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March 23, 2006

Yahoo Messenger Takes on Skype

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Posted by Dave Evans

As I just mentioned, Lavalife has integrated Skype with their dating platform. Now we have Yahoo launching serious competition for Skype, which brings up a question that is bogging down hundreds of business plans, how to decide which VOIP-enabled messenger client to integrate with your existing site, product or next big thing?

Bill Campbell at Skype Journal take talks about the new voice engine in Yahoo messenger.

To which I say:

Yahoo adding VOIP to it's existing messaging client is huge. I agree it may not take people from Skype, but in the grand scheme of things Yahoo's 30+ million existing chat clients are a serious threat. Let's be clear, nobody cares about GIPS except people who read blogs like this. Consumers like upgrading an existing piece of software that they know and trust over a new option. A few nails in the Skype coffin perhaps, some suggest that perhaps Skype would do to stick with the International market and Ebay and leave the bloody VOIP wars to scrappy startups with better product releases and consistent updates. Competitors will certainly innovate much faster during the important first-mover advantage battle.

Phil Wolf talks about the lack of customization of the Skype client. Phil's killer quote:

There's more value in activating users as producers than in tapping them as a market. Once you start with Skype customization it's only a short leap to other forms of commerce, collaboration, and community of the type you associate with the blogosphere and wikis. The power is at the edge, and the value is in helping the edge do its thing.

This is another aspect where Yahoo really gets it, their avatars may be more cartoony than Skype's but they have taken baby steps toward branding avatar t-shirts, audibles and backgrounds, something Skype is just starting to think about. This is the kind of stuff that consumers love. Sure I'm chatting cheaply or for free, but what else can I do?

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