Month: December 2005

Not to beat the drum too much, but Skype’s world (or that of its new parent, eBay) seems to get more complicated by the day. First there were the rumblings — mentioned in an item below — about the company losing its cool, about internal friction with eBay managers, and about “power sellers” being cool to the whole Skype revolution. Now, Yahoo has joined the party by adding new VOIP features to its instant messaging software. John Paczkowski at Good Morning Silicon Valley’s headline is great: “Feeling a little buyer’s remorse, eh eBay?”

Yahoo already allows PC users to call other PC users for free — as Microsoft’s MSN and Google Talk do — but now it is adding the ability to call regular phones for as little as 1 cent per minute, and to receive calls from regular phones for as little as $2.99 a month. Both prices are lower than what Skype charges. Susan Mernit notes that this could be just the beginning. And it seems obvious that Microsoft and Google are likely to add features similar to Skype’s for next to nothing — or perhaps (in Google’s case at least) even for free.

This may not be terribly creative, as some critics have noted, but that isn’t really the point. The point is to win market share, and the “first mover” doesn’t always have an advantage (Exhibit A: TiVo). As lawyer and tech blogger Rob Hyndman observed recently, getting displaced in such a way is even easier in a world where technology changes rapidly, is either cheap or even free, and users are constantly looking for the next greatest thing. Is that good or bad? That’s difficult to say. But it does seem to be the new reality.

P.S. At least one reader has pointed out (in response to a previous post) that Skype does have some proprietary differences from other VOIP products, since it uses a “peer-to-peer” model developed by Kazaa founder Niklas Zennstrom. That makes it easier to use in some cases, because it can find its its way through corporate firewalls more easily. That’s also why some companies block the software, however — whereas “open source” solutions such as the Gizmo Project have the benefit of being, well… open. And that can mean a lot.

As noted elsewhere, the always excellent Andy Abramson has a great analysis. He also notes that lost admit the Yahoo buzz was the news that Microsoft is rolling out voice features in Windows Live Messenger.

You might think that what Google does is simple — it indexes Web pages and other content, including news stories from various sources, such as my employer globeandmail.com — and then it lets people search for things. That’s not what European publishers and news agencies think it does, however. As far as they’re concerned, Google steals their content and then — to make things even worse — sells advertising that runs alongside it, thereby depriving them of revenue and stealing food out of their childrens’ mouths (Note: I made up that last part).

According to the Associated Press, Francisco Pinto Balsemao of the European Publishers Council said (or planned to say) at a conference in Brussels that “The new models of Google and others reverse the traditional permission-based copyright model of content trading that we have built up over the years.” Such companies, he said, “help themselves to copyright-protected material, build up their own business models around what they have collected, and parasitically, earn advertising revenue off the back of other people’s content,” which is “unlikely to be sustainable for publishers in the longer term.”

Just one question springs to mind: What planet is Mr. Balsemao from? Google and Yahoo don’t “help themselves” to copyright-protected content — they index it so that people can find it, and then they show them where to go to get more of it. That’s why searches return a bunch of links, rather than just a pile of other people’s content. Google News, which is the subject of a similarly narrow-minded lawsuit by Agence France-Presse, shows small portions of news stories and then links to the original site. If people don’t want to follow the link, that’s not Google’s fault.

Maybe Mr. Balsemao and his group will take their fight to the libraries and bookstores next — after all, they display copyrighted content and sell services related to it. How dare they?

The idea behind FON (which I heard about via gigaom.com) is a simple — and fairly seductive — one: Get as many people as possible to open up their Wi-Fi networks and share their bandwidth, and thereby create oceans of wireless hotspots for free. The venture, which was started by entrepeneur Martin Varsavsky (who founded and sold Ya.com and Jazztel), involves downloading some software that turns your wireless router into an access point and then shares it with other FON members. But will it work?

As Om mentioned, there’s more than a little bit of hippie-style, “bandwidth wants to be free” feel to FON. It’s not clear how the system would be organized, or by whom — not to mention how it would allocate your wireless bandwidth so that it didn’t get sucked up by freeloaders. Even the few details that are given have a wonky feel to them, since free users and sharers are categorized as “Linuses” (after Linux developer Linus Torvalds, no doubt), those who want to be compensated for sharing are “Bills”, and a third tier of users are known as “Aliens.”

Skeptics include Glenn Fleishman of WiFiNetNews.com, who posted a long response on Om’s blog, arguing that such a network would have limited use — since it would have large gaps — and would likely get swamped by freeloaders. He and others have also mentioned what is likely to be one of the main stumbling blocks, which is that sharing bandwidth the way FON wants to is forbidden by the terms of service of almost every Internet service provider in North America, with the exception of Speakeasy.

Update:

I should point out that not everyone thinks FON is a wacky, Quixotic venture. The new company’s board of advisors includes such Web luminaries as Dan Gillmor of Bayosphere.com, Joi Ito of SixApart and David Weinberger of Joho the Blog , as well as Rebecca MacKinnon, who is a fellow at Harvard Law’s Berkman Center for Internet and Society.

Even a few months later, the sheer size of the eBay-Skype deal still boggles the mind: $2.6-billion (U.S.) at a minimum, and as much as $4.1-billion if certain goals are met. All this for a company that hopes to have revenue of about $60-million this year, and (possibly) as much as $200-million next year.

The on-line auction site and its defenders say the price they have agreed to pay is justified because Skype is growing at triple-digit rates, both in terms of users and revenue. And they say the acquisition makes sense for eBay in two ways: Because Skype is a great brand, and because the company’s free voice-over-Internet service can be integrated with the auction provider’s existing business.

Those two pillars supporting the deal are not carved in stone, however. The first — the power of the Skype brand — is a very fickle thing, since it rests on a service that is not only free but one that can be duplicated relatively easily. Obviously, free services in a highly competitive market can succeed (Google is an obvious example, although it has proprietary search algorithms) but the risks are high, particularly in the on-line world, where the consumer’s allegiance can shift almost overnight.

And what about the second pillar — the idea that Skype could be integrated with eBay’s auctions to allow a “click to call” feature that would connect buyer and seller? That is still a question mark, and one which recently grew larger, after the head of a leading eBay “power sellers” group said that he and his members didn’t see any benefit to using Skype. Combine that with speculation about how eBay is taking over the VOIP company’s management, and that $4.1-billion bet the auction company made looks even larger.

for the rest of this column, please visit globeandmail.com

Update:

Rob Hyndman uses Skype’s travails to make a great point about some of the risks of starting new ventures when technology is so cheap and users are so fickle: he calls it “the best of times and the worst of times.”

A lot has been made of the dramatic growth of digg.com, a “social bookmarking” site that combines elements of Slashdot.org and del.icio.us. There are charts of its rise compared with Slashdot — the uber-geek site that is (or was) able to shut down websites simply by linking to them — and even a website devoted to the comparison. And now, digg.com says it plans to branch out from technology into other areas, such as news and sports. Is this the future of online news?

There are other, similar social-bookmarking sites, including Furl.net and reddit.com. But as Slashdot regulars know, a system like digg’s is open to abuse, and can lead to any useful information (i.e. “signal”) getting drowned out by all the noise, which is why Slashdot posts can be “modded” or modified by the rest of the community so that they don’t appear as high up, or disappear altogether. Some of the most interesting experiments out there are the ones that have tried to blend the “crowd voting” approach with news, such as Common Times.

Is that the kind of thing digg.com has in mind? If so, it should be pretty interesting to watch. Thomas Hawk has some thoughts along the same lines on his blog, and Don Grossman of A Venture Forth notes that sites like del.ico.us and digg.com can actually influence the news as well as helping to create it.

Another arrow got fired at wikipedia.org recently in USA Today, with an op-ed piece by John Siegenthaler Sr.., who writes about his outrage on finding an entry in the collaborative encyclopedia that described him as playing a role in the assassinations of John F. Kennedy and his brother Robert Kennedy — claims that remained uncorrected for four months and were repeated on other sites such as Answer.com. The New York Times writes about it here.

This is only the latest barrage of criticism aimed at the Wikipedia. Nicholas Carr made a splash a couple of months ago with an entry on his blog about the online encyclopedia and how incompetent and inaccurate many of the entries were. Wikipedia founder Jimmy Wales replied here and in this Register story. The former editor-in-chief of the Encyclopedia Britannica also took some shots at the Wikipedia in a piece written for on Tech Central Station (don’t even get me started on the whole “Adam Curry-taking-too-much-credit-for-podcasting” brouhaha).

Despite the criticisms, Steve Rubel remains convinced that the Wikipedia is “the next Google” (ironically, Steve’s post appeared the day before Mr. Siegenthaler’s piece appeared in USA Today). Rex Hammock has useful advice: “Use Wikipedia as a gateway to facts, not a source of them.” James Robertson, meanwhile, points out that “real-world” sources of information such as the New York Times, have their problems too, a point also made by Andrew Hargadon.

So is the Wikipedia fatally flawed, or does the self-correcting model of collaborative information eventually produce the best results? Jeff Jarvis of BuzzMachine says it may be flawed, but it’s also an opportunity. And Kevin Marks — who coincidentally enough is also a major player in the Adam Curry affair — has some worthwhile thoughts as well, including a quote from Douglas Adams in which he says that “what should concern us is not that we can’t take what we read on the internet on trust… but that we ever got into the dangerous habit of believing what we read in the newspapers or saw on the TV.”

Update:

CNet News has a nice roundup on the Wikipedia’s week from hell, including comments from Jimmy Wales and Adam Curry. And Steve Rubel suggests that we should be able to “claim” Wikipedia entries that are about us.

Update 2 — December 11:

An enterprising Wikipedia critic tracked down the author of the Siegenthaler entry, who turned out to be just a guy working at a courier company who was playing a prank on a friend, and chose Mr. Siegenthaler because the family was well known in his area (Nashville). Interestingly enough, the guy said he thought Wikipedia was a gag site.

Is the Web a platform, or is it just something you should use to build a platform? That’s not a Zen koan, it’s an attempt to categorize one of the discussions going on in Web 2.0-land. You might think it’s an easy one to solve, since Tim O’Reilly — one of the guys who came up with the term — says that the idea of Web 2.0 involves “the Web as platform.” In other words, the Web is an integral part of a service like Google Maps or Flickr.

Others seem to disagree, as Fred Wilson notes in a recent post. Jeremy Zawodny seems to feel that the Web is what you use to build a platform. And how do you build one? Greg Linden says Web 2.0 consists so far of “mashups” that simply throw together something like Google Maps with classified listings, his point being that if that’s all there is to your service, you are likely to get overtaken. Don Park says all the fuss over Web 2.0 is like “a party inside MacGyver’s shoebox.”

In a way, Don Park and Greg Linden have a point — if this new revolution (or evolution) is just about cool Ajax sites and neat mashups using Google Maps and [fill in the blank], it’s hard to see it having any lasting effect. What makes things like Flickr.com different? Not the platform, and not the Ajax, but the interaction — the community. And finding ways to enhance it, like RSS and open APIs and so on.

Fred points to a perceptive essay by Paul Graham, and says the main point is “the Web is a platform and you must build on top of it and you must be open and you must not try to lock people in. If you do, you are eventually going to regret it.” Words to live by.

Anyone who spends any time with blogs and the Web winds up with hundreds of RSS feeds and sites they want to check — and yet there are always more, not to mention regular news sites. How best to filter all that? Sure, we could all just go to tech.memeorandum.com and leave it at that, but if you’re like me you just wind up subscribing to even more feeds and it compounds the problem.

Readers like Bloglines.com, NetNewsWire and NewsGator.com help, but even they can’t do it all. My colleague Mark Evans mentions Inform.com, which had a rather ignominious launch awhile back but seems to have ironed most of the bugs out. I like the ability to sort through news based on themes (they call it a “discovery path”), and to track those through other sources, but the interface seems a little on the complicated side, and I wonder if that will hold it back.

I’ve come across a couple of other attempts at solving the problem, and both are kind of interesting: Gritwire.com uses a desktop-style Flash interface and has some nice elements to it (although I’ve just started playing around with it — I think I came across it in Steve Rubel’s links one day) and Common Times goes at it a different way: it looks like a newspaper, but the articles are arranged based on a kind of del.icio.us-style social bookmarking process. It makes good use of Ajax and tags too. If you’ve tried either one, or know of any others along the same lines, drop me a note.

I don’t want to jump on the Skype-skepticism train that’s been going around, but Russell Shaw over at ZDNet — who writes a blog about VOIP — points to a story from TheStreet.com that suggests the eBay-Skype marriage could be less rosy than either company hoped it would be (or should be, for $4.1-billion). According to the story by Jonathan Berr, a group of eBay’s power sellers say they don’t have any real interest in using Skype to contact or be contacted by prospective buyers.

The group of about 900 sellers, who are members of the Professional eBay Sellers Alliance, don’t see the VOIP service as a compelling feature, according to the group’s executive director. “Skype doesn’t give me a capability that I already don’t have,” Jonathan Garriss told TheStreet. “It’s not something that is going to change the way that the eBay sellers in our group are going to run the business.” That might come as a bit of a shock to eBay CEO Meg Whitman, who has been selling the benefits of the merger of Internet telephony and eBay’s auction service. It might also come as a shock to some of those who have been defending the massive acquisition based on the idea that sellers will adopt Skype.

Russell points out that PESA isn’t just a group of malcontents, but one that “collectively accounts for a cumulative annual total of more than 70 million eBay transactions and $1 billion in transaction volume.”

Update:

Andy Abramson has some info about another Skype problem: the “Borg-like eBayization” of the company, which could be draining away some of the management style that accounted for the company’s early success. This is a phenomenon that my friend and fellow tech-blogger Mark Evans has also mentioned.

What is it with telecom executives lately — did they all get together at a meeting and decide that they were going to take over the Internet? It’s starting to feel that way. First it was Ed Whitacre, CEO of what used to be SBC Communications (now AT&T); he said in an interview with BusinessWeek that companies like Google, Microsoft and Vonage would have to pay up to use his network: “What they would like to do is use my pipes free, but I ain’t going to let them do that… why should they be allowed to use my pipes?”

Now we have similar comments from Bill Smith, chief technology officer for BellSouth, who told the Washington Post that his company should be able to make some websites work faster than others, in return for payments from companies such as Yahoo. In other words, your GTalk might not work quite as fast as MSN’s VOIP service because Microsoft decided to pay BellSouth whatever they were asking to prioritize their packets. “If I go to the airport, I can buy a coach standby ticket or a first-class ticket,” Smith said. “In the shipping business, I can get two-day air or six-day ground.”

Good Morning Silicon Valley has a good headline on their post about Smith’s proposal: “Interesting approach, Bill; why don’t you try it on your phone network first?” How would BellSouth’s phone customers feel if they knew someone else was paying more so that their phone call was getting through faster or was better quality? More to the point, how would the government feel? Carl Howe of Blackfriars has it right when he says BellSouth has joined the “Internet payola club.”