March 2, 2021

Skype: the Un-Social Network:

Skype’s new owners might make it the platform it always should have been.
On the list of technology companies that inspire speculation and interest disproportionate to their size, Skype has often been near the top. The international success of its Internet-calling service was near-instant.

In ebay’s hands, however, Skype never quite achieved its promise. After spending $3.1 billion to buy it, eBay today sold off control to a group of technology investors for $1.9 billion in a deal that values Skype at about $2.75 billion. Not by any means small change but not the outlandish success that was once expected of Skype—and that it could have been.

Eighteen or 24 months ago, if you were asked to name the most important social networking platform, “Skype” would have been a very good, if unexpected, answer. Skype had passed 200 million user accounts way back in early 2007. It had 30 million or so users a day. The total time spent with Skype a year and a half ago was about 10 billion minutes a month already well behind Facebook’s 20 billion but not so far that it could never catch up.

Skype is not, of course, a “social networking” tool as the term is generally used. But it unquestionably involves social interaction. And one advantage that Skype had over social networking sites like Facebook and MySpace was that Skype had persuaded many millions of people to download its software—something very few companies have been able to do.

Today a comparison like this would be completely academic. Measured by the number of users a day or the time they spend with it, Facebook has left Skype far in the dust. And while Zuckerberg’s gutsy decision to turn down Yahoo‘s (YHOO) reported $1 billion bid for Facebook looks brilliant, eBay is happy to have wound up with a smaller loss than most analysts expected.

When eBay bought Skype, the talk was about Skype’s synergies with eBay’s marketplace, and lots of folks thought that eBay’s purchase meant that Skype would transform how eBayers did business. As social networks gained traction, Skype, with its powerful client software and enormous user base, seemed well-positioned to jump into the pool. But Skype didn’t go in this direction. Instead, Skype has chugged along, steadily building its business, but never getting to a big transformative moment.