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In examining this issue it's useful to break it up into 2 parts: 1) can this type of network effect be monetized and 2) will Skype dominate VOIP.

It's true that not all large networks can be monetized. Purely social networks (Friendster) don't have much potential because the best you can do is sell banner ads and maybe charge a bit for membership. Networks like Kazaa are based on an illegal activity so not much potential there. However, networks that can naturally be associated with a commercial activity (shopping) can be easily monetized. That's why eBay and Google succeed. Is a large network based on phone calls the type of thing that can be naturally be associated with commercial activity? Probably yes.

Will Skype dominate and if it does is its lead durable? Too early to tell but it has a good head start. However, this is the type of thing that can change overnight. If Microsoft decided to include VOIP into Windows the value of the Skype investment would evaporate overnight. One advantage that Skype has over a service like Vonage is it's viral by nature, one friend or relative pursuading another to get Skype and the larger the network gets the more useful it is. Another advantage is it spreads by software. Services like Vonage require you get their equipment which introduces friction to growth.

Slightly off the subject there's an intangible benefit to the Skype deal. While Skype could be a distraction integrating it profitably into eBay and PayPal and guiding it toward world domination could be a very interesting problem for management.
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