/Paypal does with Skype is great for eBay/Paypal, but ultimately just the cherry on top for the opportunity at Skype. So even if Cringely comes close to whatever his prediction even means, I predict he'll be dead wrong when it comes to the ultimate success Skype as a market leader in VOIP. Was it worth $2.7-$4B dollars? Absolutely. Waiting for your counter Jeffrey ;)

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By: Jeffrey McManus

Jeffrey McManus — Mon, 16 Jan 2006 12:19:14 +0000

Not sure how that actually hurts Microsoft in a world in which Office's biggest competitor is Office 97 and OpenOffice has no compelling advantage over MS Office besides being free. There's also considerable risk in being the conduit for free software -- mom and pop are going to assume that Google will be responsible for upgrading, support, etc., and they when they don't step up, mom and pop are going to get cranky.

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By: Ed Kohler

Ed Kohler — Mon, 16 Jan 2006 07:20:42 +0000

I think Google is more likely to release more and more desktop software through Pack once they've effectively rolled that out using a link on their homepage. If they push OpenOffice through Pack, they could hurt Microsoft without getting into the hardware or OS business.

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