Skype and Google

It’s been almost a year since I wrote about how I like Skype, and I noted some legal problems between the Skype founders and eBay, which bought Skype in 2005.

Shortly after I wrote that, eBay completed the sale of the majority share of Skype to a private investment group (eBay kept 30%), and shortly after that, the investment group settled with the Skype founders: the founders got a 14% share and two board seats, and they dropped their lawsuits. With those problems sorted out, Skype continued to do well.

Now they’re looking to go public: Skype filed for an IPO (Initial Public Offering) a few weeks ago (and see here). It takes a few months for that to go through, so we’ll have to see specifically what they propose, with regard to number of shares and offering price, some time in November, probably.

Meanwhile, Google has started offering free online calling directly from Gmail. You install a voice plug-in for the browser, you log into chat from the Gmail screen, and there’s now a Call phone selection. You can call U.S. and Canadian numbers free, at least through the end of the year, and International calls go at per-minute rates that compare with Skype’s. If you have Google Voice (also free, formerly Grand Central), your Google Voice number will allow free incoming calls as well.

During Google’s free period, they provide a bit of an advantage over Skype: it costs me about $5/month to have an incoming Skype phone number (SkypeIn, in their parlance) plus a subscription for unlimited calls to the U.S. and Canada (SkypeOut). That’s minimal, but not as minimal as free. Google is now a direct competitor to Skype. [And, by the way, Google had tried to buy Skype, back in 2005, as had Yahoo!; they both lost out to eBay, which came to regret its purchase.]

What will the new Google announcement do to the only-slightly-less-new Skype IPO filing? It might mean that Skype shouldn’t dawdle, and should get the actual IPO done as soon as they can, while there are still a few chinks in Google’s VoIP armour.^[1] Alternatively, it might mean that it’s already too late for Skype, that few will be interested in Skype’s public offering, and that the Google juggernaut will soon run them over. We’ll have to see.

In any case, I’ve had a fresh chance to try both services, Skype and Google. I use Skype regularly, as my normal phone service, and have done for about a year and a half. For the same time, I’ve also used Google Voice as the phone number I give people, and calls to that number ring me on Skype and/or my mobile phone, depending upon how I have my settings at the time. It’s nicely flexible, and it means that folks don’t have to try chasing me around at a number of different phone numbers.

Well, now that I’m working for a Chinese company, I occasionally have conference calls with China. The way we call China from the U.S. is with pre-paid calling cards — I call a local number, give it some codes from the card and the number I’m calling, and it connects me. The face value of each card is $20, which gives me 520 minutes... that comes out to about 3.8 cents a minute. I think the company gets a discount on the cards, though, so I don’t know what rate they’re actually paying.

Skype, and now Google, offer calls to China at 2.1 cents a minute, a little more than half the calling-card rate. That sounds like a nice saving, doesn’t it? On the other hand, as I said, I don’t know what discount we’re getting on the cards, and even if we’re paying full price, if I’m on the phone with China for four hours in a month, we’re only talking about saving about $4 per month. That’s not a big deal.

More important, though, is the audio quality. On my first call with the calling card, I had trouble getting the conference code through, and it seemed to be due to poor quality, distorting the DTMF tones. When I finally did get on, it was hard to understand people, and I wasn’t sure how well they were hearing me. For yesterday’s call, I used Google instead, using the free $1 credit they provided.

What a difference! As with Skype, Google’s audio quality was perfect. The conference bridge accepted the codes on the first try, everyone on the call sounded crisp and clear, and I could also be heard clearly at the other end. I’ll be calling with Skype or Google in the future, for sure.

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^[1] Language note: a chink in one’s armour, dates from the 16th century, and comes from a Middle English word meaning a crack or fissure.