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i-Technology Blog: Zero-Cost Telephony, the 6-Ton Elephant in the Telco Room

GoogleTalk Has a Better Chance Than eBay to Take Over the VoIP Market

Zero-Cost Telephony, the 6-Ton Elephant in the Telco Room

It's a curious side-effect of monitoring Internet technologies 24x7x365 that one loses sight occasionally of the wood for the trees. Take eBay's $4BN acquisition of Skype, for example - an acquisition that when it was announced on September 12 caused ripples of worry Web-wide that perhaps Skype calls would one day soon cease to be free. No one need have worried. In the new Web 2.0 world toward which we're hurtling, eBay stands about as much chance of charging people to make calls on Skype as Google does of charging people to search at Google.com.

And now Meg Whitman has conceded as much. But Whitman has done more than just that. She's also thrown down the gauntlet to all-comers in the telephony industry, by proclaiming that within six years all voice calls will be free, not just Skype calls but voice calls of every kind. In other words VoIP, the ultimate disruptive technology, has changed not just the physics but also the economics of telephony. "In the end, the price that anyone can provide for voice transmission on the Net will trend toward zero," she said.

Where does this leave the traditional telcos? Ever since founding Wireless Business & Technology magazine back in 2000 [below], VoIP has been the six-ton elephant in the room, that every carrier has known is there but that they've not been willing (till now) to talk about.

With her bold prediction, Whitman is "outing" the traditional companies, but she is also forcing herself to explain to the investment community, already skeptical of the huge price-tag for Skype, just how eBay is proposing to monetize the opportunity.

Whitman's play is to have, through the acquisition, what she calls the largest "ecosystem."

"What I mean by that is: the largest number of registered users, the largest number of voice minutes, the largest number of developers who develop the platform, the best product ... that users are willing and want to pay for," she explained.

In my view, GoogleTalk is far better positioned to take over the zero-cost telephony market than eBay. But that's because I have a sneaking suspicion that Sergey Brin and Larry Page may be able to take advantage of the new mandatory wiretapping laws and pioneer automated systems that scan your conversation for keywords and give you related ads - much like its existing AdSense program, but with voice content instead of written words...

How strange to think that companies like Cingular, Verizon, and Sprint may very soon simply be made irrelevant by commercial realizations like this of the experimental Network Voice Protocol originally invented 'way back in 1973 for the ARPANET. And yet how satisfying. For didn't we all experience price gauging by the wireless giants? And now what goes around comes around, and people will have a chance to dump traditional telephone companies faster than you can say  SkypeIn, SkypeOut, and Skype VoiceMail.

posted Saturday, 22-Oct-2005



More Stories By Jeremy Geelan

Jeremy Geelan is Chairman & CEO of the 21st Century Internet Group, Inc. and an Executive Academy Member of the International Academy of Digital Arts & Sciences. Formerly he was President & COO at Cloud Expo, Inc. and Conference Chair of the worldwide Cloud Expo series. He appears regularly at conferences and trade shows, speaking to technology audiences across six continents. You can follow him on twitter: @jg21.

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Most Recent Comments
Tom Foale 10/24/05 10:37:40 AM EDT

I got asked by one of the big telco's to take a look at the economic implications of Ebay's purchase of Skype. I blogged part of my answer at http://honeycombsystems.blogspot.com/2005/10/ebays-purchase-of-skype-for...
I don't believe Google has much of a chance in this market, whatever goes on with regulation in the US telephony market with wiretapping.

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