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Speech is free

By May 29, 20064 Comments2 min read

in the vein of chartreuse, “or why vonage sucks, and you should short it all the way to zero”

Skype, a division of eBay, recently announced free calling to anyone in the US. What does this mean? Well it means that one company has just changed the face of an entire industry by giving away something that costs them maybe a penny or two to provide (remember they were charging 2cents a minute before hand). Skype has just done for communication what email did to snail mail, it shrank the market.

Now the cost of adding a phoneline to your business is $30/year (for a skypein number), and you get unlimited calling in the US. What does this mean? Your infrastructure costs for running a call center/tech support line are dropping down to little more than the cost of the host computer and internet access. Leasing both, and your costs could be $50/person (leasing a cheapo computer – $30+skype # $3+ portion of internet access) + salary (excluding space, of course). That means the barriers to entry are getting even lower now. Skype hasn’t just shrunken the voip/telephony market, they’ve shrunk hundreds of phone based markets.

Skype is changing the game folks, and if you aren’t keeping up with this, then you need to get off your ass and adapt.

The cost of calling someone is now as low as the cost of email, and we all know a voice is more effective than something that might be filtered out as spam. So get calling everyone.

Oh yeah, vonage = money losing potential (the market they were supposed to be defining, just got pulled out from under them).