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Skype Video - Does it Matter?

December 1st, 2005 Posted in VOIP Services, Competition/Skype

After much speculation, Skype has come out with a new beta version
of its software that features video. The Skype community appears to be
enthusiastic about the new bells and whistles, which include a
simplified user interface and personalized message. In the scheme of
things, it's a major forward for Skype because it moves the
service up the telecom food chain. After all, voice was just so last
year; whereas video is so “in”. Just look at all the optimism
surrounding IP-TV even
though it's still unclear how it crack the cable empire. That said, I'm
finding it hard to get a handle on what Skype's new features mean -
other than perhaps a new source of revenue. Part of my growing
skepticism with Skype is eBay's unwillingness to articulate how Skype
fits into the bigger strategic picture. If we knew where eBay was going
with Skype, it would be much easier to understand the importance of
video. For example, does eBay plan to introduce a free or fee-based
video services allowing buyers and sellers to communicate other
than using e-mail or a VOIP call? Maybe eBay is still trying to
formulate its Skype plans as its reshapes Skype's management team. In
the meantime, Skype has to keep moving forward to fend off rivals such
as Gizmo, which is quickly
gaining the street cred Skype used to possess. One thing I find
interesting about Skype Video is how it will take on third-parties in
the Skype eco-system such as vSkype (now Festoon)
that have carved out a nice niche by developing an add-on service. It
makes you wonder how deep the new Skype is willing to go to generate
revenue growth - a key component to justify the $2.6 billion to $4.1
billion coughed up by eBay. For a review on Skype Video, check out RealTechNews.
Update: Despite a glowing review
by Walter Mossberg in the Wall St. Journal, Om Malik doesn't think much
of Skype Video. Instead, he's pining for Google Talk to improve its
game.

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