Three Competitors Threaten Skype With A Smackdown: Analysis - InformationWeek

InformationWeek is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them.Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

IoT
IoT
Infrastructure

Three Competitors Threaten Skype With A Smackdown: Analysis

Skype's once-rosy future is now looking less sure. Europe-based Jajah is a particularly intriguing entrant.

Yahoo's VoIP Entry

Yahoo is entering VoIP through its popular instant messaging program, Yahoo Messenger. It has been available in several countries outside the U.S. since December. Its "Phone Out" PC-to-landline rates are comparable to Skype's, at approximately two cents per call for the top 30 national phone markets. Rates are higher for other phone markets. The service's "Phone In" rates let people receive calls on their PCs from landlines and mobile phones for $2.99 a month.

What does Skype have to fear from Yahoo? An installed base of people with Yahoo Instant Messenger. Anyone with Yahoo Messenger can use the VoIP feature, and they may be reluctant to download another client -- Skype -- to give them what their instant messaging software already has.

In addition, Yahoo uses the Global IP Sound codec, which Skype also uses. Skype became popular at least in part because that codec gives it great sound popularity. But with Yahoo using the same codec, that's no longer an advantage for Skype.

Finally, Yahoo has bundles of cash and an internationally known brand that extends well beyond communications, and it'll be tough for Skype to contend with that.

Remember Lycos?

There was a time when Lycos was one of the biggest search engines and directories on the Internet. Today it's an also-ran. But that hasn't stopped it from entering the VoIP market with Lycos Phone, which like Skype and Yahoo's program, allows for free PC-to-PC calls. So how will Lycos differentiate itself? With a bundle of freebies. Users get free incoming calls from landline and mobile phones, 100 free minutes of PC-to-landline calls, and free fax and voicemail services. For those who care about such things, there will be movie trailers and music videos as well.

Will this everything-but-the-kitchen sink approach work? It's hard to know. For now, people appear to be looking for one primary thing from VoIP -- cheap phone calls. All the movie trailers in the world won't help. The free services will help, but in exchange for those, people will have to put up with banner ads, and that annoyance may be sufficient to chase people away.

The Bottom Line

For now, none of the new Skype competitors have enough of an installed voice base to threaten Skype, which is particularly strong outside of the U.S. And Skype's parent, eBay, certainly has enough marketing muscle so that it's in VoIP for the long haul. So the competitors, at the moment, are also-rans. Their release, more than anything, confirms that Skype's P2P approach to VoIP was on target.

We welcome your comments on this topic on our social media channels, or [contact us directly] with questions about the site.
Previous
2 of 2
Next
Comment  | 
Print  | 
More Insights
InformationWeek Is Getting an Upgrade!

Find out more about our plans to improve the look, functionality, and performance of the InformationWeek site in the coming months.

News
Becoming a Self-Taught Cybersecurity Pro
Jessica Davis, Senior Editor, Enterprise Apps,  6/9/2021
News
Ancestry's DevOps Strategy to Control Its CI/CD Pipeline
Joao-Pierre S. Ruth, Senior Writer,  6/4/2021
Slideshows
IT Leadership: 10 Ways to Unleash Enterprise Innovation
Lisa Morgan, Freelance Writer,  6/8/2021
White Papers
Register for InformationWeek Newsletters
2021 State of ITOps and SecOps Report
2021 State of ITOps and SecOps Report
This new report from InformationWeek explores what we've learned over the past year, critical trends around ITOps and SecOps, and where leaders are focusing their time and efforts to support a growing digital economy. Download it today!
Video
Current Issue
Planning Your Digital Transformation Roadmap
Download this report to learn about the latest technologies and best practices or ensuring a successful transition from outdated business transformation tactics.
Slideshows
Flash Poll