Skype VP unfolds post-eBay roadmap

Yesterday, I blogged about the official release of Skype for Windows 1.4, an upgrade that lets callers forward incoming Skype calls to another Skype account for free and forward calls to as many as three landline or mobile numbers for as little as 2 cents a minute. The new 1.4 also makes it easier for Skype users to import contacts from Microsoft Outlook directly into their Skype buddy lists and to make one-click calls to numbers and names from Internet Explorer and Outlook.

As I also noted, Skype’s new Personalise Skype offers users the capability of using original pictures, sounds and ringtones for as little as 1 euro ($1.20).  Skype is positioning this feature as "a new and exciting market for content providers looking to deliver great applications to Skype’s global callers." Personalise Skype's initial content partners are American Greetings (think e-cards) Qpass (think micropayment authorization tech for ringtones) and WeeWorld (avatars).

I wanted to learn more - and I'm betting you do as well.

To that end, I had a fascinating conversation yesterday afternoon with Saul Klein, Skype's vice-president and chief marketing officer. Klein joined Skype in August 2005 from Europe-based online DVD Rental powerhouse Video Island, which he founded and where he served as CEO. Klein has also served as Group Program Manager for Web Platform Services at Microsoft, where he managed the strategy, service definition and roll-out for Microsoft Passport.

I spoke with Klein not only about Skype For Windows 1.4, but about everything from the VoIP competitive landscape as Skype sees it - to eBay integration and third-party feature development initiatives now under way and planned.

This interview is edited for clarity.

RS: Saul, Skype For Windows 1.4 is - at least as its numerical branding would indicate- more of an incremental rather than a transformational upgrade. So if I am a Skype for Windows 1.3 user, why would I want to upgrade?

SK: Of 4,700 users (of Skype, as well as AOL, Yahoo! and MSN) in the U.S., Brazil, China, Poland and the U.K. that were surveyed for us by Lightspeed Research, we found that 73% would be interested in call forwarding. Now, all of a sudden, they will have this feature that allows you to move beyond the desktop and receive Skype calls on your landline and cell phone. That would be a great reason to upgrade to 1.4.

Also, with Personalise Skype, you can express yourself with sound, pictures and avatars. That is more important among some demographics. This is a particularly requested feature among the 18 to 34 age group, and also is extremely popular in Asian markets, including China, Japan and Korea.

The other important thing about 1.4 is that it is the easiest and simplest version of Skype to use. We have done a lot of work on the usability side- particularly the installation and getting started process. We had found that one of the barriers that have to be overcome using communications products are that it was simple and easy to use, and to find other people to communicate with. It is important for us to keep improving that start up experience by walking you through it from everything from installation, to importing contacts from your address book to your first call.

RS: Some of the personalization, call forwarding and contact management features introduced and enhanced in Skype 1.4 for Windows are starting to resemble features offered by VoIP services such as Vonage, Packet 8- and even those VoIP services offered by "traditional" U.S.-based carriers such as Verizon?

SK: We see ourselves as a very, very different business from the likes of Vonage. Skype is a software company. We, by no means are seeking to be a replacement to traditional landline telephony. We are trying to do something very different by offering people communications with cool and interesting features independent of the device, operating system or network.

We also see ourselves as a communications platform open to third-party providers, and we very much follow that notion by which Skype can be and will become a platform by which third-party content providers in partnership with us can deliver third-party or content services.

RS: Obviously, cell phone providers have found that ringtone sales have and are a very substantial revenue stream for them. Anything about cell service provider smashing success with ring tones that informs your ringtone initiatives - such as partnership with Qpass to enable ringtone sales?

SK: The (popularity of) ring tones is certainly interesting. That's a $5.6 billion (annual market), but ring tones are just one piece of it. For us it is about enabling third-parties. And that has grown in the last month, with some 1,000 third-party developers now taking part in our Developer's program.

RS: What is your general strategy for making Skype more accessible to mobile users?

SK: A big thing for us is to move beyond the desktop to add to mobility of the Skype experience. Call forwarding is a move forward toward that added mobility. As cost-effective Wi-Fi, our Skype Zones partnership with Boingo is part of that. There is a version of Skype available for the Pocket PC platform, and we will be making upgrades to that software. We expect to support other platforms as well.

RS: As you enhance your mobile Skype offerings, do you see a natural competition emerging with cellphone providers who might feel competitively threatened by your lower calling rates?

SK: In terms of working with cellphone operators, we already work with Hutchison Telecom in Hong Kong, and we have announced a relationship with ePlus.

RS: Would you ever consider working with an OEM to make a Skype-branded mobile handset?

SK: It is hard to conjecture around that. We see ourselves as a software company, working with (mobile) hardware.

RS: As Skype goes under the eBay corporate umbrella, do you see any Skype features emerging that would be reflective of that?

SK: Well, one of the new 1.4 features that is particularly cool is that we have revamped Skype Me buttons that are available from the Share Skype Weblog. We see great opportunities- but not just with eBay sites and Web services to get Skype Me buttons, and for users to add (Skype members from eBay) to their contact list.

As to the eBay deal, it was very important to us and eBay that Skype remains a standalone business. Within weeks, we will be doing did a major product release in that regard - but one that will be along with other soon to come will be indicative that to Skype it is business as usual.

How added features will work in eBay properties will become more apparent over time. Really, though, all of this is about how eBay can help accelerate Skype's vision. eBay has a very large Web community, one which can (benefit from) adding very exciting Skype functionality such as getting the Skype Me presence (capability).

RS: Do you envision an eBay logo, icon, link, or other marker inside future versions of the Skype UI?

SK: There are no plans for that currently. One thing that eBay has been very clear about is how they really value the Skype brand and Skype experience. What they want is for Skype to keep growing and to help Skype move faster in North America - an area where compared to Europe and Asia Skype has been traditionally underrepresented.

RS: What do you make of all the Instant Messaging players such as AOL, Yahoo!, MSN and Google Talk expanding their IM functionalities from proprietary IM, PC-to-PC communications into more of a SkypeOut-type model capable of fee-based PC-to-PSTN (Public Switched Telephone Network) communications?

SK: The global telephony space is a trillion-dollar voice industry. There was no way the major players in the Internet space were not going to become interested. In the last two years, Skype has shown that while email is a killer app, and IM is a killer app, there's nothing like voice. What Skype has now is a two-year-plus lead on these other folks.

RS: In what way does that experience give you an advantage?

SK: That experience is important in terms of when you want to seal deals and form relationships. Issues such as interconnecting with PSTN networks and working to obtain local numbers - well, none of them are easy issues. These are all things we have already done, first and fast. We are continuing to innovate, (largely) because we are totally focused on Internet communications. All these other guys have other fish to fry.

RS: What do you think of the SIPPhone model and their Gizmo Project initiative?

SK: As a startup they have a different model, but as with most businesses, it is about scale and adoption. I feel comfortable with where we're at in terms of scale and adoption. Voice is now at the very center of the Internet, and we think we need to continue to move fast and listen to our customers.

RS: Do you have any designs on the enterprise VoIP space- the QoS-centric model where firms such as Cisco and Avaya have made such a prominent impact?

SK: If you have visited our website, you may have seen that we've very quietly put out a little beta of Skype Groups. This can be used by businesses to parcel out Skype credits or to (assign) Skype PIN numbers to colleagues. We have always known that a lot of people use Skype for business and pleasure, so we think (Skype Groups) is an offering with some potential as a customer-driven solution.

RS: But what about QoS enterprise PBX integration?

SK: In terms of QoS PBX integration, that is the advantage of having a really strong developer program and a solid state of APIs (Application Program Interfaces). Those developers can work with people in the enterprise- and with the Ciscos and Avayas. We, however are very focused on what we do well - a simple piece of software. But we are always open to work with other partners.

RS: Any thoughts on the FCC's mandate that VoIP work with E-911 services?

SK: We have groups within Skype that are very active in understanding that area. We're working with the FCC to help them understand our position that Skype really isn't a telephony replacement. Again, those issues are much larger than any single company.

RS: OK, understood. Now, let us get back to the Skype feature set. Can you talk a bit more about your vision for Personalised Skype going forward?

SK: What we have done with Personalized Skype is build a platform by which any third-party content provider can provide (features) such as avatars, sound or ring tones. We also see a time where Skype users will be able to upload any of their own images to use as avatars. We haven't even scratched the surface of the potential of these applications. The personalization capabilities of Skype are at the very, very beginning. It is kind of like the movies before talkies. There are 50 million Skype users, and more varied content providers.

RS: What about further plans for the Skype Toolbar feature you have added for Internet Explorer and Microsoft Outlook?

SK: Well, let's say you search on Google for pizza stores, in Portland, Oregon. Up comes a search result, and on that page, you can add them as a contact or call them with one click. Plus, if you send me an email, and you have Skype Me (or any other phone number) included in your sig. file, you can enable (your recipients) to call you with one click. 

RS: What are your plans for enabling development of third-party presence applications?

SK: We've announced that we've opened up an API for Web presence- integrating Skype into an understanding of presence functioning. We have huge rush of developer interest, which we'll be talking more about in two to three weeks.

RS: Any hints?

SK: We have had people work with us (from) enterprise applications, from the world of game apps, from social networking sites, from CRM applications. We've been able to work into integrating those applications (into Skype). And now, with our Developer Advisory Council, we are working with 15 or 20 key third party developers to get insights into their (feature development) road maps. All this makes us a much more mature business in terms of thinking through where we are all going down the line.