Skype Making B2B Push

VoIP alternatives to traditional carriers are finally starting to gain traction in the home and in mobile. The AT&T decision to allow VoIP apps to run on its 3G network a couple of weeks ago is something of a breakthrough, although as a practical matter it’s really only about international calling at this point. If there were data-only plans it would be a different matter.

But today I got the following email in my inbox, pushing Skype as a business service with a range of use cases:

Skype’s push to become a call-tracking and/or performance based ad platform for online is also very interesting (see, European Directories). For quite some time innovation at Skype languished under eBay’s lazy eyes. Now that the company is about to separate from the mothership Skype is becoming a much more interesting company — and more viable as a carrier substitute.

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Skype & YP for Click-to-Call and SEO?

Kelsey’s Mike Boland wrote an article for Search Engine Watch, published yesterday, about how a soon-to-be-independent Skype and the YP industry might work together to drive value for both. (Skype has a local directory, SkypeFind, that isn’t very widely used.). I was going to write this post yesterday but didn’t have time. Intrigued by the ideas in the SEW post, TechCrunch picked it up, which prompts me to write it today.

A version of this strategy has been gestating for at least a couple of years. It’s also worth nothing that AgendiZe does a similar but more complete version of extending the value of directory links in several ways.

According to Mike, there are some new trials going on between Skype and a couple of YP publishers. Let’s take a look at the idea and put some additional context around it.

For those who’ve installed it, a Skype browser plug-in converts all recognized phone numbers (anywhere they may appear online) into SkypeOut links. Essentially it turns all the numbers on the screen into links that can be potentially clicked and called (via Skype). Here’s an example of what it looks like from a previous post in 2007:

Once you click this screen appears to initiate the call:

Palore, in its early consumer days, was linking phone numbers too. Palore also enabled branding on the organic side of search with the Palore plug-in, which in some ways is more intriguing than simply turning phone numbers into links. Google and Yahoo are themselves experimenting now with allowing branding in search or paid search results.

Back to the Skype-YP idea . . .

The first suggestion in the article is that publishers would work with Skype — who would buy SkypeOut VoIP minutes — and click-enable advertisers’ phone numbers across the board or perhaps in selected high-value categories. Calls coming through those linked phone numbers would be “attributed” to the YP publisher in some fashion. That idea is discussed primarily in the context of advertiser retention in the article. That makes sense because I see a fairly major potential problem: these are not call-tracking numbers, the phone number is the SMB’s and arguably the publisher isn’t adding any value — the user was calling anyway.

The more provocative idea Mike discusses is how using Skype might effectively be an SEO strategy because it would link numbers in the Google 10 pack, which often push organic directory links down the page. Here’s the screenshot Mike created:

And now for the most important part of Mike’s discussion:

Though he can’t yet discuss specifics, [Skype product manager and former Sensis employee Nick] Corr tells me there is a clear increase in calls to businesses they’ve marked as free for users.

If SkypeOut links do in fact drive more calls then there’s the “value add” I was talking about above. By analogy, Google’s Checkout logo next to AdWords ads has driven more CTRs for some of those advertisers. That’s one reason the company is testing favicons in AdWords.

Now for some historical perspective. Google and Microsoft both offered click-to-call for local results in Maps and Live Search more than two years ago. This is what Google said in late 2006 when it introduced the free call connection feature:

Here’s how it works: Search for a business, like a hardware store, on Google Maps, and click the ‘call’ link next to its phone number. Then, enter your phone number and click ‘Connect For free.’ Google calls your phone number and automatically connects you to the hardware store.

Here’s what it originally looked like in Google Maps:

Google and Microsoft both discontinued using the feature in their respective directories. Google stopped using it less than 9 months after the test began. Though Google never directly answered my question “why,” one must infer that there wasn’t enough perceived value to justify the expense. Here’s what eStara’s Jon Federman said in response to my post and conjecture, at the time, about the rationale behind Google’s decision to stop using click-to-call:

A study eStara conducted last year of consumers using national IYP services found that 84 percent were more likely to call listings displaying a click to call button versus those that do not. This makes it an ideal up-sell feature for premium listings (as is still the case with Superpages.com). But that doesn’t mean it’s just a “nice to have” capability.

Obviously, just from looking at the user responses on Google Groups, one can see that there’s value to click to call beyond it just being a “cool” feature. Since we were not working with them, we can’t speak to Google’s rationale for ending their own click to call experiment, but we can speak to our experience working with hundreds of enterprises around the globe that use click to call and are seeing tremendous results.

Stepping back, this is essentially what the Skype proposal is: click-to-call with an SEO twist. Notwitstanding Federman’s comments, there has always been a debate about the efficacy of click to call on the PC (mobile is a very different story because the device is a phone). I have been told privately by publishers and vendors that click-to-call drives incremental volume but most people don’t use it. The Skype plan faces the additional hurdle that it requires users to install Skype and a plug in, although Skype has a very large installed base already.

As a pure click-to-call strategy it’s likely to have limited success. As a stealth SEO strategy and way to get into the Google 10 pack it’s more conceptually provocative. On the latter point, however, one might ask which publisher gets to “claim” the local phone numbers? In the US, there are multiple competing publishers with national reach. In other coutries with a single “yellow pages” publisher that problem doesn’t exist to the same degree. That’s why, presumably, the test is going on in Europe and New Zealand.

As I mentioned earlier, there are “political” and potential ethical issues in linking phone numbers that users were probably already going to call and taking credit for those calls. If the icons boost call rates on the other hand (which can be proven with A/B testing) then it’s a different case.

It’s also worth noting that eBay’s plans for click-to-call and even PPCall using Skype for sellers and local merchants never really materialized. There was also a much publicized deal between eBay and Google, including click-to-call that never really turned into much.

All this is to say that Skype might have a good deal more success if it focused on developing SkypeFind as a social directory (within the Skype community), using YP publisher partners in each country to monetize lookups.

Google Voice Not a Skype Killer — Yet

Early on I had a GrandCentral account but let it lapse. After the announcement of Google Voice yesterday I got back in. But it’s not exactly what I expected.

There are lots of nice call management features and the SMS integration is great. I had thought however that it might be a complete substitute for VoIP calling services like Skype or even Vonage. It’s not — at least right now. It’s not a telco substitute. (Perhaps if Google Talk is later integrated.) 

I can turn my iPod Touch into a phone with Truphone and a WiFi connection. That’s been useful in several situations, though it sounds like my head is in a fishbowl. Google Voice offers free domestic calling and inexpensive international calls. But what it does is connect calls to an existing phone number:

One must have an operating landline or mobile phone to use the service. Google Talk or Skype or other IM clients allow  you to make calls (usually with video) directly from the client. Skype and Truphone will also allow this on mobile handsets. Google Talk,  however, only allows calls within the network at the moment. 

If you use Google Voice with a mobile phone you’re still using minutes. Since most people have included long distance this doesn’t represent any savings. With a landline, you could in theory ditch your long distance service and make all those calls through Google Voice, connecting them to your local number (it’s similar to Jaxtr in that respect). International calling is where the value of this part of the service kicks in. Calling rates are quite inexpensive. I haven’t compared them to Skype however. 

I suspect that Google Talk will become integrated into Google Voice at some point so you’ll be able to make calls directly from the service. For now, however, this doesn’t threaten any of the incumbent telco or even VoIP services.

What if Google Bought Earthlink?

Some time ago it occurred to me that Google might buy an ISP. It made sense to me then as a potential channel to small businesses. But now it makes even more sense from a variety of perspectives.

Let’s step back for a minute. Google has recently been pushing to open up Internet access and build direct ISP-like relationships with consumers:

• WiMax (with Sprint)
• Wireless spectrum
• White space broadcast spectrum
• Muni Wifi (to a much lesser degree)

All these efforts can be seen as Google’s attempt to ensure its relationship with consumers isn’t disrupted and/or that it becomes even more ubiquitous.

So what if Google were to buy Earthlink? Its market cap is a modest $800 million and change, it has strong cash flow and a range of valuable capabilities and assets (like 50% of MVNO Helio). However, its new growth initiatives (e.g., VoIP and muni Wifi) have not met expectations to date.

What would Earthlink bring at a relatively modest price:

• A big pool of consumers and small business customers (think alternative sales channel)
• A wireless carrier in Helio
• A telco business (VoIP), which Google is heading toward becoming anyway (think more services to enterprises)
• A ISP business with national reach (and that would offer precise location information for ad targeting)
• Infrastructure to build out muni Wifi if that takes off

Some of the costs of these initiatives Google could subsidize with its other revenues and it wouldn’t be under the same pressure as Earthlink is as a stand-alone company. But it could also be a profitable business unit that would help Google achieve some of its objectives on a now wide range of fronts.

Grokking Google and GrandCentral

Google confirmed that it had acquired telephony management platform GrandCentral today. Here’s my previous post from when the rumor surfaced. Expect integration with Google Talk and Gmail later. Perhaps this is also a full-blown challenger to IP telephony platforms such as Skype. There’s also a likely enterprise dimension to this.

I’m sure Google has a short and longer-term vision for the product. And I’m sure there are some hypothetical advertising dimensions to the longer term vision. There’s already click-to-call for local advertisers and, to date, Google has failed to date to truly roll out PPCall. But imagine this potential scenario:

A local realtor or car salesperson uses GrandCentral to ensure that her phone rings — all her phones ring — when a prospect or would-be buyer calls. The only catch: if the service is free how would Google monetize it? Premium services? Maybe.

There’s potential audio advertising: users call in to listen to messages and hear “relevant” ads (analogous to Gmail today). That might be quite annoying and discourage adoption and usage. Then there’s the simple serving of ads around the margins of the pages; but that could well be met with “banner blindness” or its text equivalent.

My guess is that Google saw a telephony platform like this as strategic in the sense that it creates more convenience, value and loyalty among users. It helps reinforce Google’s brand and usage generally.

There’s also the chance that Google will develop a Jaxtr-like application for social networks and third party sites as well. There are many possibilities, which is probably why Google bought GrandCentral, and we’ll have to see how the company develops the product.

Google-eBay: Post #3

I was talking to a reporter and it made me think I have to post again. There’s another aspect of this that I didn’t talk about before, which is paradoxical. Google and eBay are coming together to “accelerate” the adoption of PPCall by sharing their infrastructure and potentially distribution (my speculation).

But they are requiring people to have either Google Talk or Skype on their PCs to initiate calls. When Google did its “click to call” precursor-to-PPCall test last year it used VoIP, Inc. as a partner. What users saw was a phone icon that opened a field where users could enter their phone numbers and initiate a call — no software downloads needed.

Most Americans, where this is rolling out initially, don’t have Skype or Google Talk. Skype claims 100 million users (read downloads) globally — most of whom are outside the U.S.; and Google Talk lags quite far behind AOL, Yahoo! and MSN in terms of IM client (with voice) adoption.

So eBay and Google must see this also as a way to generate adoption of Skype and Google Talk. I can understand eBay trying to leverage and promote its Skype acquisition/asset. But if they want to accelerate the adoption of Click to Call (as the basis here of PPCall), why are they throwing up barriers to its use on the consumer side by requiring a software download?

eBay-Google Deal: More PPCall Clarity

The WSJ and NY Times articles were a little vague on details re the implementation of the eBay and Google deal. I reached out to Google and Skype and just got off the phone with Skype. Here’s more information:

• The Google-eBay AdSense deal is international. Click to Call/PPCall is US only for now.
• This is a much more significant deal than I realized because this IS Google’s entry into PPCall in the US. It will be tested sooner but roll out mid 2007. After that it will likely roll out internationally at some point.
• People with Google Talk or Skype software installed on their computers will have the option to use either system (on either platform) to initiate calls. The statement was that both companies were opening up their marketplaces to both voice clients. While it’s not entirely clear yet what happens if I have both (as I do), presumably users can specify a default system for further calls. If neither system is installed Google or eBay may promote a software download. (That scenario is tbd.)
• I asked: “Why does Skype need Google?” I was told that this deal was to bring complementary strengths to the table to help accelarate the adoption of PPCall. Google has search volume and advertisers; Skype has much more distribution/adoption of VoIP than Google Talk. Again, users will be able to use Skype on Google results pages.
• There has been no decision yet (officially) on whether eBay PPCall advertisers will get distribution on Google and Google advertisers on eBay. Assume probably yes.
• I asked about Yahoo! Skype said that part of the US Yahoo! partnership involves click to call/PPCall and that Skype intends to continue with that relationship. Speculating, I would imagine that a similar, more specific PPCall deal will be announced with Yahoo! at some point.
• Free “Skype me” buttons/integration will still be available to eBay sellers. PPCall is about offline transactions from Skype’s point of view

So now that I know more, what about all this?

• This is Google’s US PPCall entry (though it may not be limited to this). It potentially “mainstreams” PPCall for online advertisers
• It does leverage Skype’s distribution (as well as Google’s potentially) for eBay. It doesn’t appear to be a statement of “weakness” about Skype.
• An interesting scenario is one where Skype becomes a search platform that serves up PPCall advertisers from eBay, Google and potentially other partners. So it’s Skype as a local search directory/engine.

I’m sure I’ll think of more later.

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Here’s the eBay press release.

TWX/AOL Results

If you’re interested to get the details, here’s Yahoo! Finance. You can also read the WSJ (sub req’d) article and David Jackson’s highlights at the Internet Stock Blog/Seeking Alpha. In addition, AOL also formally announced that it would give away email accounts, a free phone number and other services (as has been widely known):

The AOL transition is set to be completed in early September, and the services to be offered for free include e-mail, instant messaging, a local phone number with unlimited incoming calls as well as safety and security features.

According to the WSJ:

After peaking at 26.7 million U.S. subscribers in September 2002, AOL’s subscription base dropped 30% to 18.6 million in March.

The free strategy will likely accelerate the process of subscriber losses. More from the Journal:

Internal company forecasts made public in July indicate Time Warner expects the AOL unit to lose nearly $1 billion of operating profit through 2009 under the plan to offer the online service free. But the company is forecasting that growth in Internet ad revenue will partially offset the expected decline in subscription revenue and ultimately leave the company more profitable.

My view is that AOL has a huge consumer and advertiser opportunity with video given its TimeWarner ownership, its Truveo/SingingFish assets and access to premium content.

There’s also a potential VoIP opportunity with the free “inbound” phone number/VM. If that’s well promoted and easy to use it might help drive later adoption of AOL Total Talk. (Here’s a piece in the NY Times about Verizon and Qwest losing residential landline customers to VoIP.)
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Related: Loren Baker covers how YouTube is apparently more “sticky” than MySpace. Here’s the original story that appeared in The Guardian.

Nokia ‘Internet Tablet’ Now a Phone (for the Second Time)

From GigaOM: A second company has enabled the Noika 770 “Internet tablet” to be used as a phone where there’s a WiFi connection, SIPphone. Google is the other one.

A related story from the NY Times (reg. req’d) covers the upgraded T-mobile “sidekick” (a device very similar to the 770, except it’s designed as a phone in the first place). The article also covers the attitudes of young people toward mobile and a range of new services and devices.

From the Times article:

Nik Lulla, a high school senior in Eagleville, Pa., near Philadelphia, swaps out his cellphones on a whim. He carries a Motorola Razr, an ultrathin metal phone that is so popular he considers it almost passé, and a T-Mobile Sidekick 2, a minicomputer with instant messaging and e-mail features. Sometimes he throws a Motorola V551 and a Nokia 3120 into the mix.

While this kid is obviously “over the top” with his many mobile devices, he’s probably not unrepresentative of his peers in terms of how involved young people are (I’m calling them “Generation Y-ireless”) with mobile.

According to Pew, 50% of teens have mobile phones and 50% would rather have TV taken away than their mobile phone privileges revoked.

AT&T to Consumers: Don’t Sue Us, You Have No Privacy

Nice.

AT&T has been hit with class action customer lawsuits (and other litigation) claiming, among other things, that by disclosing phone/Internet records to the prying and domestic spying US federal government consumer privacy was illegally violated. AT&T, seeking to insulate itself from future lawsuits and potential future testimony in front of pretending-to-be-angry senators has waived its magic wand and said, "privacy be gone."

According to Reuters:

AT&T said on Wednesday it was revising its privacy policy, explaining to customers that it owns their phone records and can hand them over to law enforcers if necessary.

The changes take effect on Friday and come at a time when AT&T and other phone companies face lawsuits claiming they aided a U.S. government domestic spying program by giving the National Security Agency call records of millions of customers without their permission.

AT&T said the updated policy was aimed at helping customers understand its practices better and does not change how it treats customer information.

I still have SBC/AT&T local phone service and I think this is the thing that will push me over the edge into VoIP. Now VoIP is even easier to tap into than PSTN lines but at least I won't be subsidizing a company that is complicit in what amounts to illegal domestic spying.

eBay: Just ‘SkypeMe’ Baby

After a long run up, and still billed as a "pilot proram," eBay is launching "SkypeMe" functionality in the US in 14 seller categories starting June 19:

• Automotive GPS devices
• Camera and photo lenses and filters
• Wired networking routers
• Skype devices
• VOIP / Internet telephony
• Diamond solitaire rings
• Real estate (residential, commercial)
• Manufacturing and metalworking
• Beds
• NBA basketball cards
• Silver coins
• Lost in Space collectibles
• Radio control toys
• Cars and trucks

Here's what the release says:

Beginning June 19, sellers will have the option to add a “Skype Me” button to their item listings when completing the “Sell your Item” form. If the Skype option is selected by the seller, a “Skype Me” button will appear in a new “Ask a seller a question” section. By clicking on the button, buyers will be able to communicate with sellers using voice, text chat or both. Buyers can use Skype to instantly request more information about a specific item and interact with the seller in real-time. This functionality will be available at no cost to users.

“Skype represents a tremendous opportunity for our sellers to connect even more closely with their buyers,” said Bill Cobb, president of eBay North America. “We believe that Skype will enhance the way that people communicate and trade on eBay, especially in high involvement and high price categories. It will be exciting to watch Skype become a part of our marketplace.”

“Skype’s integration on eBay makes it easier for buyers and sellers to communicate,” said Henry Gomez, North America general manager, Skype. “And we’ve seen that good communication is at the heart of smooth e-commerce transactions. We are looking forward to watching Skype take its first steps into the e-commerce mainstream.”

It will be interesting to see how widely this is used and whether it improves transaction rates, and in what categories. ContactAtOnce found in its trials with the auto vertical that there was 25% lift in leads from the addition of an IM icon on seller websites.

One potential barrier/friction point here is that users must download Skype. Once they do, will they start using it for calls? Recall that SkypeOut is free until the end of the year for US users. Here's some skepticism on that last point.

In general I would hypothesize, as the Bill Cobb quote above suggests, that in "high consideration" categories, we'll see the most usage. But it could turn out that this is widely used across categories. Among the 14 above, there are only two "offline" segements, Cars and Real Estate. I will also be interested to see whether those gain more usage though there's no reason to believe that this will necessarily be the case.

The premise that more communication between buyers and sellers will benefit sellers in the long run is a good assumption. If this "works" expect a wider rollout across all categories and a more rapid introduction of Skype as a true advertising vehicle in the US (pay per lead, PPCall), as has previously been promised.

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Related: NY Times article on the deal and Om Malik on Skype-PayPal integration.

Mighty Mobile Microcomputers

I wrote previously that the right "form factor" was one of the essential components of making mobile work (beyond voice) as a mainstream opportunity for everyone. Today there are two pieces (1, 2) in the NY Times (reg. req'd) that talk about small PC devices that are supremely mobile. Wi-fi enabled, they're not phones in a conventional sense. Neither is the previously announced Google-Nokia "Internet Browsing Device."

There probably won't be a single device that unlocks mainstream adoption of "the mobile Internet" but a range of vaguely similar devices that combine of PC-like functionality (or at least good web browsing) with a phone or a Wi-Fi/VoIP capability. But, interestingly, it may be these small PCs with Wi-fi for VoIP calling that wind up being more widely adopted than cellphones with Internet. It all comes down the usability of the device (and of course price).

Online video and mobile are two new battlegrounds that are or soon will be equally competitive and offer enormous opportunity. Mobile is ultimately the bigger (but more challenging) opportunity of the two — and it, of course, includes video.

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Related: The WSJ (sub. req'd) on mobile TV in Europe and the World Cup. And here's an article from CNN Money/Business2.0 about mobile DA provider 4Info and the challenges of the mobile environment for search engines and Web-based companies.

SkypeOut Goes Free in US, Canada

In an aggressive effort to build usage and adoption, eBay-owned Skype is making it's SkypeOut product free to US and Canadian users through the end of the year. Skype users can now call landlines and mobile phones free of charge. Here's the full release.

This clearly puts pressure on competitors and traditional telcos and should give the company a nice bump in usage in the US where it lags companies such as Vonage and cable companies in terms of brand awareness.

Here are some other recent posts about Skype and it's strategies beyond voice:

• Skype: Social Network with Voice
• What Exactly Is Skype?

Here's Om Malik with a range of thoughts on the announcement.

What I Didn’t Cover but Meant To

First, there's official launch of MySpace IM earlier this week. Presence (as an advertising vehicle) is becoming more important — note Skype news and AOL's AIM Pages.

The TiVo deal with Brightcove: this brings Internet video content into the living room, even as more people are watching TV on PCs. Parallel universes are developing rather than "convergence."

Also, TiVo's AdSearch is a significant development that shows how "search" is starting to become a metaphor for the new paradigm for all advertising. (Of course yellow pages and classifieds publishers have known the power of "directional media" for a long time — but nobody knows or understands that term. So "search" will replace it.)

The new YouTube mobile video upload capability

And from LostRemote: local Fox beta sites go live (Fox is going to potentially big force in Local) and a nice analysis of the potential impact of YouTube mobile.

Question: Will newspapers need to become free to compete with other media going forward? That might be one potential inference from this post.

Cable news is losing younger audiences. This article doesn't talk about to what or to whom, but you know who it is — the Internet.

What’s Really Interesting About AIM Pages

First, here's the Flickr screenshot of AOL's new AIM Pages (with more detail from PaidContent via TechCrunch). It's very nice looking and a lot cleaner than the very awkward MySpace profile formatting.

In fact, AOL had one of the first "social networks" with the AIM Buddy List but the company didn't really understand what it had. It took the rise of social networking and MySpace in particular to wake AOL up to the potential and the necessity of doing something like this.

To answer the question “why will people use this?” The central differentiator here, as many reports have mentioned, is the free phone line. Users will be able to receive free inbound phone calls together with voicemail and email/sms notification. But there's an upsell to "AIM Phoneline Unlimited" for $14.95 per month (including international calling). It's quite possible that this free inbound line with the low-priced outbound calling capability will drive meaningful adoption of VoIP in the US. However, it remains to be seen.

Lots of articles have speculated about the AOL vs. MySpace consumer dimension of AIM Pages. In a way AOL was compelled by market opportunity but also competition to do something like this. While it's the dominant IM platform, AIM's lead has slipped. And MySpace, at least for as long as it’s the “it site,” threatens to slowly siphon AIM’s youthful user base.

What I think is potentially very interesting and haven't yet seen anyone talk about is the hypothetical small business dimension of this. You've now seen me point to several articles recently about how small businesses are setting up profiles on MySpace as a free marketing tool.

AIM Pages is essentially a free hosted site/landing page and the free phone line is a tracking number. There’s also “presence management” and other features that would make this a very interesting marketing vehicle for small businesses. For example, you could essentially run a search campaign off AIM Pages and then track calls generated by that campaign – all for free (except for the paid-search part of course).

AOL could modify the template to make it a bit more “professional” and/or create a range of vertical templates customizable by industry. Voila! AOL becomes a small business Web host. Businesses could add photos and even potentially add video to these pages (if video were to be supported). Alternatively, these or other enhancements, including PPCall, could be advertising upsells.

Depending on adoption by SMEs, AOL could potentially build very rich consumer-oriented local search and directory products on top of these pages, as well as B2B groups/networks. There are a range of monetization scenarios there. AOL would also potentially become an SME channel that others might want to tap.

The problem is that most small businesses won’t immediately recognize the possibilities here; they’ll have to be educated. (I’m not completely sure that AOL recognizes the potential opportunity on this side of the equation either given how focused it is on the consumer experience.)

Notwithstanding the opportunity surrounding consumer adoption, I think there’s a real and potentially much more interesting opportunity associated with small business advertiser adoption and the products and services that can be built to support and monetize that.

What Exactly Is Skype?

I met on Thursday with Skype's operations director Michael Jackson. The briefing had been set up to discuss security issues as Skype seeks to penetrate enterprises. I quickly accepted everything they were going to tell me about encryption and network security as true and moved on to talk about the user base, the product and the roadmap.

Last week Skype announced that it had passed the 100 million users threshold. How many phone companies have 100 million users? (Okay, so they're non-paying.) Interestingly, Jackson downplayed Skype as an Internet telephony provider and emphasized an emerging suite of tools and features around voice/VoIP functionality. Part of the reason for that is that Skype sees voice dropping to near $0. We'll see. Most consumers think of VoIP as cheaper telephone service and that's why they're interested.

Traditional telcos can try to block VoIP (unless they have VoIP businesses themselves :)) or simply lower prices to compete. Bundling is another strategy to prevent defections to VoIP pure plays or cable companies that offer VoIP.

But Skype is more ambitious. The company is putting "Skype Me" buttons on eBay in Europe and can do the same for eBay's Kijiji sites around the world. That offers real-time communication between buyers and sellers and/or could also be a basis for a PPCall offering.

When I think about 100 million users who can chat, call and see (video) one another individually or in groups, I think "social network" and advertising network. In that context Skype becomes something of a different animal. Perhaps it's more accurate to say that the service has different uses for different segments: individuals, business professionals and groups. And Skype has an API. Undoubtedly there will be some very interesting applications that emerge from that.

So when looking at the big picture one can't help believe that Skype has more tricks up its sleeve than simply delivering cheaper calls to you and me.

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Related: eMarketer projected that VoIP services in the US would have 32 million subscribers by 2010. And from the recent Harris Interactive survey about consumer awareness of VoIP:

Although VoIP competition in the market is increasing and there is plenty of choice for consumers, the survey found clear leaders in awareness among those adult consumers who are aware of Internet telephony: Vonage in the United States and Skype and BT in Great Britain. The danger for Vonage and Skype though, in a broadening market, is that they have higher awareness levels amongst men than women (for Vonage, 54% of men vs. 34% of women, and for Skype, 58% of men vs. 30% of women), but the more ‘mass market’ players such as Yahoo, BT, AOL and Verizon find awareness levels equally as strong among both genders, both in Great Britain and in the United States.

The Lost VoIP Post

I'm so frustrated with WordPress at the moment. There were lots of malfunctions over the weekend and I thought I lost this entire blog for several hours.

Tonight, I just spent about 45 minutes writing up and dissecting the results of this Harris Interactive Survey on VoIP awareness and adoption in the US and the UK. When I went to save the post (to prevent it from being lost) the system just zapped it — gone, poof!

I'm too tired to recreate the whole thing. The bottom line: Vonage is the dominant brand in consumers' minds; people are interested in VoIP for the cheap or free calling but they're also ambivalent (mostly because of security and reliability concerns) and most are taking a wait and see approach to adoption.

VoIP providers have to do a better job marketing the product, despite growing awareness and could be "preempted" by incumbents who might lower their rates or bundle them with other services. Cable companies that already offer Internet access to an "installed base" of consumers are perhaps in the strongest position long term to offer product bundles that could lure them away from PSTN.

However, there are many complex dynamics — at least in the US market — tied to competition between telcos and cable companies around TV, Internet and phone (and wireless) that will affect how slowly or quickly VoIP penetrates.

My interest in VoIP is tied to the things it might enable in terms of new ad and online consumer products (e.g., VoIP on maps) and thus new ways for consumers and merchants to connect — online and off.

Amazon Implements Click-to-Call

Amazon adopts eStara’s click-to-call functionality (written up in today’s WSJ [sub. req’d]). The article confuses “click-to-call” and “pay-per-phone-call” (one is infrastructure the other is revenue model).

eBay has begun to do the same thing in Europe with Skype.

Click-to-call facilitates buyer-seller interaction or can drive leads, which can potentially be monetized on a per call billing model (PPCall). Regardless of whether calls are individually monetized, click-to-call provides additional value through tracking of the relationship between the Internet and the ultimate offline transaction.

SkypeWeb and PPCall

eBay-owned Skype today launched “SkypeWeb”:

Skype, the global Internet communications company, today announced SkypeWeb, a Web presence feature that is already integrated into more than 50 Web sites in 20 countries around the world. SkypeWeb allows people to see Skype users’ online status and call or chat with them from any Web site as well as Skype people from each site with the simple click of a mouse.

“With just a few simple steps we were able to incorporate SkypeWeb into our AppExchange platform,” said Adam Gross, vice president, developer marketing, salesforce.com. “In addition to free Skype voice calls, the SkypeWeb presence feature gives our subscribers the ability to know when their contacts and colleagues are available and online – all directly from within Salesforce.”

SkypeWeb integrates Skype seamlessly and into any Web site. With SkypeWeb, Web administrators can easily enable all site visitors to talk for free over the Internet.

Here are the buttons.

There are potentially many things to discuss about this. One is: the rapid “mainstreaming” of VoIP. But the thing I want to focus on is the local/PPCall aspect. There’s no PPCall system in place yet (it’s VoIP click to call) but a system like SkypeWeb could become an advertising vehicle for local businesses at some point. (ContactAtOnce distributes “presence management” icons/chat windows as an advertising tool today.)

According to the Skype release, “DBA.DK the number one Danish classifieds portal, is using SkypeWeb to show the Skype status of people who have posted classified ads.”

This is the kind of functionality that eBay promoted when it bought Skype to enable communication between buyers and sellers. But as the classifieds forum I moderated last night made clear, calls are much more important to local sellers than to ecommerce vendors. Thus the local business implications of click to call (and the potential business model layer of PPCall on top of that) are immediate.

Microsoft suggested integration of VoIP as a layer on top of its Windows Live Local product when Live was launched last year in San Francisco.

It could well be that every Web site or landing/profile page associated with every local business will one day have such functionality. It could be free, subscription based or performance-based (PPCall).

Google Click to Call (PPCall?)

Here’s a SJ Mercury piece on Google’s “Click to Call” initiative. According to the article, the company is working with Florida-based VoIP, Inc.

Click to call is not PPCall. There are many companies using click to call, which is about connecting calls between individuals and merchants. PPCall is a business model that can be built upon click to call. It seems, however, pretty certain that Google’s rollout of PPCall is imminent.

Once that happens, or maybe before, we’ll see Yahoo! go live with PPCall and later MSN. Here’s a list of average PPCall prices (from several providers) in several top YP categories:

• Florists ($2.50)
• Lawyers ($10-$30)
• Towing ($8.00)
• Carpet Cleaning ($8.00)
• Travel ($8.00)
• Dentists ($5.00)
• Mortgage ($35.00)
• Cosmetic Surgery ($20.00)
• Auto Glass ($15.00)

The average click price at the national level at the end of 2005 was $1.43 according to Fathom Online’s keyword price index.

Of course this also could be about Google offering calls to consumers and thus creating another revenue stream, a la Vonage or Skype. But that’s less likely in the near term.