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The news world is abuzz with the story abut Nimbuzz having to drop Skype.

Rumors of this type of activity have been swirling since the Fring/Skype battle back in the summer, and it's no surprise. Skype is doing all the can to not be an interconnected carrier in order to stay clear of regulatory matters around the globe which is why Skype In, which offers local numbers, is not sold with Skype Out, the service that let's you place phone calls to the PSTN (though their unlimited plans do include both as features.)

Unfortunately, Skype really doesn't pass the "Duck Test" no matter how they spin their technology to the regulators. At some point in time they will have to become compliant with the same regulations that any carrier does, or abandon the business of selling any or all of the elements that make them money.

To me this is a "how long can we hold on" game that Skype already realizes they have surrender on. That means adding E911 (Vonage decision), allowing interconnection to other services (MCI vs. AT&T and the 1984 Telecommunications Act), paying into the Universal Services Fund, etc. Oh, and since Skype is global it will eventually mean having to do these types of things all over the world.

This really is not an if, but in reality, a when.

Om's analysis takes the position that it's really, all about the money.

´╗┐Lucrative deals with phone companies like 3, Verizon Wireless and KDDI are making it clear where Skype sees its future revenues. Similarly, Skype has found major success with its apps on the iPhone, making it a good source of revenues in the future. And the company is clearly willing to do what it takes to protect both of those markets.

Given Google has the guts of Gizmo5, GTalk and Google Voice, as they converge to the mobile world, and given their SIP based technology, all Big G needs to do is open up a bit more and a lot of the "open" zealots will move their. Add in moves by Yahoo of late to rekindle Messenger, and Skype's honeymoon period may be ending.

Let's also not forget that Brad Garlinghouse is over at AOL, and in a prior life at Yahoo, Garlinghouse was very much the pro-VoIP and Communications services lead. AOL with it's Messenger and lots of other VoIP technology under the hood also at one time wanted to take a run at Skype. All three companies (Google, Yahoo, AOL) still have massive audiences and very loyal users. Both AOL and Yahoo still have telecom carrier relationships for access, so don't be surprised if one, or all of them jump back into the game in bigger ways.


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Dan Shepperd

The problem with Skype's approach is that they've made their service less attractive.

I used Fring on my N95 and then Nimbuzz on my Android to Skype Out. Now those are cut off and Skype's own offering doesn't offer the same functionality. End result... I put a SIP client on my mobile and stop paying Skype money.

I'm in the UK so less conscious of Skype's regulatory position, but if I were Google... well it hardly needs spelling out.

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