Refreshed Skype Could Rekindle Acquisition Talk

Updated: VOIP detractors who felt Skype wasn't ready for prime time can stop naysaying.

Released for your beta-testing pleasure June 18, the new VOIP (voice over IP) platform is packed with video, ease of use and call quality enhancements that lets users move easily from PC-to-PC audio, video and instant messaging calls.

Skype claims 309 million users, but the improved service is sure to attract additional users in 2008 and may make Google, Yahoo, Microsoft or other Web service and unified communications providers leap at the chance to take it off owner eBay's hands for a cool few billion dollars.
Industry watchers think Skype will attract users because of gas. That's right, gas.

Enderle Group analyst Rob Enderle told me the video enhancements, in which a big old button can be clicked to trigger an instant video chat between Skype users, will be well-received for those wanting to communicate over long distances and avoid travel.   

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"With gas prices going up at an astronomical pace, there is a massive increase in people wanting to do video calls instead of travel, and the combination of products like this and that high gas price may fundamentally change how many do business," Enderle said.

Escalating fuel prices could indeed be a factor in users' decisions to get on the VOIP bandwagon.

Yankee Group analyst Patrick Monaghan told me that Skype has been pushing its product hard in North America over the last year even though it's been a hard sell because many U.S. consumers don't have large long-distance bills now that mobile minutes are cheap and land-line long distance is usually unlimited.

The new, easier-to-use video calls button should help. Moreover, Monaghan said Oprah's endorsement of Skype for a book campaign is already helping.

"This has opened Skype to demographics who wouldn't normally be drawn to Skype," he said. "All the new features that make it easier to install and use video will help these people simply use these features, especially video. People do what Oprah does, and if it's free, that's even better.

However, some are finding the new video and consolidated management tools invasive instead of useful. One reader commented on eWEEK that Skype 4.0 is awful.

"If you have plans to use your computer for anything other than Skype, don't touch it with a 10-foot pole," the reader wrote. "It is perpetually in the way. It starts in full-screen mode, and can not be reduced enough to get it out of the way. The user interface is awful, ugly, and generally insulting. Contacts are arranged in some bizarre fashion [that] makes it difficult to find any particular person."