Killing Skype
There’s been a bit of buzz created by TechCrunch’s leaking of a Google Voice desktop app built from the Gizmo platform last week.
Most of the buzz has been driven by speculation as if or when the desktop app will be released. Many have proclaimed this to be a move that would put Google Voice in direct competition with Skype.
Some have even gone so far as to suggest that this Google Voice desktop app might be a Skype killer or at the very least become a heavy competitor.
The reality is that killing Skype or even putting a sizable dent in their business won’t be easy for Google Voice even with a desktop app. Here’s why:
- No motivation to switch – The majority of Skype users use Skype for things like Skype-to-Skype calls, video chat, collaboration and cheap international calling. While the new Google Voice app might eventually mimic these features, why would a Skype user switch? Google Voice must come out with something that will motivate current Skype users to switch. Oh and don’t talk about the free number – I’m sure Skype could hand out the same thing.
- Poor Track Record – Google has a poor track record of success outside of their core business of search and advertising. The likelihood of them successfully mashing two companies (GrandCentral and Gizmo5) together underneath one roof and taking out the market leader is very slim – no matter how much money they have.
- Privacy Issues – Sure Google Voice is free and serves a purpose, but at some point people will eventually become wary of the amount of data they are freely giving to Google (who is selling this to advertisers). It is only a matter of time before folks realize that in many cases Google is just as bad as Facebook is when it comes to sharing data with third parties.
- Business Model – At some point Google Voice will need to make direct revenues or act as a channel that creates indirect revenues (I.E. monetized by advertising). Right now Google Voice is popular, but it’s free. How many would pay $5 – $10 a month for it? I’m not sure. Plus ad supported calling has proven time and time again to be a failed business model. Now money could be made selling minutes (outbound), however that is increasingly difficult to do.
In the end a Google Voice desktop app will certainly broaden the appeal and usage of the service. But it doesn’t appear to offer anything more than what can already be found with Skype (and others).
It’s simply not a game changer, not enough to kill Skype and likely won’t put much of a dent in their business.
10 Comments
Google voice is not entirely free. I make all my long distance (international) calls using GV, because calls to overseas cell phones are cheaper than all others who overcharge tremendously and at the end GV is much cheaper. Compare that to Vonage, ATT, Magic Jack, and others.
Besides, you can call from anywhere by accessing your universal number of GV which is the one I give to everybody.
I disagree. You have to look at the whole picture of what Google is planning long term. They see the future as a mobilie future and are developing devices with many features that people will want from a mobile device. People will use these mobile devices (Android and Chrome OS Phones, Netbooks and Tablets) to still perform searches through Google. They don’t have to monetize all of these features and if they do, that’s only a bonus.
Search, by the way, is not their only success. Chrome is growing rapidly as a Web Browser. Android is on it’s way to the top of smartphones (which will integrate VOIP by the way) Also, their are many Gmail and Gtalk users and the number is only growing. If Gmail and Gtalk users can now also make phone calls from a REAL phone number to REAL phone numbers (while using their computer) and omit the Skype number, they will. We put up with Skype because we have to (for now).
I don’t think Skype is going anywhere just yet, but they need to be thinking about their future and what new features they will be able to offer to keep people around.
@ Leon
The majority of those using Google Voice are using the free portion. They like the inbound virtual number. I don’t have specific numbers, however I bet my paycheck the majority of folks are not using it for outbound calling like you are.
My entire point was that people are touting Google Voice’s desktop app as a Skype killer…and it’s not right now.
It’s no secret that most use Skype for the free Skype to Skype and the low cost international calls. If Google Voice wants to move users from Skype to Google Voice, they’re going to need to do something, because price just won’t do it (because Skype to Skype is free and their international rates are competitive).
@ Todd
It’s true that voice is but a feature in Google’s grand vision of their hosted business utility suite, but I disagree with your inference that Google sum vision will beat out Skype when it comes to voice. I say this because it’s hard for a company to devote resources everywhere – it spreads them too thin.
So even though Google is larger, they have so many things to focus on that they can only devote so much to voice. Others like Skype are not as wide and those can focus more resources on one specific silo.
Just look at what folks are doing to Microsoft.
I also disagree with your ascertain that Google’s web browser and mobile platforms are “successes.” Neither of them are market leaders, nor are they even second runners.
Lastly, Skype will continue to improve (there roadmap is solid), so the onus is really on everyone else to try and outclass them to the leadership position.
1. You underestimate Google and are treating them like just any other company. They do not spread themselves thin. They don’t treat different divisions the same that another company would. They have entire teams devoted to the development of different ventures. Google Maps (another success you forgot), for example, is comprised of a team of extremely talented developers in New York that focus primarily on the “success” of Google Maps. There are many other teams all through out the world developing new techonologies.
2. Google also has the money to buy existing companies such as Gizmo5 and Grand Central. These two will be tightly integrated to offer a far more superior purpose than what Skype could ever offer. Skype, you forget, is for techies and international callers ONLY. Google Voice will become a common product used by the masses.
3. Android has outsold Iphone and is quickly gaining on blackberry and WILL dominate the smartphone market. Do your research first. http://www.pcworld.com/article/195958/android_outsells_apple_iphone_at_last_says_npd.html
4. Chrome Browser is used more than Apples Safari and is quickly catching on IE and Firefox. http://techcrunch.com/2010/06/28/statcounter-chrome-now-bigger-than-safari-in-the-us-too/
5. Either you work for Skype or you should do some homework first.
Oh yeah…… I forgot….. Google to Make Cash Offer to Acquire Global IP Solutions- See link below.
If Google can take on the LARGEST TECH COMPANY IN THE WORLD (APPLE) and beat them (smartphone and web browser), you don’t think they can take on skype?? I give Skype a year before they are forced out of the market or forced to be bought out by a larger company such as Apple or Verizon.
@ Todd
I don’t work for Skype and I don’t underestimate Google. I’m just being realistic.
(unlike most Google fan boys)
The chances of them beating the leader out in a non-core business sector is slim (it’s slim for everyone).
None of the examples you’ve provided prove that Google has been an overwhemling success outside of their core business…fast growing, emerging, etc doesn’t mean successful. Even Google Maps is driven by it’s tight integration with Google search.
And I could list hundreds of companies the looked to acquire and Frankenstein their way to a leadership position in a non-core market. More often then not it doesn’t work out well.
Viva la Skype 😉
I feel like I’m being sold on why betamax is better than vhs. Skype has worked hard to improve their technologies but that is not always enough. Again, Google voice services a broader range of people with a real phone number.
You say Android is not a success? Every carrier and every manufacturer wants Android now as their OS. It’s a HUGE success!! The Gvoice experience on an Android phone is seamless. I can call out with my Gvoice #, track calls, get transcribed vm’s on my gvoice app. Try it. You will see what I mean.
Google maps also put Mapquest out of business by the way. And yes, it is tightly integrated with their Search!!! That’s my whole point. Gvoice, along with gmail and everything else is being tied into ONE PRODUCT. People want one product to use for everything.
Just wait until Chrome OS along with their tablets that have a full range of google products comes out. Google is going to take a huge chunk of the market share away from Apple and Microsoft.
You can manufacture a far more superior windshield wiper blade and sell it on the open market but if I make one comparable to yours and have it installed on almost every new car, then it’s safe to say there will be more users of my product. Only fantatics will stick with your brand.
@ Todd
And there’s over 5 million fanatics using Skype at any time, any day. They’re not going anywhere anytime soon.
Yes but there are 300 million people using Google every day and over 2 million Android phones shipping every month. That number is dramatically increasing. HTC can’t even keep up with the demand. Gvoice just came out of beta and they haven’t even integrated Gizmo5 yet. This is only the tip of the iceberg.
The majority of people don’t even know what Skype is. Seriously. Unless you’re attempting to call people internationally you would never even look for a product like Skype. 5 million internationally is a VERY VERY low number.
Gvoice will become as common as the Android phone is becoming because it’s so tightly integrated into the Android experience.