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SkypeOut…Is It Really Free?

At first blush, the big Skype announcement that it will be allow free calls to everyone in US and Canada is having a desired effect: one of glee and joy.

Someone did come-up with a nifty stunt to bring the focus back on Skype. Regardless, while it is certainly joyous event for some, it is prudent to point out that the deal is only valid up until end of 2006. Now this is a deal that is not available to Skype users outside of the US, where a large percentage of them reside.

Why this schism? Because in Canada and US, the termination costs are so low, that Skype, which continues to suck money like a certain SF slugger sucks at-bats, the overall costs of a marketing stunt like this aren’t high.

There is the unsaid reality of Skype in the US: it doesn’t nearly have the penetration, usage, or mind share as it has in Europe and Asia. The ultra-low cost calling plans on Mobile phones, and more recently on the landlines make it even less attractive. By offering free calling, they are desperately trying to get something going on this side of the pond.

Some folks think that this is a net negative for AOL’s AIMphone service. I don’t necessarily agree. I think AIMphone is basically giving away a free phone to exisiting AIM users - a much easier task than getting people to sign-up, and download a new software client, as Skype is trying to do.

Any way, if you want to marry you low cost phone plans from your Bell operating company, the better option is TelEvolution’s PhoneGnome, a small gizmo that meshes your VoIP, SIP, Skype and your regular phone line, always picking the lowest cost (or free) option to route the calls. Their new product, GnomeLink allows PhoneGnome users to call Skype users from their PhoneGnome-enabled home phone, and to answer Skype calls on their PhoneGnome-enabled home phone.

Nevertheless, the SkypeOut, AIMphone and GnomeLink announcements are only part of an ongoing trend - vanishing voice revenues.

PS: I wasn’t pressured into saying something about this deal by Valleywag. No seriously - I have been out of pocket at Mesh conference. And seriously, I don’t have a clue how Skype will make money off this … or!

SkypeOut…Is It Really Free? - Tuesday, May 16, 2006 -

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