Cringely on Skype: Wrong, wrong, wrong

It's not very often that Robert Cringely gets *everything* wrong in a column, because he's a really smart guy. But his recent piece on Skype comes close to being a strikeout.

Let's take these one by one :

"So what's most interesting about News Corp. and Skype isn't that the deal fell through, but that News Corp. even knew Skype was available."

In case no one has noticed, communications and media are merging. In particular, Barry Diller over at IAC sees this happening. Is Match a media property, or a structured medium of communication between single people? Ummm, both. The last peer-to-peer client (Kazaa) that the Skype founders did was for distributing paid content (music), whereas Skype distributes free user-created content (voice calls and text messages). Is one of those a media company and one of thos a communications company, with a big bright line between the two? Kind of blurry, huh? If I were Rupert Murdoch, I'd not only know this convergence by heart, I'd be watching Diller like a hawk, which means I'd be all over this space.

"Since Skype service requires broadband, and broadband so far is inherently fixed, Skype threatens only incumbent FIXED phone service, not mobile service..."

Skype is based on the Global IP Sound (GIPS) codec. GIPS is the magic inside Skype that gives it its incredible ability to overcome latency, packet loss, jitter, and all the other crappy data delivery realities of the Internet. If you go to the GIPS website, you can hear a very nice demo of their sound quality over "telephony bandwidth" which is plenty narrow enough (8Kbps if I recall correctly) to fit within a GPRS channel. GPRS usually has waaay to much latency to work well for packet voice, but EV-DO? Absolutely.

And if that's not convincing enough, I have it on pretty good authority that a major CE manufacturer might be selling some Skype-enabled mobile devices in the not-far-distant future. Which they aren't doing because "Skype requires fixed broadband."

"Expect Skype to be sold, another viral marketing success sucked up by big business. Expect it to go to either a major broadband provider or, more likely, to a big mobile carrier with no fixed telephone assets."

I don't have any inside information on this point, but I can see that Skype is most attractive to Yahoo and Google and Microsoft and IAC and... NewsCorp, I guess, given that they're now buying web properties. All these guys get that communications+media = the future, because media is professional content and communications is user-created content and their combination is the "architecture of participation" which is Web 2.0. Why doesn't Cringely get this? He's got all the pieces in front of him.

"Of course, the rest of the VoIP industry loves this. If Skype is worth $3 billion, then so is Vonage and maybe Packet8."

Oh, puh-leez.

Firstly, let's look at cost base. Since Vonage doesn't use a decent codec like GIPS, they have been required to build out POPs across their targeted territories in order to get their calls off the public internet and onto their private low-latency high-quality backbone as soon as possible. This is an *enormously* expensive process similar to building a traditional telco network. Vonage also offers a physical box (CPE) that you plug your phone into, which means it is in the business of procuring, mailing, and managing hardware that has a BOM in the range of $60 to acquire every new customer. So both in capex and opex, Vonage has huge costs that Skype simply does not have. I don't know about Packet8's backbone, but their CPE situation is identical. So either should have a massively deflated value when compared to Skype, which requires only a software download (very low cost) and no network buildout for its "core product" of Skype to Skype calls. Incidentally, this is why Skype has 120 million people who've downloaded its client and Vonage and Packet 8 are in the single-digit millions at best. Skype does need POPs to do In/Out to the phone network, but that is a very different cost dynamic than what Vonage has to do simply to be in business.

Secondly, let's look at user experience. I have tried both Vonage and Packet8, and I have cancelled both because neither worked well enough to use, on Sand Hill Road right in the middle of Silicon Valley. This was due to some problems with my DSL line (thanks, SBC), but ultimately both solutions failed. Skype, on the other hand, works almost magically well. Recently I was in Chamonix in the French Alps, sitting on a plaza in front of the tourist office, using their free WiFi, and talking to (in succession) several foreign countries including the U.S., 6500 miles away.

Skype is unique in the VoIP, and while they may be bought by a smart network provider such as Comcast, my prediction is that they'll be snapped up by one of the usual-suspect next-generation communications+media companies, or as I should start calling them, "Extended Conversation" companies. I heard a rumor yesterday that Skype wanted $1 billion from Yahoo, and Yahoo offered $100 million. I don't know if any of that is true, but it sounds a lot more reasonable than anything Cringely is saying on this subject.

And someone really smart should buy Global IP Sound.

On Vacation, 2005 style

In case you can't tell from the decline of blogging volume, I've been on vacation these past two weeks. I've been climbing mountains, among other things: These shots are from Andrea and my summit of Mt. Blanc (with Alex and Jono, rock on guys!) last week in Chamonix.




I'm now in Prague with some great folks, and will be "back at work" soon. Which is good, because things are hoppin' back at the Galactic HQ, which I know because vacation, 2005, is not vacation, 2001, or even vacation, 2003.

This time, my cell phone works in Europe. No more lugging the old London Motorola Timeport, and no more buying Orange SIM cards and calling all my friends so they have the number. Want to talk? Call me.

This time, WiFi is everywhere. It was free in Chamonix. It was free from my friends in London. It is so cheap as to practically be free here in Prague.

And oh my god, Skype has arrived. I can't even count how many calls I have done on Skype. It's really is so cheap it's effectively free -- I can't remember when I put my 10 Euros for Skype Out in, and it's just worked and worked and worked.

Since I have been in Europe I have electronically talked to people in:
Japan
India
Greece
Serbia
England
The Czech Republic
and of course the USA. I have worked at least an hour every day (except when we summited Mt. Blanc) and a lot more on some days. The ability to be in touch is incredible -- I have successfully juggled two or three different major threads of activity, and still taken time to relax and actually *be* on vacation.

The world is gonna change a lot more real soon now, but it's worth stopping to recognize just how much it has changed in the past 24 months.

Citizen Media 2: The future is concentrated in... Worcester, Mass.?!!

I'll restate the William Gibson paraphrase (not exact quote) from the last post: "The future is here, it's just not evenly distributed yet."

I've posted about Peter Caputa and his excellent blog a couple times -- after swapping a few emails with him, and poking around his extended network over there in Worcester, Mass., I started to see some strange attractor kind of activity.

Firstly, there's the Wormtown Nightlife, a small e-zine sort of publication that has a very Web 2.0 mashup sort of feel to it -- with apartment listings from Craigslist, and events from Whizspark, and all sortsa nice features.

Then Peter started blogging about local bloggers getting print syndication -- which is a seriously hot topic in our own offices, except we tend to think more about print guys building blog audiences on the side -- kinda like Dan Gillmor, The Man Hisself, did.

Then I found this cool little dealie called blogfortickets which, surprise surprise, is a way of getting local bloggers (in Worcester, natch) to publicize an event in exchange for free tickets to that event -- pretty much the unspoken quid pro quo model of the entire access-for-exposure cultural media business, all the way from Vanity Fair magazine and their Oscar party down to your local alternative paper beat reporter plugging his friend's band and scoring a free drink token at their next gig.

And needless to say, when you dig into a "case study" on the blogfortickets site, you are greeted by the cosmic confluence of all things New Media Worcester:

The Event: South End Style

The Task: To help generate online buzz for South End Style by co-ordinating local bloggers to talk up and talk about the event on their blogs. In exchange for their time, bloggers would be given free passes to the event (normally $75)

The Players: Buck Paxton, Duncan Arsenault, Peter Caputa, Volcano Boy, LinneaDates, Andrew Teman, Amy Linny, WormtownNightlife

The Results: Blog for tickets mobilized quickly to take the buzz to the blogs. A WhizSpark event site was created for South End Style to act as the central landing spot for all outgoing blog links. This event website, unlike the main event sponsored site, included special instructions to those who reached the site via blogs…mention the code weblog and receive a free drink ticket with event ticket purchase.

To aid in the process, participating bloggers were given a variety of banners and images, as well as a snippet of information to use in their posts to help them get started. They were each asked to create a post talking up the event in their own way, and linking to the WhizSpark event site. The effect was swift and firm, as word of South End Style permeated the web, creating the buzz that the client was looking for. Last minute ticket sales spiked from word of mouth and online buzz created by the BlogForTickets crew and the event was a success.

There's gold in them thar hills, I think...

So a quick question to the Worcester crew, since it's pretty clear you all know each other:

How do you deal with the old media of Worcester? Besides saying that their site sucks, I mean. The Worcester Telegram and Gazette is owned by the New York Times, has a circulation in excess of 100,000, and has lots of events nicely organized on its site. It's one of the top 100 papers in America. The Worcester magazine may have site issues, but they've got lots of great content, too.

So how does new media interact with old? Trumping it? Joining it? Circumventing it? You guys seem to have boiled the future into a nice tasty concentrated concoction over there -- what's it taste like?

Citizen Media 1: Bombs in London

I live in London, Al Qaeda bombs America. I live in America, Al Qaeda bombs London. So far, I seem to be living life by Ted Williams' maxim, "Hit 'em where they ain't."

Speaking of where they ain't, traditional media can't be everywhere -- but ordinary people can, and are, and increasingly can record and report on what happened. The Washington Post was so surprised that people would actually use cameraphones to take pictures that they wrote two more or less identical pieces on the same subject, and then threw in a gallery of cameraphone images for good measure. Some decent analysis in the second piece -- Robert Macmillan nails the point that this is simultaneously no different from the Zapruder film, and entirely different from anything that has gone before.

Interestingly, history has always had the jump on the news media for citizen participation -- while in the past two centuries it's been hard for individuals to compete with the speed and long-distance capabilities of news, the humble letter or personal account is often the core document from which history is constructed in all its textured glory and narrative magnificence.

Dan Gillmor is right -- we are on the cusp of being able to report the news ourselves as it happens, across all media (audio, visual, textual) and this is going to change the existing channels of information tremendously.

However, we still have a long way to go -- hats off to Technorati for trying, but this falls short of the precise conveyance of information that I get from the New York Times; but Flickr did a great job of highlighting recent tags like londonbombblasts.

To quote William Gibson, the future is here, it's just not evenly distributed yet.

Citizen Journalist: Chris Allbritton in Iraq

People interested in "citizen journalism" and user-created content should check out the blog:
http://www.back-to-iraq.com/ where Chris Allbritton has been traipsing around Iraq supported by readers:

In March 2003, I made it back in time for the war, becoming the Web's first fully reader-funded journalist-blogger. With the support of thousands of readers, we raised almost $15,000. You can read my dispatches here. It was one of the moments in journalism when everything worked. It was a grand -- and successful -- experiment in independent journalism.

Here's a sample of his writing:

“Bumps in the road”? Just earlier today, presumably before the Iraqi journalist was killed, an Iraqi member of parliament was killed in a car bomb attack. I can't even begin to tell you how many Iraqis have been killed in the weeks I was away. And how many more Iraqis, journalists or otherwise, will die because the Americans can't tell who's friend or foe? Those aren't “bumps in the road.” Those are signs that you went off the road without a map a long time ago...

News flash: Iraq is a disaster. I've been back one day, and the airport road was the worst I've ever seen it. We had to go around a fire-fight between mujahideen and Americans while Iraqi forces sat in the shade of date palms on the side of the road, their rifles resting across their laps. My driver pointed to a group of men in a white pickup next to me. “They are mujahideen,” he said. “They are watching the Americans.” Indeed, they were, and so intently that they paid no attention to me in the car next to them. We detoured around two possible car bombs that had been cordoned off while Iraqis cautiously approached.

Rumsfeld's assessment of “good progress” on the constitution is not accurate... [Morale] wasn't rock-bottom among the Marines of the 1st Battalion, 5th Marine Regiment, but it wasn't great. Most of the ones I talked to weren't confident they were doing anything worthwhile, and were instead focused on getting home alive. If a few Iraqis had to die to make that happen, well, war is hell.

I'm not sure who's winning this war, the Americans or the insurgents. But I know who is losing it: the Iraqi people. Those bumps in the road are their graves.

Highly recommended.

I had believed that regardless of the blog-driven forthcoming split between editorial and reporting at the major news organizations, it would be these organizations that would continue to have the near-monopoly ability to fund and maintain an extensive news-gathering presence around the world. Chris' work suggests that this belief may already be out of date.

Bonus food for thought: We all can see that our current news-gathering system is getting manipulable and corrupted beyond belief, and increasingly its authority and credibility are shot. Wouldn't it be interesting if a new form of reporting, based on a new form of trust and credibility -- socially established, not oligopoly-brand-based -- emerged, phoenix-like, from the ashes of the old?

Events, News, Local Media

Tyler drops me an email, saying "Caputa has been drinking from our coffee pot."

As an aside, Tyler will be starting his own blog soon. I am fearful that many posts will be of the approximate form, "Ethan and I had this great conversation, he went off to blog about it, and now my task list is two days longer."

This is a fantastically good post by Peter. In addition to the best graphical design and the best blog figurehead in the (granted, small) dudes-starting-an-events-company space, his thinking is really first-rate. And yes, we'd like to help build "that" -- and a heck of a lot more besides!

So let me address a few points:

"We're not talking micro-formats. We're not talking who can get the biggest pile of events. We're talking about leveraging events to build community."

Absolutely agree. As much as I admire Dave and the Technorati crew, they at present seem to have a "one big pile" theory of the Web that is decidedly un-community. In a previous post I suggested that while their Live8 page implies that they may be getting media (and their recent hiring of the exceedingly bright Peter Hirshberg is another big clue) but I am still not sure that they get local media in the slightest. Local media is not one big pile -- it is a lot of little piles, right down to the happy little sandboxes of communities and individual people. Microformats are designed to enable the "one big pile" method of media, and Google News shows how well that works. Not.

However, *someone* (or someones) needs to put together a big pile of events, because that is the grist for the mill that will make this new media go. There are only three (OK, 3 1/2) ways this can be done:

1) People enter the events themselves. As a .5 addendum, individual users like clubs, museums, and the marketing secretary of the San Francisco Symphony enter the events themselves. The shopping sites (Shopzilla, Pricegrabber) have evolved their models to high levels of participation by their data sources/merchants.

2) Some reportorial/editorial/data staff at some "publication" in this new world enters the events themselves.

3) Some magically delicious techno-spider crawls the web and devours reams of prose, spitting out all the gruel and swallowing the crunchy event bits, which are polished to DBMS perfection by its extraordinary digestive tract.

If we look at "old media" like, say, the Pink Pages in the SF Chronicle, (handily reproduced in data form at SFGate) they are getting their events through a combination of 1) and 2). Technorati, with its microformats push, hopes to get events purely through 3). I think that all of us in this space should, right now, face up to the fact that probably it will be some combination of all three.

And I think that we should further promise that if we are ever sitting at some future panel at some future conference we should not, not, not, snipe back and forth about "editorial is better" or "techno-spiders rule" like the mind-numbing WiFi vs. CDMA panel I sat through at CES last February. It's a combination of these, OK? Pax.

Hey, look, I even have a slide on this -- and even better, it includes a long tail! No Rip van Winkel blogging here, nosiree.



"We can create a template for a Sunday football game and let 50 sports bar owners use it to organize Sunday night 2 dollar draft parties at their bar."

Yeah! Right on! Forget 50 -- how about 5000? Heck, there are reportedly 10,000 bars in Wisconsin alone. (I can't find the link 'cause I heard it on NPR). All those guys need is a template, and their local venue information... and some cardinal event representation of "the Super Bowl" to point to.

Now that "cardinal representation" is where things get dicey, but I'll have to leave that for another post. Because we have all learned from Google that there are several kinds of truth, namely statistical, absolute, network-social, and "Sergey said so." Is this the cardinal site for the Superbowl? Or is it someone else's potentially far better site? Is an autobiography the most authoritative source on a politician's life? Hmm. Again, 'nother post for more on that.

"Now think of all of the events that are happening. And then realize that events are ALWAYS happening. There are always events. New ones."

Peter, you are so on the money! But let's take this one teeny weensy step further. What are all these new things that are happening? Well, there are expected things (events) and there are unexpected things (which, I suppose, can also be called events, but only after they happen). When you take all the expected things that are gonna happen, and you take all the unexpected things that just happenened, and you talk about these things in some vaguely structured format supported by a revenue stream, what do you got?

NEWS.

Ye gods.

Again, previous post:
"The three legs of local media are 1) reporting 2) editorial and 3) advertising."

Reporting about what? Events (future) and unexpected things (recent past).
Editorializing about what? Events (future) and unexpected things (recent past).
Advertising? Oh yeah, billions of dollars of it.

Events are so where it's at.

Final point from Peter:

"Create a site for the Olympics and aggregate what everyone is saying around it, pictures people are taking, etc. Create the unofficial (or official) site for the event, and benefit from its buzz."

I'm guessing that Peter means "a virtual site like Technorati did for Live8." Because in the present web reality, creating a site is already an exercise in virtualization, currently phrased as "mashup." And in the emerging 2.0 future, we won't even be able to do that -- all our readers/writiers/participators/eyeballs/hands/heads/hearts/"fellow inhabitants of What's Next" are going to be RSSing and ATOMing and creating their own virtualization of us... which means that we'll have to do things ever so slightly differently.

More on that in a month or two. And tomorrow, I'll expand on Peter's final point about "revenue stream from site-building" and discuss my theory of MySpace as a music-blogging site a bit more. If Tyler doesn't hit me with the coffeepot.