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WEB HOSTING NEWS

Why All the Hype About Skype?
By: Terri Wells
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    2005-06-22

    Table of Contents:
  • Why All the Hype About Skype?
  • Who is Zennstrom?
  • Give Away the Razors, Make Money on the Blades
  • The User Experience
  • But Wait, There’s More

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    Why All the Hype About Skype? - Give Away the Razors, Make Money on the Blades


    (Page 3 of 5 )

    One has to ask, however, how Skype can possibly make money when it is giving away basic calling for free. Such questions provoke a smile from Zennstrom as he points to Yahoo and Google. Nobody has ever paid to search the Internet through those search engines. That fact, combined with the monumental and disorganized nature of the Internet, encouraged everyone interested in surfing the Web to start using search technology. This made search engine companies incredibly valuable and able to make money from add-on services.

    In fact, Skype is taking this very approach. While Skype’s software has been downloaded more than 100 million times, there are still plenty of people who are not on the system. If you use Skype and you want to call friends who do not, you can take advantage of a service called SkypeOut. Users set up accounts with Skype, and then can call any normal phone number (mobile or landline) for a rate of about US$.02 per minute (for more than 20 countries).

    For those who may not have priced it out recently, that rate is lower than the rate available from many of the major telecommunications companies. Nor does it change depending on the time, or where you are calling to; it’s where you are calling from that counts. Or, as Skype explains on its website: “But no matter what the rate is, calling your friend next door is the same price as calling that same friend in London from Beijing, San Francisco, Taipei…or even Manchester.”

    Of course, as with any of us, Skype users want to be able to receive phone calls from their friends as well. So in early June, Skype added the SkypeIn service. Users of this service receive a regular phone number, which their friends with landline or mobile phones can call. Users can purchase up to three numbers from their home country, at least initially; the service is still in its initial test period as of this writing. The best part is that, as for SkypeOut, it is very inexpensive; a full year of SkypeIn costs less than I pay for a single month of mobile phone service on my plan.

    But that’s not enough for most people anymore. If we miss a call when we can’t answer our phones, we need to get a message. Zennstrom anticipated that as well. Skype Voicemail lets users receive a voicemail message up to 10 minutes long. If you are feeling extravagant and want to get both SkypeIn and Skype Voicemail, it will set you back only US$58 for a full year. Remember, basic calling is still free to other Skype users and cheap to everyone else.

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