VoIP Toolkit

The danger in Skype's plans

Ben Charny CNET News.com

Published: 04 Apr 2005 16:55 BST

Like the iPod, free phone service Skype is creating a coattail economy as hungry developers rush to cash in on its popularity.

In just 18 months, Luxembourg-based Skype has signed up some 31 million registered users, promising free phone calls over a broadband connection between two members anywhere in the world. Now Skype is hoping to take the service even further by recruiting third-party developers to build add-on programs that might attract even more customers and possibly take its technology in new and unexpected directions.

Since the company began licensing or giving away its proprietary source code late last year, an estimated 1,000 programmers have jumped on the bandwagon, creating dozens of free and commercial products for the service. Developers get the source code by promising to either give their products away for free or provide Skype a share of the profits.

"Skype prioritised freely offering the [source code] to expand the potential of Skype and inspire great developers worldwide," Skype spokeswoman Kelly Larabee said. "We will extend and formalise our software developer programs with time."

Building a viable developer community is considered a key step in the evolution of software dynasties. A few years ago, Microsoft CEO Steve Ballmer drilled the concept into the heads of Microsoft employees, bounding up and down onstage at a company event bellowing, "Developers! Developers! Developers! Developers! Developers!" The now-famous scene became the butt of jokes when the tirade made the rounds in an online video, but the truth behind the message has never been disputed.

Skype's developer program has seen some limited success so far. In the vanguard are relative unknown companies such as VOIPail, Connectotel and Meinskype, offering free Skype voice mail, SMS and ring tones, respectively.

Also in the works are Skype-based advice lines selling legal and medical information, astrology forecasts and other services. Paypal-style payment services for Skype have already been developed to handle micropayments involved in such transactions, potentially turning Skype into a sort of eBay for advice and dating services, if Skype developer Jyve has its way. The company is developing tools to let Web site operators cash in on just such a trend.

"Where I see money being made is for professionals to charge for their time over a Skype line," said Jyve CEO Charles Carleton.

Third-party applications are an important competitive bulwark for Skype, which is pushing to make its proprietary software an industry platform. Most of its competitors have turned to open standards-based technology known as Session Initiation Protocol, or SIP, that's used in instant messaging and Internet telephony and can be freely licensed by anyone.