Infomatics has released some data on mobile phone growth for the year. Subscribers are set to jump from 335 million to 380 million this year - however, if we look at past trends, each year's "estimates" have been exceeded quite significantly, so I wouldn't be surprised to find the same going on here. Although many developed countries are nearing saturation, developing countries will push the growth, and we'll start to see more people around the world supporting 2 or more devices. Via Moore's Law

The rumours were true. Skype has been sold... to eBay. At a $4.1 billion dollars, I think they've done pretty well with the sale. Probably better than anybody expected. About half of eBay's cash reserve has gone into the deal, according to Jeff Clavier.

It's an interesting acquisition, likely to cause some rumbles in the stock market and in the markets themselves for some time. Only time will tell what this pairing will truly mean, but some of the plans are already up front in the press release:

Skype, eBay and PayPal will create an unparalleled ecommerce and communications engine for buyers and sellers around the world.

“Communications is at the heart of ecommerce and community,” said Meg Whitman, President and Chief Executive Officer of eBay. “By combining the two leading ecommerce franchises, eBay and PayPal, with the leader in Internet voice communications, we will create an extraordinarily powerful environment for business on the Net.”...

Online shopping depends on a number of factors to function well. Communications, like payments and shipping, is a critical part of this process. Skype will streamline and improve communications between buyers and sellers as it is integrated into the eBay marketplace. Buyers will gain an easy way to talk to sellers quickly and get the information they need to buy, and sellers can more easily build relationships with customers and close sales. As a result, Skype can increase the velocity of trade on eBay, especially in categories that require more involved communications such as used cars, business and industrial equipment, and high-end collectibles.

The acquisition also enables eBay and Skype to pursue entirely new lines of business. For example, in addition to eBay’s current transaction-based fees, ecommerce communications could be monetized on a pay-per-call basis through Skype. Pay-per-call communications opens up new categories of ecommerce, especially for those sectors that depend on a lead-generation model such as personal and business services, travel, new cars, and real estate. eBay’s other shopping websites — Shopping.com, Rent.com, Marktplaats.nl and Kijiji – can also benefit from the integration of Skype. - Skype Press Release

The deal truly speaks volumes about markets and convergence. We've heard that "markets are conversations" from economists for ages, and eBay truly embodies this action between the actions of buyers and sellers. Skype is that platform for communications in real time, and brings true conversations to the market, where it will play out in everything from transactions to improved buyer relations to, as Ross Mayfield notes, identity.

From a user perspective, I hope that Skype turns around from the downward growth into positive numbers. That I receive no eBay spam or embedded ads. And that the product continues to evolve for the benefit of us users.

I just saw a rumour that eBay could be on the prowl to buy Skype. Bit of a business model shift, it would seem. The news comes out of the September 8th Wall Street Journal:

EBay Inc. is in talks to acquire Internet-telephony company Skype Technologies SA for $2 billion to $3 billion, according to people familiar with the matter, in a deal that would represent a dramatic shift in strategy for the world's largest online auction site.

The talks are in a sensitive stage and could fall apart, according to one person briefed on the matter. Luxembourg-based Skype, whose software allows consumers to make free telephone calls around the world using Internet technology, has been in active discussions with other technology companies, and none has led to a deal.

But the emergence of eBay as a suitor reveals a lot about the auction leader's growth prospects and strategy. While still dominating its field, eBay's core business is maturing, and the company is searching for new product categories and international markets. The company has made a steady string of acquisitions and investments over the last year and a half to enter markets such as rental-property listings, online classified-ad listings and comparison shopping.

Granted that its core business is maturing, I still don't see how VoIP fits into anything near a similar business strategy. From what the article notes, Skype is the only potential buy that is completely outside the eBay market - the others in shopping and classifieds at least fit the same business model.

So, this sounds like a crazy move on both parts. Don't you think?

News via Infectious Greed.

Technorati Tags: eBay, Skype, VoIP, Acquisition

I spoke with Lee Holz of the LA Times last week, and he wrote a story -- Camera Phones Give Flashers Unexpected Exposure -- about the Thao Nguyen subway wanker. Good summary of the whole affair to date. [tags: sousveillance, friendly_chic407, thao+nguyen], lee+holz, swarms, moblogging

Skype looks like it has had a summer lull. The use of Skype has been growing all year, but from the minutes used per day, it looks like the average has been declining all summer. IS this a summer thing or competitive pressure? Hard to say. I would be worried - VoIP is on the upswing, so it's odd to see declining use in Skype.

Average minutes of use per day

* Jan - 28,954,133
* Feb - 37,533,906
* Mar - 41,745,885
* Apr - 41,732,959
* May - 39,451,552
* Jun - 38,479,729
* Jul - 35,754,556

Via Skype Journal and EuroTelcoblog

I have played with Google Talk a bit more, since first getting onto it yesterday, including downloading the PC native client on Virtual PC. Given my laptop set-up today -- no head mike, not even my iSight -- on the road, working out of hotel room, it's hard to judge sound quality on the push-to-talk feature, but it is clear that this is meant to be a direct competitor of Skype, the upstart that has roiled the instant messaging world with its meteoric growth in the past year.

I was also surprised that Talk is not integrated into Google Desktop, at least not on the current released version. This is the future, however. The plug-in architecture they've developed should make that a snap. A little more ambitious to tightly integrate instant messsaging -- presence, for example -- into other apps, like gmail. And that would make the gmail solution competitive on the enterprise front with Microsoft and IBM offerings, although they do need to create a small client for offline email. management.

What about Talk capabilities integrated into Orkut, and Blogger? Many, many integration opportunities. Nerdvana is on the way?

Obviously, I expect to see video in Talk before you can catch a breath.

I am unhappy that Google has opted to not roll out a Google Desktop app for Mac , but at least with the iChat Jabber integration, I can ride the Google Talk wave a little. I hope the Apple and Google folks figure out how to make the cross-talk work... hey, wait. It might be working already, and I just don't know. more to follow.

I now run a bunch of instant messaging clients on my desktop, for a variety of boneheaded reasons:

1. iChat - I am on the Mac, and iChat is really a cool way to interact with other Mac users, so long as they are likewise using iChat, that is. iChat also gateways to AIM and Jabber, so I use iChat as my client to talk to those worlds, but that can be less than optimal, since a number of the AIM and Jabber features don't work in iChat, or the other services don't support iChat style addresses. My handle is stoweboyd@mac.com, which various AIM services don't recognize as an AIM address, for example.
2. I recently downloaded the Yahoo Messenger client, because I wanted some means to IM with Yahoo folks. I discovered that a/ the user interface is ugly, and b/ all the neato-cool features of the new Yahoo beta are not supported on Mac: that same old Windows-first approach of dissing all the Mac minority.
3. I just have given up on Microsoft instant messaging solutions, primarily because of their antipathy for Mac. If they had ported Outlook to Mac, I probably would have stayed with it, since so many applications and services integrate with it (like Plaxo, for example), but I have made the jump over to Mail and iCal.
4. I had tried to run various multiheaded instant messaging clients on the Mac, like Fire and Proteus, but they were maddening, so I have dropped them, at least until the time that someone comes up with a way to support more than just text interoperability. I really need audio and video.
5. And then there is Skype. That has become the number two instant messaging solution for me, and often an IM chat in iChat becomes an audio call in Skype. I am considering swithching to Skype as my primary conduit, and most likely will do so when the video capability is debuted, later this year. There are several third party solutions, like vSkype and dialcom's spontania4IM, that support video, but they do not support Mac (Grrrr).

My pal, Stuary Henshall, who is perhaps the world's leading Skype head, sent me this message:

So I went to look at the Jyve Tools, and, yes, you guessed it, they only run on Windows. So I can't post the neato-cool chiclet on Get Real showing my Skype presence, as shown here.

The Apple folks ought to get with the big switch that is going on here, and make iChat integrate completely with Skype, or pay someone to build all these cool Skype related widgets for Mac. Because I think that Skype is building the kind of momentum and user base that could lead to a wholesale defection from the other services, and I for one am ready to quit.

Since Apple decided not to build a closed network of their own, nor to rely on the federated model of Jabber, they should licence Skype and build it into the next generation of iChat. Skype is already squarely in competition with Yahoo and Microsoft, given the strong push those companies are making toward VoIP in their instant messenging products, but Apple has seemingly let that battle go, choosing to not add VoIP into iChat.

So a tighter link with Apple is likely to be a good move for Skype, based on the principle that the enemy of my enemy is my friend. Especially when Mac comes out with iPod Phone (including video!) and squares off with Microsoft in the looming monster battle for the living room: the little black box that will control the family's internet-based entertainment. It's going to be Apple, with the killer iPod brand and partnered with Intel, versus Microsoft's Xbox and Windows solutions. Apple lacks various key pieces of the puzzle -- like a viable game platform, instant messaging plus VoIP, and a tivo solution -- but Jobs is likely lining those pieces up.

And, just as a side effect, one outcome of that battle is likely to be consolidation of the fragmented instant messaging world. If and when someone wins that battle I believe it will be like Betamax/VHS, and the standard will become ubiquitous. Its early to call a winner, but Microsoft's flabby innovation these days when contrasted with iPod's market dominance in digital music makes me nod toward Apple. And if Skype wins big as a result, thats cool with me. I just want one buddylist, and if the government isn't going to force interoperability, llike they should, then I am rooting for an instant messaging monopoly. And please, God, don't let it be Microsoft.

Niklas Zennstrom, co-founder of Skype, estimates that 30% of its 40 million customers are corporate users. via Financial Times Tag: skype

News out from the FCC that the number of landlines in the US has officially been outstripped by cellphones. [Engadget]

"By the end of the year, there were 181.1 million cellphone subscribers, compared with 177.9 million access lines into U.S. homes and businesses, the Federal Communications Commission said in a biannual report."

Cellphones have already reached this peak in India, China, Norway and Sweden, to name a few. In Sweden there are actually more cellphone subscribers than inhabitants. Yes, that includes all age groups. So, given that some people don't use them at all, you're likely to find people out there with 2 or more cellphones. [Smartmobs]

Do you think landlines serve a purpose anymore? If so, what?

Motorola has announced the Motorola Ojo Personal Video Phone.

Ok, I am sold on webcams and video conferencing. I'm there. And I can't wait to be able to do it on my cell phone. My new Sony Ericsson s710a has streaming video and video recording capabilities already (psst... any Sony Ericsson or Cingular folks who read this and want my life to be more beautiful, please tell me how to get the damned thing to connect to the EDGE network, please). But the George Jetson-esque video phone, this Ojo thing, that requires a special service, and folks on both ends to have indentical devices? You must be kidding me.

The system requires you to plug the gizmo into a broadband modem (like a cable or DSL modem), and its not wireless:

[from FAQ page]

Q: What if my cable modem is in my upstairs office and I want Ojo in my kitchen downstairs? Is there any way I can put Ojo in my kitchen without relocating the modem there, too?
A: Consider using HomePlug® products that allow you to connect computers and other broadband devices through the electrical circuits in your home to your modem/router. Please view www.homeplug.com for more information about these products. Ojo video quality is likely to be less than optimal when connected through the electrical circuits in your home.

This one is destined for the ash heap.

Yahoo! has had a frenzy of activity this year, and it's still early. It has just been announced that Yahoo has purchased dialpad, a VoIP provider. Rather funny since everyone has just been waiting for Yahoo to scoop up Skype. Well, right idea, wrong company.

Yahoo's purchase of Dialpad will give them fast entry to VoIP services on their own terms, rather than using the services of others (such as their past use of Net2Phone). As well as VoIP, Yahoo gains all of Dialpad's fraud management detection that can be made use of in other Yahoo areas.

So, we can see Yahoo moving all over the place to build an integrated space with value adds. Definitely moving much faster than either MSN or AOL. Wonder what kind of ripple effect this new acquisition will cause.

I caught wind of this news on Andy Abramson's blog, but Om Malik broke the news first.

So, it's been flying around the web. Yahoo does VoIP.

From Advanced IP Pipeline I first caught the news that Yahoo was unveiling a beta IM that supports voice calling - VoIP. It also includes other features such as voicemail that are comparative to those at Skype. Yahoo Messenger 7.0 has replaced the wold walkie-talkie voice component with a more true VoIP component - where conversation is unrestricted and open.

The calling features of v. 7.0 includes free PC-to-PC and messenger-to-messenger (buddy-to-buddy), as well as free voicemail and call history. Although it was not apparent at first, they also do PC-to-PSTN calling - calls to any end phone. Many people missed this fact (read below) and so many people were bashing Yahoo for saying they did VoIP without adding in the PC-to-PSTN component - without it, the release would have been more like VoIM.

Yahoo has minimized this aspect of the service in their press release package. And even in their website content, actually, as Tom Keating found out. Perhaps because it is not proprietary, but rather made possible through a third party, Net2Phone. Even then, it would be good to know, don't you think? Perhaps a bit more newsworthy than Pc-to-PC calling in the first place.

Here is the title of the press release on Business Wire: "Yahoo! Messenger Announces Free, High-Quality Worldwide Calling" - and yes, they do. PC-to-PC. Nothing in the release about PC-to-PSTN. The only area of the Yahoo Messenger or Yahoo Messenger Beta sites that actually contain the nugget of info that is the true BIG NEWS - the help pages. Go figure. I think Yahoo won themselves an unexpected amount of bad press. But we'll see how they recover.

Although off topic, the new Messenger has upgraded features such as better photo sharing, integration with 360 and spim control.

Oh boy, things are moving fast in VoIPland. At IGN.com, Craig Harris reports from E3 2005 "Earlier this week, we reported that Nintendo would be demonstrating something called DSpeak at its Electronic Entertainment Expo booth this week. After experiencing it hands-on, we can tell you what it is: Voice-over IP using the Nintendo DS' wireless and microphone capabilities." Just a concept demo, but this should create even more panic in the traditional phone companies. [pointer from Waxy.org]

[tags: Nintendo DS, Dspeak]

Skype just announced a partnership with Fiberlink, a company developing voice-data solutions for enterprise mobility. Without all the legwork, they've successfully managed to get a leg into selling to corporate clients. Way to go Skype. I personally think it's a great move. I use Skype for most of my business contacts, for both voice and chat components. It's ability for multi-user chat and voice conference, not to mention the low-cost voice mail option, make Skype a great business tool. And, yes, this is despite the valid points about Skype's ability to use your resources given by Marc. From Om Malik

I came across a news piece in the Globe & Mail outlining the expected regulation of VoIP services by the CRTC.

The ruling will likely impose the same regulations on VoIP that are currently imposed on regular phone services. However, the article hinted at a few other interesting things. If I am not mistaken, the regulation would not apply to all competitors in the marketplace, but specifically those from the telecommunications industry but not those in the cable industry.

I find it interesting that the argument was surrounding which player would be dominant in the VoIP market: cable services or telcos. The argument for regulation revolves around the definition of VoIP: is it a phone or Internet product? Those in favour of regulation want to ensure that the large telcos don't offer VoIP services below cost in order to attract attention - this is a cut, despite the fact that VoIP services are currently cutting their revenue through increased competition.

Although they hint at competition, there is no recognition of such services as Skype, one of the most widely recognized VoIP players in the market. It looks like Skype would also be unregulated in the new bill. I find it difficult to imagine myself going over to a telco for my VoIP services. Not out of loyalty to Skype, but simply because I don't use the telcos for anything at the moment. No landline or anything. So, low cost VoIP services bundled into other products would not attract me. With cable, perhaps, but I still don't think I'll be entertained to another product.

Part of my decision to stick with Skype is that I don't see any future product from either telco or cable provider to offer the same level of social connectivity. I use Skype everyday, and quite a lot during the day, but rarely for voice services. Although the option is great, as is the multi-person capability, I use it for my IM. Group chats, simple interface, easy to manage voice to chat switches. Just simple.

So, although the CRTC may be focusing on regulation as necessary to control the VoIP industry from the telco perspective, I would like to see the issue move from "how do we define VoIP" and "how do we control VoIP" to "How can we integrate VoIP with other useful products." Note how I said integrate. Not bundle. Bundles represent packages for discounts, not integrated services.

Tag: VoIP

Thought provoking take on Google's grand scheme from Mathieu Balez:

[from The Good God Google]

What we're talking about here is the eventual creation of a perfect digital record of your entire memory, at your fingertips and searchable, all emblazoned with the Google logo and, certainly, some pertinent and unobtrusive advertisement. Scary? Maybe a little.

It is also most likely developing a Google-branded version of Firefox -- the up-and-coming Web-browser. There is no dearth of well-supported evidence on the Web pointing to this fact. Having its own browser out there grants Google the opportunity to package all of its services in one tidy delivery channel. It also further encroaches upon Microsoft's territory.

Most significantly however, it will be the opening move on the chessboard of next-generation desktop computing. I believe Google is vying to dethrone Microsoft as the potentate of PC dominance by pulling the rug out from underneath its feet, by changing the very rules of the operating system game itself. Not unlike its e-mail and mapping software, which are entirely Web-based, Google will release an operating system that will be completely networked and centralized on its servers. You will literally no longer need any software running on your local computer (except the Google Web-browser of course, and a network connection). The computing experience will involve booting your computer, logging into the net, and having access to all your programs (and most of your data) which will reside happily in the ether -- all protected and secure, we will be assured, by the good god Google.

He also hypothesizes the acquisition of Skype or Teleo by Google, which is an advance that I favor, as an end user, personally. I have junked my Vonage contraption, and gone over wholeheartedly to Skype: I now have SkypeIn and SkypeOut capabilities, and use it many times everyday. Integration of Skype with other Google services -- like search, Gmail and so on -- would be a natural. Not to mention Google could then presence enable search results. Imagine you do a search on some topic "google skype rumors" and you find that Stowe Boyd has blogged about it. Then you see that Stowe is online (via Skype), and you opt to read the piece, and then IM Stowe via Skype for clarification on something he stated in the entry. He clarifies. You then could post the result of the IM as a comment in Stowe's blog, or email it to a friend via Gmail. Even more cool if you could post Skype voice-over-IP as comments or podcasts. Pretty compelling vision, and one that would make the apparent low rate of innovation around Blogger sensible, since they may be waiting for a large number of pieces to fall into place before doing anything radical.

[pointer from Robin Dindayal]

[tags: Google Skype Rumor]

Stowe and I were having a quick catchup chat a few weeks back... starting with a bit of impromptu IM, but then wanting to branch off into a voice or voice/video session, or simply agree to do one 'later' given that we both had other pending gigs.... so Stowe asked for my Skype ID, and I mentioned that I had removed it from my machine, which prompted me to think that I'd better explain why!

I had found my machine encumbered by an alarmingly large number of attempted simultaneous TCP connections (enough to crash my browser at one point, and generally to slow down my machine, even though an 'open port' is not in-and-of itself alarming: it depends what happens on that port!), but looking around the web I found very few details to help me. Most items that I found expressing some modest concerns about Skype 'bandwidth' or 'CPU' usage were erroneously directed at the voice codec ('can it cope?', 'how much bandwidth does it use') and the encryption ('how much horsepower does it need'?). Those are the wrong worries: Skype is generally an awesome performer on both fronts, requiring pretty modest resources by today's standards (5Kbps for voice traffic, for example!). It's your machine's role in the big-picture P2P communications flow that you need to be worried about: think of your machine as a key hub for the world's voice traffic and you'll see what I'm talking about -- now that's something of an over-statement, but is closer to what you need to concentrate on, rather than the CPU-demands of the voice codec and encryption algorithm for your own personal calls!

Skype is the darling of industry, geeks, academics, and consumers, (hey, I'm a huge fan myself, sometimes wearing each of those four hats -- the dang thing is one of the greatest creations since sliced bread). But I couldn't believe that anything that was killing my machine could be so universally loved. Had I missed something? Lo and behold, a little more digging around brought a few more things to my attention.

Here are three sources of interest:

a) This highly technical article by Salman A. Baset and Henning Schulzrinne: "Analysis of the Skype Peer-to-Peer Internet Telephony Protocol". Here's a tiny excerpt to whet your appetite:

This report analyzes key Skype functions such as login, NAT and firewall traversal, call establishment, media transfer, codecs, and conferencing under three different network setups. Analysis is performed by careful study of Skype network traffic.
...
Like its file sharing predecessor KaZaa, Skype is an overlay peer-to-peer network. There are two types of nodes in this overlay network, ordinary hosts and super nodes (SN). An ordinary host is a Skype application that can be used to place voice calls and send text messages. A super node is an ordinary host’s end-point on the Skype network. Any node with a public IP address having sufficient CPU, memory, and network bandwidth is a candidate to become a super node. [emphasis mine]

b) A less technical article by Simson Garfinkel, "Can 9 Million Skype Users Be Wrong?", which says things like this:

"the Skype client running on your computer can and will relay calls between other network users without your knowledge. ... It makes sense that Skype would detect how much bandwidth you have... but... the algorithm that Skype uses to determine how much of this relaying it is allowed to engage in is proprietary, so we can't know for sure.

... The software has the capability of automatically updating and upgrading itself, allowing it to acquire new features at any time—potentially without the permission of the user. The software uses a secret protocol; all communications are encrypted. And Skype Technologies does its engineering in Tallinn, Estonia, has some business operations in London and registers its website in Amsterdam.

If I were going to write an information warfare thriller with a theme based on Invasion of the Body Snatchers, this is certainly where I would start. "

c) In-depth discussion of the Baset and Shulzrinne technical article in these Slashdot threads, including comments such as this one:

Calls made using the system are directed through 'Supernodes', which can be ordinary PC's with Skype installed. Machines on fast and well connected Internet feeds like the $Network are likely to automatically become 'Supernodes' and forward a considerable amount of traffic. This allows Skype to route other peoples Voice over IP calls using your machine and the university internet connection.

There's a lot of argument about how much of a resource hog Skype really is (and various commenters dispute Garfinkel's auto-update/bodysnatcher worry). I have in fact re-installed Skype on my machine recently in order to run some of my own empirical tests, and will report back with the results in due course. It certainly opens a lot of TCP ports, but that's not necessarily a bad thing depending on what exactly happens on those ports, as I mentioned above. Right now, I have yet to get a definitive result, but I'll keep poking around. Intuitively, I can assert (un-scientifically) that Skype is so much of a killer on my machine that even though I love it madly, I have to un-install disable it on occasion (after which my machine behaves wonderfully all over again). That's not good. I'll try to come back with a more scientific analysis in the next couple of weeks, but in the meantime would love to hear from others who have done the controlled experiments!

[tags: skype, voip, p2p]

Stuart Henshall is raving about the new Skype 1.1 beta which has both group chat and new voice mail service that has a decidely social flavor. [Note: As a new, happy, Mac OSX user, I can't play. I guess I could run it under Virtual PC, but...]

In the middle of a softball interview by Gartner's Tom Austin, Ray makes an interesting point about how stupid the current phone system is because it doesn't include presence, when it easily could:

Ray Ozzie

[from The Gartner Fellows: Ray Ozzie's Interview]

Notification and awareness is one of the most interesting uses of wireless devices that has yet to emerge. We're moving into a world of pervasive awareness, where you can control the publishing of awareness of your location, "projecting" to others your interruptability and the modes of communications that you find the most useful at the moment. For example -- when you're driving and have your hands on the wheel, you'd rather suggest to others that they call you rather than "texting" or emailing you. Or maybe they should just let you concentrate.

Projecting your interruptability to others might be really easy if we integrated our handheld wireless devices with our varied communication services. Take, for example, the phone. Why isn't it possible -- without navigating a million menus [which I guess means running an IM client on your phone] -- to slip a little button on the side to select one of four desired presence or interruptability states, customized to you: I'm in a meeting; I'm available to my "intimates"; I'm available for any interruptions; or "do not disturb". This state could be easily published by your wireless operator, through Web Services, to the on-line buddy list of your IM or email programs, or directly to other people's phones.

But the comments about phones and phones companies missing the boat on presence brings to mind something that came up in a phone conversation I had earlier this week with the CEO of Vonage, Jeffrey Citron. I had emailed him about the concept of an acquisition of Vonage by one of the established instant messaging networks. Initially, my interest was driven by the idea -- the power of fusing together the largest VoIP telephone company, with over 350,000 North American users with a public instant messaging network. He very carefully said something like "It would be inappropriate to discuss those rumors." Hmmm. That piqued my curiosity, of course.

But the discussion that followed was me trying to steer him toward IM integration, and him studiously staying away. We discussed the recent Viseon videophone announcement, and I pointed out that millions of webcams have already been sold, and are already running on PCs: why not build a desktop client for Vonage that leverages those. Citron argued that the quality of the webcams is uneven; well, sure. But there they are, and people use them already with the various IM services. So maybe its a strategy of not building stuff that your likely acquirers have already built?

On the otherside, taking use of smarter devices -- like a Vonage phone box that would use wifi or bluetooth to talk to portable or cell phones in range -- looks like something that is coming together. We may still have to fiddle with the menus -- there won't be a 'present and available' switch to satisfy Ray -- but we are getting closer, slowly, to a seamless integration of telephony and instant messaging. Although the stupid phones companies have blown the obvious advantages they had, and are leaving it open for the Vonages and Microsofts of the world to take it all over.

Vonage has announced a partnership with Viseon to combine Vonage VoIP telephony with Viseon's cool looking video telephone (very Jetsons).

My bet is that this won't go. Why doesn't Vonage just build a video IM client for the PC (not a softphone), that supports video? There are gazillions of webcams out there, and soon to be millions of cell phones that will support video. This is a device that won't fly.

In a recent email alert, ABI Research argues that the size of the instant messaging market will lead to acquisition of Vonage by Microsoft, AOL, or Yahoo:

Vamsi Sistla

[pointer from Om Malik]

Millions of people use the big IM services. Some use their voice capabilities. But the experience is pretty horrible. You have to sit at a computer, use a microphone and speak loudly. And it goes over the public Internet, so quality is poor and security is suspect. Why aren't they doing anything about it? They have an established presence: why don't they buy out a Vonage, an Avaya or a Voiceglo, integrate their technology and start offering packages to existing and new subscribers? Isn't that a huge revenue opportunity for them?

Microsoft, on the other hand, has designs to circumvent the traditional phone networks, just like Vonage is doing. That matchup seems made in heaven. We'll see, but Sistla may be onto something here.

In a move reminiscent of the deal that VHS backers made with the pornography industry to destablize the Mexican standoff with Betamax, Skype has made a deal with bad-boy peer-to-peer file sharing phenom Kazaa:

[from RED HERRING | Bride of Kazaa]

Skype, which is headquartered in Luxembourg, currently claims 30 million downloads, with 900,000 more downloads per week. Kazaa boasts 300 million users. Bob Hafner, an analyst with Gartner, says Skype gains more than numbers. The typical Kazaa user is precisely the customer Skype is looking for - early adopters looking for low-cost services. Since Skype's basic services are free, the company will depend on additional services to grab revenue. Skype recently introduced its SkypeOut prepay service, which for 2 cents a minute allows users to call traditional landline and cell phones. Though SkypeOut has just begun to win over users, Skype will continue to provide potential revenue-builders like a voicemail service and a SkypeIn telephone number to receive incoming calls.

Still, Skype may pay a price for its new customer base, as Kazaa's legal past could bring trouble for the VoIP firm. Sowmyanarayan Sampath, a consultant with management and strategy firm Adventis, compares bundling Kazaa with Skype to giving away candy in cigarette packages. "Inserting a product with no legal issues into a product of legal issues will give you problems," he says.

The long-rumored Microsoft "Istanbul" has been leaked to the press:

the Associated Press

[from Microsoft to Debut 'Istanbul' Application]

BOSTON (AP) -- Microsoft Corp. introduced on Tuesday a desktop computer application that aims to seamlessly integrate e-mail, instant messaging, video conferencing, traditional phone service and Internet-based calling.

Microsoft plans to debut the product, code-named "Istanbul," sometime in the first half of 2005. It will compete with efforts from rivals including IBM Corp. and smaller players such as Convoq Inc. to link together various channels of communications and promote their most effective use.

The products employ "presence" technology, which tells users whether co-workers are online and their degree of availability -- whether they can take a phone call or prefer to be e-mailed or to instead join a Web conference, for example.
The idea is to enhance the "buddy list" concept of instant messaging so workers can choose how to best communicate in a given moment, bringing an end to games of phone tag in a world of packed schedules.

For those who have been talking to the folks at Microsoft, this is no surprise, as I said here recently, although a lot of so-called Microsoft watchers were still in the dark last week.

Microsoft has everyone stymied regarding its plans for VOiP:

Ellen Muraskin

[from Microsoft's Looming VON Announcement: Not VOIP? I'm damned if I can figure out what Microsoft Corp. is going to announce with the first, most prominent keynote of all at this month's Voice on the Net [VON] show, if not telephony links to its LCS (Live Communications Server). The keynoter is Anoop Gupta, corporate vice president of Microsoft's real-time collaboration business unit -- the one charged with LCS.

The "tattler" leaks reported by Mary Jo Foley support my hunch, even as she gets an official denial from Redmond. Maybe there's some technicality here we're missing?

[from Real-Time Revolution]

G[urdeep Singh Pal]: Yes. That's why CTI (Computer Telephony Integration) crashed and burned. Even at Microsoft, we tried like 23 goes at CTI, but they failed because they didn't integrate with what was already there. They used a separate address book, they had no idea of presence: it was a totally different user experience. But imagine instead the example we had before, where the pawn associated with the paragraph's author could also allow you to right-click and dial -- I would be able to get them, without even having to know what phone they were using, or the number. Again: applying the same user experience makes it easy.

S[towe Boyd]: You are starting to dig into another theme I wanted to ask about: the increasingly clever devices that folks are using, and how they can incrementally improve things. A friend of mine has a Bluetooth enabled cell phone, and when it rings, the Outlook contact pops up on his Bluetooth enabled PC. He already understands how to use Outlook, he knows how to use his cell phone, and now they provide a higher-order value through this in-context integration. I know, obviously that Microsoft is involved in many initiatives clever devices: PocketPC, Smartphones, tablet PCs, game machines, and who knows what else. So how does that vision converge with the vision in collaboration technologies?

G: There are going to be some devices that will be more mobile, always with you. And you want to allow collaboration on that device to the extent of the fidelity possible on that the device. You won't want to bring down the fidelity of the entire collaboration session just to the least common denominator.

S: You don't want to force everyone to use WAP just because one guy is on his cell phone.

G: Right. One very important case for us is PDAs and Smartphones, and not particularly smart phones, too. We have a number of critical partnerships, specific development we are doing, and some research we are doing in Microsoft Beijing.

For anyone that doesn't use Skype, it is an Internet-enabled phone service much like Vonage, Packet 8, and the like. The main difference is that out of the box, Skype does not route through traditional phone lines. Instead, both parties install the software and then talk to their heart's content - FOR FREE.

That alone would not be very impressive. Skype also adds in a simple contact manager / IM client that lets you see who's online, place calls, and conference people in as you desire. That's a nice trick. Another great trick is the Skype Out feature. With Skype Out, you can use your Internet-enabled computer to make calls to regular phone numbers, for a relatively small per minute charge.

Skype has now released their newest feature, a Pocket PC version of their application. The marvel of this is that now, with a handheld and WiFi, your PDA has become your cell phone, at least in part.

Truth be told, this is a different form of convergence. We've grown accustomed to the talk of the consolidation of devices and roles. In general, most of that talk focuses on how our cameras will eat our MP3 players will eat our cell phones. Products like Skype, and VOIP technology as a whole, are really demonstrating how software will contribute to that unification.