Facebook Wednesday

8:30 AM -- It seems like this Wednesday, July 6, could see the announcement of a services partnership between Facebook and Skype Ltd. , whereby the latter's videochat capabilities will be embedded into the Facebook platform.

Check out this Guardian article for more of the speculation, which originated at TechCrunch .

It seems probable that social network-watchers will "like" this a lot -- probably to the point of drooling and tweeting uncontrollably until they explode.

Equally enthusiastic, though, will be Microsoft Corp. (Nasdaq: MSFT), which is set to buy the VoIP specialist for a massive US$8.5 billion. (See Microsoft to Buy Skype for $8.5B .)

A hook-up with Facebook would provide a significant boost to Skype's usage, which in turn could help Microsoft with its plans to generate revenues from inserting video ads into Skype's services. With that in mind, it'll be interesting to see the details underpinning any partnership between Facebook and Skype. (See Microsoft to Monetize Skype With Video Ads.)

— Ray Le Maistre, International Managing Editor, Light Reading

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tooltimer 12/5/2012 | 5:00:22 PM
re: Facebook Wednesday

....then I'll quit paying to use it.

tooltimer 12/5/2012 | 5:00:21 PM
re: Facebook Wednesday

No sarcasm intended....just stating if I pay to use a service I don't expect to have to endure a constant stream of advertising splashed in my face....no more than I like receiving solicitations by phone, piles of junk mail in my snail-mailbox, and/or Email box.

While I have control over the latter three (An answering machine for the phone, a technique for penalizing the originators of the majority of the junk-mail I receive via the post office, and junkmail filters that work well for Email), ads embedded in apps/services are another matter when you cannot opt out. This is where I draw a line in the sand. My stance here is simple - I won't pay to play in that sandbox....I pay to use Skype....I don't want to be bothered with advertising when I use it.

Would you be happy if MSFT forced you to watch a stream of advertisments every time you launched Outlook, Word, Powerpoint, or Excel?!?

Nah.....I don't think so....

ethertype 12/5/2012 | 5:00:21 PM
re: Facebook Wednesday

Sensing a bit of sarcasm...

^Eagle^ 12/5/2012 | 5:00:21 PM
re: Facebook Wednesday


If I have to watch ads to use SKYPE, I will stop using it.  Or even if SKYPE only starts doing "google mail" like things and only posts static ads in the margins based on some trolling of my internet habits, I will still stop using it. 

I like SKYPE because it does none of those things and is simply a powerful and useful communications tool.  I am happy with the current business model.  And usage methods of free for basic services, paid for linking to external non SKPE telephones but at a steep discount.  Nice model that should make money without tinkering too much with it.  

If it turns into yet another "ad" delivery platform with a business model based on advertising, I am simply not interested and will stop using it.


jdbower 12/5/2012 | 5:00:20 PM
re: Facebook Wednesday

Paying to call a phone number is certainly a revenue stream, but will it be sustainable?  How to you monetize a video call?  What happens when video calls or at least device-to-device calls become the norm and the device-to-POTS link is dead?  I've been trying to figure out ways I can pay for Skype and get something meaningful out of it, but for me the cost/benefit ratio has been too high so I simply use the service with llittle to no return for Skype. Introducing ads into video calls would be about the only way someone like me would add to the Skype revenue stream.  

I don't like the idea of ads either, but I would accept them if it keeps the service free.  Perhaps what they need is to add a monthly "ad-free video" option to help offset the cost of developing video that "just works" on a myriad of devices by allowing cheapskates like me to see ads but giving others an option to opt-out. Is it worth $2 a month to keep ads away?  Or is it worth ads to keep the service from getting the axe when MS realizes how much they've overpaid?

tooltimer 12/5/2012 | 5:00:20 PM
re: Facebook Wednesday

I don't like the idea of having to pay an additional fee for ad-free use to subsidize those like you who do not pay at all.....

jdbower 12/5/2012 | 5:00:19 PM
re: Facebook Wednesday

But what you're saying is that video has no value to you, only calling POTS numbers.  What I'm saying is that video has a value to me, but calling POTS lines doesn't.  I'm prevented from paying for something that has value for me and that's never a good business model.

I believe that calling POTS lines is a decreasing value long term as more and more use smartphones for Skype/Google Talk/etc. so for a sustainable business model we have to learn how to give money for premium services like video.  Whether that "money" is a service charge or an ad is up to the end user and the service provider.

ethertype 12/5/2012 | 5:00:18 PM
re: Facebook Wednesday

Tooltimer says "I pay to use Skype"

OK, apparently you use SkypeOut.  My guess is that you will not see any ads when using SkypeOut calls, so calm down and wait for the details.

The real issue is that well over 90% of Skype users don't pay a dime, and if they start integrating into Facebook, they'll have a ton of new users who also don't pay anything.  A few of them may become paying SkypeOut customers, but probably not many.  After all, if all your FB friends are now reachable for free, why would you need SkypeOut (ok, so that is actual sarcasm, just to avoid confusion).  I would bet that Skype is looking at these NEW users, obtained via FB integration, as a group that demands a new business model.  FB is completely free to users and has ads.  Skype-on-FB will be completely free to users and have ads.  What's wrong with that?

The bigger question, irrespective of the specifics of the FB deal, is why do you insist that Skype must continue to provide a valuable service to a bunch of users for $0 in revenue? It is wonderful that they have done so to date, but if the business model is not sustainable as they expand through Facebook, etc., then they may have to tweak it.  As long as they're transparent about it and don't abuse their users' trust, let each user decide whether to use their services or something else.

To that point, when you throw your tantrum and leave Skype, where, exactly, do you plan to go for IM/phone/video chat that is as cheap and ubiquitous?

tooltimer 12/5/2012 | 5:00:17 PM
re: Facebook Wednesday

jdbower says "what you're saying is that video has no value to you"

-> au contraire mon ami, I do use Skype for the video conference capability - that's what I percieve as value...and why I pay.

ethertype says "why do you insist that Skype must continue to provide a valuable service to a bunch of users for $0 in revenue?"

-> I never said that....what I said was don't expect me to accept ad-spam, or expect me to subsidize non-paying users to avoid it.

ethertype says " when you throw your tantrum and leave Skype, where, exactly, do you plan to go for IM/phone/video chat that is as cheap and ubiquitous?"

-> Well you may have me there.... ;-) Being a Boomer I don't FB, rarely IM, and so the Phone and Video Conference features are what I typically use. Most of my F&F are users of Apple products, as am I. So by Pereto analysis I can cover much of this need without Skype.

I guess I'll have to wait and see what comes of this business model. I certainly hope MS does the right thing. Too often it seems they do not integrate acquisitions with the Users' interests in mind...


jdbower 12/5/2012 | 5:00:09 PM
re: Facebook Wednesday


-> au contraire mon ami, I do use Skype for the video conference capability - that's what I percieve as value...and why I pay.

<div>But what you're saying is that video has value you're not willing to pay for, you only want to pay for the voice services you buy now and let the video ride for free - that to me says video has no value to you. &nbsp;Skype today is a fruit stand. &nbsp;They have apples (IM), bananas (voice-to-voice), pears (voice-to-POTS) and oranges (video-to-video). &nbsp;They only charge for pears assuming enough people like pears that the other services can ride for free. &nbsp;The problem is I like the occasional orange and eat apples frequently, but I can't stand pears. &nbsp;If you've got four products but only charge for one you're making big assumptions about how people will use your service. &nbsp;Either you get people "gaming the system" through intentional actions or simple preferences, or you get people overpaying for pears. &nbsp;</div>
<div>Monetizing each product is the only way to make sure revenue is derived fairly, otherwise I'm stuck with being a freeloader. &nbsp;The trap you're falling into is the idea that the decision is free with ads or free with no ads, that is generally not the case when you're expected to bring a return on a multi-billion dollar purchase. &nbsp;Your choices are ads, pay for each service with no ads, or have no service at all because MS will kill the product.</div>
<div>Something that works for me is a choice between ads and paying a small monthly fee. &nbsp;Perhaps an idea that would appeal more to you is the concept that buying $xx of Skype credit gets you three months of ad-free video, but it's likely the relative value of the credit you buy will go down as a result since you're now paying for your right to ad-free video. &nbsp;Now you're no longer subsidizing me since I'm putting up with the ads (or paying a monthly fee), but you're no longer buying just minutes but also access to an ad-free service. &nbsp;</div>
<div>In either of the pay-for-video solutions you also need to consider how this affects the other side. &nbsp;Does the calling party get to determine whether an ad is shown? &nbsp;If either side pays for video do they subsidize the other side no matter who makes the call? &nbsp;Or are the ads non-intrusive and replace the "calling so-and-so" screen and terminate when the person picks up?&nbsp;</div>


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