Interconnected

Skype allows two home computers to swap large amounts of data, without passing through a server, from behind firewalls and NAT. That's pretty important in itself--giving a friend a big file is still a shamefully difficult thing to do. But what Skype also has is three things: a payment system, developer APIs for automated voice applications (using Voice XML and voice recognition) and a p2p heritage. Why is this important? It means people could, in theory, build and run shops - from home - to sell music, video, and future large media files. And the p2p past of Skype means that a file isn't just sent from the seller to the buyer--it can go to multiple people at once. If you try and sell a video on the web, using traditional servers, you'll hit the bandwidth wall if it gets popular. The way Skype could do it, it wouldn't matter how much you sell.

Imagine this scenario: Skype is built into mobile phones. Some time around 2009, ring tones get popular again. I visit the skype.com downloads area, and grab a "Ringtone Shop" application that I run on my broadband-connected home pc. I drop a bunch of my home-made music into it, record a voice greeting, customise the menus, give the files a price, add a Skype-In phone number, and start advertising. A little later, you call my Skype number from your mobile. You talk your way through my ringtone shop, hear a few previews, say "yes" to purchase and tap a few keys to make the transaction. I get the money, the ringtone is downloaded to your phone. Hey, but the ringtone gets popular--1000s of people are downloading it. No problem, it's cached on the Skype network and my home pc doesn't have any problem at all. We've touched no central servers, it's all done at the edge of the internet, and - to be honest - it could almost be built today.

I had the pleasure of working with Mark Hall late last year. He spent several years at RealNetworks, and made me notice how much a video marketplace has been taking off even without a good platform for it (people are buying and selling video tutorials on all sorts of things). I can't imagine Skype would have had any trouble finding companies to meet this demand using their infrastructure. We're talking about software to get through the bandwidth barrier and open huge marketplaces--like eBay but for virtual goods, not physical ones, and the software would include the virtual postal service. When eBay bought Skype, they weren't just buying the company. They were shutting down a half dozen potential competitors in 2012; making sure alternative business models wouldn't even emerge.