Jyve Says About SKYPE API

The winner of the competition was Jyve, a Palo Alto, California-based company that decided a year and a half ago to create interactive web sites that could send voice mails, handle call forwarding, and automatically launch instant-messaging sessions.

The company added these features, even knowing that Skype was planning to add call forwarding and other similar features on its own.

“It was a way to get a little more buzz and attention,” said Andrew Hansen, vice president of business development and channel sales at Jyve. “We found very quickly that once we showcased our talent in integrating Skype into software, we became quite popular.”

In the two months since Jyve has released its application, it has heard from many potential hardware and software partners who want the company to build customer applications around its web tools.

For example, Jyve worked closely with Multi-Link, a telephony hardware company that wanted to produce a Skype adapter, on defining its Skype strategy.

“It’s very lucrative business-wise,” said Mr. Hansen. “We are positioned to take advantage of this new economy from Skype.”

He doesn’t feel threatened by Skype’s recent move to open its API more widely to developers.

“It will also open up a lot more opportunities,” said Jyve CEO Charles Carleton. “We’re fairly well positioned and far enough ahead of the curve so we may capitalize on the opportunities more than people who are new to the APIs.”

“It’s a big enough sandbox for everyone to play in,” agreed Mr. Hansen. “It’s like Microsoft, but on a smaller scale.”

Skype too is facing increased competition in the free VoIP market with Google’s entry into the market last week with Google Talk (see Google Learns to Talk). But Skype executives also claim they don’t mind the extra competition.

“It does change the dynamics of the VoIP space and the communications landscape, but we welcome the competition,” said Mr. Pryor.

He pointed out, however, that Google has not yet released any tools for developers to tie into its VoIP utility.

“They have yet to integrate very easily with hardware and software,” said Mr. Pryor. “Google hasn’t produced an API yet to make it extensible or to integrate with hardware and software. We have a competitive advantage there since we’re reaching out to developers from the beginning, but I’m sure Google won’t be far behind.”

Skype Vs Google in VoIP

Kazaa Vets

Skype was created by Niklas Zennström and Janus Friis, the founders of Kazaa, a peer-to-peer audio exchange program, two years ago. It has rapidly moved beyond the computer-to-computer space with services such as Skype Out, which allows users to call traditional phone numbers anywhere.

The Google application is, on the other hand, still very limited, pointed out Scott Kessler, an Internet analyst with Standard & Poor’s. And it’s only available to Gmail users at this point.

“It’s uncertain if you’re going to see broad adoption,” said Mr. Kessler. “Google Talk is exceedingly limited, from having to have a Gmail account, to having to have a computer, and having someone you’re in touch with on the same network.”

Then again, Google Talk is free, at least for now. And Mr. Kessler noted that if users asked for a capability to make calls to land-line phones, Google would probably try to provide it. In other words, down the road, Google Talk could eventually become a Skype-killer.

“They’ll compete with each other, and Google might have an advantage, because their business model is not based on this offering,” said In-Stat analyst Keith Nissen. “Skype is ultimately going to have to wonder, ‘Where are we going to get money from?’”

Google derives the bulk of its revenue from online advertising. In its most recent quarter, it posted net income of $342.8 million, or $1.19 per share, on revenue of $890 million.

Analysts have often said that it needs to diversify its business model. The Mountain View, California-based company has said it isn’t going to run any ads on Google Talk.