Meanwhile, at the uk.telecom.voip Job Justification Hearings, Dave Higton
chose the tried and tested strategy of:

> In message <17278023.vTCxPXJkl2@ale.cx>
> alexd <troffasky@hotmail.com> wrote:

>> How else are they going to pay for power, colocation, bandwidth, etc?
>> Fairy dust? I very much doubt the pure-SIP operations like Sipgate are
>> raking it in.
>
> Compare with Skype: universal, free to everybody. If you're an
> unskilled punter, which are you going to choose?

Skype, obviously, because it's better. More people are on it and it's easier
to use than SIP.

> Where do they get their fairy dust from?

a) They have paying subscribers - $185M revenue Q3 2009.
b) See Gordon's post.
c) eBay poured a not-insignificant amount of money into Skype.
d) They sell hardware.

Future sources of fairy dust include:

e) Advertising for non-paying users.

They've got a great brand, a massive 'network effect' around their product
and they've got lots of room to start squeezing money out of people who
don't pay them anything yet.

However, Google are offering competing services so Skype can only squeeze so
hard before people realise there's an alternative. I wouldn't be surprised
to see Google set up some sort of Skype-Google Talk gateway in the name of
interoperability, and before you know it, Skype's major advantages begin to
fade away.

> Like SIP VoIP, it's not dead, but it didn't take over from analogue
> lines to nearly the same extent in the UK (where BT priced it with
> a stiff premium) as in e.g. Germany (where it was priced the same
> as analogue and known to be much better).

Who cares? ISDN may be technically better than POTS, but the more
appropriate product won.

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