Posted 3:12 p.m. by Jim Courtney

When commenting on the next financing transaction for Skype as a company to be sold, it is quite helpful if the facts in the story are straight. Today, Robert X. Cringely, in his weekly PBS-sponsored column, attempted to talk about Skype almost being sold. However, as I read the column, there arose statements that, in the end, lessened the probability that I could have any degree of confidence in his metasearch for a buyer.

1. The first statement that caused me concern in the original posting was the assertion that Skype is a company "based in Switzerland". This has subsequently been corrected to its country of registration: Luxembourg; however, Skype has its business operations headquarters in London and does development in Talinn, Estonia. There is also a loose twofold connection with Sweden: Niklas Zenstromm, the founders is Swedish, and one of their recently-hired developers works out of his home in Sweden. So there was not even the potential to have confused Switzerland with Sweden.

2. He talks about Skype being "broadly flogged by an investment bank." But the current financier of record is a well-known and highly reputable Sand Hill Road Venture Capital firm, Draper Fisher, Jurvetson. And since DFJ has a significant interest in Skype, why would they turn the "flogging" over to an investment bank. Eventually DFJ would be interested in an investment bank as a potential player (buyer) in a subsequent financing round for Skype. The page referenced above implies that Tim Draper also has a personal investment but last week Tim was in Estonia with Niklas (doing a video presentation to the AlwaysOn conference) and, according to the DFJ website, also visited the Ukraine. Not totally consistent with being "near" a sale of Skype (unless he simply said "no" from Estonia).

3. Then there is the statement, when discussing the potential for an IPO, "there aren't that many Swiss companies going public on the NASDAQ these days". With a California-based VC partner, the country of registration is irrelevant to the market for a sale of the company. (NewsCorp has its origins in Australia, n'est-ce pas?).

4. 20 million regular users??: Check out Skype Statistics. Number of users online ranges between 1 and 3 million with the largest number between 10 a.m. and 2 p.m. EDT (Europe winding down the business day while North America gears up...). There are about 45 million registered subscribers but where does he get 20 million "regular" users? What is a "regular" user? I might put in between 5 minutes and one hour per day; does that make me a "regular" user? Does a "regular" user have to subscribe to one of SkypeIn, SkypeOut and VoiceMail? or to all three? Eh? (145 million downloads is irrelevant: I download every time there is a new version out but I am sure many millions are way "out-of-date" on the version installed.

Finally there is a metasearch carried out in this article to determine who would buy Skype. This is very premature. A couple of months ago, Niklas quickly squelched rumors that Skype was in negotiations with Yahoo; never heard any more about that one.

A clue to understanding Skype and its business model is given by the recent launch of a Developer program and the simultaneous availability of an API toolkit to allow third party developers to incorporate into other products and services. Yesterday appeared an excellent discussion of this program, its positioning and how third party companies could make money via this program on Skype Journal.

Fundamental to understanding the business model is not to look at pure "conversation" revenue for revenues but rather to look at getting into both internal and third party applications that drive SkypeOut and SkypeIn minutes to Skype. The third party developer program, when adopted by integration into other products and services will drive this revenue. At the same time, new Skype Add-Ons, such as the recently launched Skype Toolbar for Outlook, will also drive SkypeOut minutes. On my recent trip to California I exclusively used the Skype for Outlook Toolbar to launch Skype Out sessions with contacts in the U.S., Canada, Sweden and Taiwan. All Skype revenue; no revenue to the traditional telcos (or even the hotels that provided the high speed Internet service).

Thus, the potential buyer should be one who is interested in Skype as an applications platform, generating service revenues shared by Skype and its developer partners. At the same time, to maximize the potential revenue, the buyer would be independent of any of the current teclos, whether landline or wireless. One wants the largest possible customer base -- only achieved by having some degree of neutrality relative to the actual connection provider. Probably if Cringely had really done his homework -- following Skype Journal as well as other blogs on the VoIP space and understanding the role of the Skype development platform -- he could have had a credible article.

(Disclosure: I was a beta tester of Skype Toolbar for Outlook.)

Posted 12:46 p.m. by Jim Courtney

Yesterday, for the eighth year in succession (and the seventh as a shareholder), I attended RIM's annual general meeting in Waterloo, Ontario. This year the venue had moved next door from the Clay and Glass Museum to the Mike Lazaradis Theatre in the new Perimeter Institute building (funded through Mike's foundation).

If one were to believe the press, RIM is under siege from Microsoft, Visto, Treo, Good Technology and many others. However, three facts brought out in the meeting reinforce RIM's position as a sustainable enterprise platform business, not simply a wireless email infrastructure business:

1. The key number in the presentation: 49,000. This is the number of Blackberry Enterprise Servers ("BES") installed as of the quarter ending May, 2005. Until the competition builds a similar level of enterprise embedding, Blackberry will be the predominant platform for the high margin, lucrative enterprise wireless communications space. This number is even more significant when placed in the perspective of 175,000 to 200,000 Microsoft Exchange server installations. (Note: BES supports MS Exchange, Lotus Notes and Novell GroupWise servers.)

2. Mobile Data Suite, a new web services-based platform for developing wireless enterprise applications: not so much for its capabilities as for its expansion on RIM's platform philosophy. RIM has built a network of ISV's who are developing enterprise applications built around the deployment of Blackberry devices. This only provides further embedding into the enterprise space.

3. The Gartner Study: in one of those quadrant diagrams (Ability to Execute vs Degree of "Visionariness") only RIM appears in the High "Ability to Execute"/High "Visionary" quadrant. Microsoft, Good Technology, Nokia and others fail on at least one axis or the other.

Blackberry has become the predominant PDA platform with a 21% market share; it has over 3 million users -- goals that the competition can only envy. It is the only true "push" wireless e-mail service - the major source of its licensing business. But until the perceived competition can meet these enterprise platform standards, RIM will lead the wireless e-mail communications space for a long time to come.

Follow-up Note: In discussions after the meeting with Jim Balsille, Mike Lazaradis and other executives, they had no knowledge of the Kitchener/London Blackberries story.

Posted 7:12 p.m. by Jim Courtney

Since the last programming language I used (in 1975) was FORTRAN V and I have evolved into a technology business executive, I now take the approach to a product of an end user looking for key features and benefits that can enhance either my or a user's productivity (with a high degree of transparency to the underlying technology). On the other hand, I know enough about development technology to be dangerous.

Over the past couple of years I have been involved with a couple of clients who, in turn, have been involved with services related to Microsoft SharePoint. Yet, nobody has explained to me clearly what benefit SharePoint brings to either an individual or enterprise. Is it a collaboration product? Is it an enterprise portal? How can I, as an enterprise team member, contribute to it?

Well, maybe this article explains why the confusion (or lack of a real raison d'être as an enterprise application). No wonder Microsoft had to buy Groove -- while not a tool I would use, I can at least figure out an enterprise application for it. It seems the author of this article and I have come from different directions to the same conclusion:

"Despite its lack of support and direction from Microsoft, SharePoint Portal Server still remains a viable product for an Intranet portal, document library, and company forum. To make all of those pieces work takes a tremendous amount of effort and education that unfortunately is not readily available to the end user community."