Does Skype have Untapped Potential?

Jeremy Wagstaff recently posted a very positive analysis regarding Skype, with which, as a heavy user of Skype for IM, I quite empathize.  However, his take on voice functionality is a tad euro-centric; not to say that he’s wrong, but I think that Skype’s journey back from years of neglect is a harder trek than he posits. The audience isn’t quite aligned as he suggests, and the typical usage isn’t quite right for a widespread integration with social nets.

Aside from those talking to Europe, I know very few in the US who use Skype for voice/video communication. I’m not sure why it’s so big there (maybe phone call prices for more frequent cross border calls? maybe they’re smarter and don’t mind the settup process for cheap voice/video? who knows), but here it’s primarily just another IM technology. My business partner is european and a major Skype user, who periodically asks me to get on voice with him (across town), but I don’t see why I’d use fairly lousy voice when I could just use my unlimited voice minutes on ATT. I have dozens of Skype users in my list, but the americans tend to stay gray, and those that are active IM me, while the bulk of active users all light up during european activity hours.

In terms of the massive number of Skype users that Wagstaff mentions, it does seem like all of Europe is on Skype. I’d suggest that this isn’t the same early adopter audience we used to see on Skype, as much as it’s just everyone who wants to save on phone calls, so integration with social media isn’t the no-brainer hit he implies. I feel that perhaps Skype’s primary competitor in the US is the chronically underrated MagicJack, which exploits the complexity of competitors’ installation processes to rule the market.

Also, although it’s a bit difficult to track the actual usage of a freestanding app like Skype, it’s even harder to track Twitter usage, given the heavy reliance on third-party apps for usage, although Fred Wilson puts in a credible attempt. I’m just not sure that Skype really eclipses competitors within the social space in the way Wagstaff’s numbers assume. Especially as I’m not sure it’s really a social thing as used in Europe today. -Vivox is much more a product of the social era.

In a recent interview, Josh Silverman described a situation in which “1/3 of usage is video, despite the fact that video calls can only be 1-1. Voice calls are multi-party.” Which shows that Skype actually isn’t doing spectacularly well with multi-party voice calls for social purposes, where new players, like Vivox and Ventrillo are highly active and and have cultivated strong relationships with that audience.

If Skype can do some brilliant things involving integration with social nets on mobile devices (bypassing carrier voice functionality), maybe they do win big worldwide, but I think that will be a hard space to take, and I’m not sure they’re actually the best positioned to do that right now.

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