Skype's 'success' speaks volumes

Not even 600 million downloads and legions of satisfied customers guarantee profits

By many measures Skype has been a remarkable success, primary among them (for me) that the videoconferencing it enables has managed to virtually reunite my sister in Minnesota with her family in Massachusetts.

(2010's 25 Geekiest 25th Anniversaries)

However, Skype has not been the kind of financial success one would have expected from a company that once commanded $2.6 billion from eBay (their bad) ... and there are ample reasons to doubt that a financial windfall will ever happen. Lee Gomes, a senior editor at Forbes, examines some of those reasons in a piece published this morning. He summarizes the problem tidily:

Revenue of $719 million isn't bad, but is hardly remarkable when your product is used by hundreds of millions of people.

Technologies like Skype are so disruptive, as they say in business school, that they tend to destroy the very economics of their own business. Thanks to Skype and its many imitators--every Web chat program now has audio and video built in--there is no money to be made in computer-to-computer communications, certainly not between homes.

Yes, this has been apparent for awhile now and Skype has many fellow travelers in this rickety boat. However, it remains a remarkable characteristic of the Internet age that technology that can deliver so much value to so many people can be worth so little to the people who provide it.

Welcome regulars and passersby. Here are a few more recent Buzzblog items. And, if you'd like to receive Buzzblog via e-mail newsletter, here's where to sign up.

2010's 25 Geekiest 25th Anniversaries.

8 in 10 browsers leave identifiable "fingerprints," EFF warns.

How many zettabytes can dance on the had of a pin?

Dear Apple: Please make "magical" disappear from your iPad marketing.

How the 'Net would have saved Coke from New Coke.

I have absolutely nothing to say about the iPad.

Google cracks animal translation riddle ... for Android.

Clever video technique shows there really are two sides to any story.

Doing the Laptop Drive of Shame, Part III

True: This site is not Snopes.com

A new take on cloud security ... from Hitler.

Facebook pushing 'Suicide Machine' into an open-source afterlife

Cell-phone gabber in fast-food line gets his just deserts

Join the Network World communities on Facebook and LinkedIn to comment on topics that are top of mind.

Copyright © 2010 IDG Communications, Inc.

IT Salary Survey: The results are in