Chris' main points are that the telco "vested interests" are scared, Skype has VC funding, Skype has energized the equipment vendor community, Skype enjoys great distirbution, and consumers love "free."
Let's take each point, one by one:
Telco vested interests are scared- You're a telcom CEO, whose main purpose in life is to please institutional investors by increasing shareholder value. So, as The Motley Fool's Bill Mann wrote today, you see "upstart companies" like 8x8 and deltathree "gnawing on (your) long distance cash cow." So, you strike back in any way you can - through the legislative, judicial and regulatory process, through marketing, through the press. Yes, when your competitors fear you, then you should have two reactions. You feel the ego-stroke of validation, but you gotta watch your back by offering better services then they do, at lower prices if you must.
Skype has VC funding- Yes, they did receive $19 million in fundingthis year. Nice chunk of change, but not transformative. I've worked for software and UI plays that squirted away more. Still, can they husband their cash? I do sense a willingness in the VC market to put more in, so I lean toward looking at their funding situation as moderately positive.
Skype has energized the equipment vendor community- The validation scale here is moderate at best. Are the equipment vendors hedging their bets by dancing with everyone, hoping that they will be in a preferred partnership position if something sticks? Things are already in play: go to this page on the Siemens site where an article entitled "VoIP-A New Eera In Telephony" is posted. Click on the Skype icon and watch your browser's address bar closely.In the blink of an eye, you see aSiemens URL that quickly sends you to the Skype home page. Smells like affiliate marketing spirit.Yet like what happened by the lake that summer, there's no stopping non-exclusivehooking up. Since I've seen this dynamic play out before, I remain hesitant.
Skype enjoys great distribution- Chris' main point is the sheer mass of the 170 million-user Kazaa distribution channel. To me, the fact of Skype being bundled in with Kazaa 3.0elicits a, well, OK, "moral values" perspective. Most everyone uses Kazaa to obtain free music,most of which is copyrighted. So, Skype-within-Kazaais riding on the back of a platformemployed by a numberof itsusersto obtain content they would probably have to otherwise pay for. And with regard to the legality of the Kazaa utility that is being touted as a major shot in the arm for more widespread distribution? Well, the U.S. Supreme Court may well have something to say about that. And remember what I wrote about the 2,509 spyware objects that came to my PC when I downloaded and installed Kazaa 3.0 with Skype?
Consumers love "free"- Well, considering how often we are nickel-and-dimed to death every day as consumers, perhaps we can't be blamed. I look at my phone bills and see all the fees, and Skype (the pure version, not the Kazaa flavor) - looks better tome all the time.