Skype's Opportunity for IM Federation Leadership
It's been a busy week: — The previously announced (eight months ago) MSN/Yahoo IM federation became real. Yawn. — Phil Wolff and Alec Saunders have commented on the Skype code cracking by a Chinese engineering team.
Context & Ripple Effects
The MSN–Yahoo instant messaging federation, announced eight months earlier, went live this week — confirmed by both the trade press and a [[a:none|BBC]] pickup under 'Yahoo, Microsoft tie message knot.' The story lands against a backdrop of mounting scrutiny for Skype itself: commentary in late 2005 flagged growing political, regulatory and business threats to Skype's future, even as bloggers credited the Estonian startup with having reshaped IP communications.
First-order effects
- MSN and Yahoo users can now message across the two networks directly, ending the eight-month wait and immediately devaluing closed-network size as a lock-in argument.
- A Chinese engineering team's crack of Skype's code, picked over by commentators Phil Wolff and Alec Saunders, exposes the proprietary protocol that underpins Skype's free-calling network.
Second-order effects
- With the two largest US-centric IM networks federating, AOL faces pressure either to join an interoperability bloc or defend its position as the biggest remaining walled garden.
- If the Skype code crack matures into working third-party clients, Skype's control over who connects to its network weakens, forcing choices between openness and the closed model that made free calls between users possible.
Third-order effects
- Federation among incumbents points toward interoperability becoming table stakes in messaging, shifting competition from subscriber counts to voice quality, presence, and features — ground where Skype already operates.
- Sustained protocol reverse-engineering raises the prospect that regulators or industry bodies eventually treat IM interconnection the way telephony interconnection is handled, formalizing what MSN and Yahoo have done bilaterally.
The trend: Consumer messaging is moving from walled gardens toward federation, and voice-first players like Skype are positioned to lead rather than follow that shift.