As the number of simultaneous Skype users topples two million, audio quality starts to degrade and excitement about a great alternative to costly international calls starts to wane. My weekly calls to Australia and Europe are getting less reliable every month. It is time for Skype to step up its relationships with eager VPN providers (perhaps even the ones that have not joined the proprietary VOIP deployment) to deliver quality-of-service levels that maintain the superb voice-quality we got accustomed to during Skype's inception. I would have no problem paying a small fixed monthly service fee to improve call quality and it could turn Skype in a much more viable and profitable business. Any network provider would be eager to become the backbone of Skype's popularity. Akamai, are you listening too?

Tags: Skype, Quality

Radio is about to get a major overhaul. With iTunes, record companies are losing their arbitration, no longer are we forced to buy collections (CDs) in order to enjoy that one favorite song. In the near future that power will be diminished even further. Musicians will post their music without intervention and arbitration of a record company, giving buyers the ultimate selection of music they want to enjoy. Pod-casts is the technology that allows you to pick which radio segment you'd like to listen to (instead of a whole program), and deliver it to you at whatever time is convenient. More exciting is that the creation of pod-casts is open to everyone, allowing anyone to get on the soapbox and speak their mind to the world. Independent reporting from the trenches is only minutes away. New music stations will spring up and deliver music from all corners, to all corners of the globe. Welcome to a free world.

Tags: Apple, Free-market, ITunes, Music, Premium, Radio

With homeland security as a hot topic these days, LaserCard in Mountain View (NASDAQ: LCRD, formerly known as Drexler Technologies) quietly continues to ship millions of unique memory cards as the foundation for "Green" cards and National ID cards to US, Italian, and Canadian governments and others. In addition to its incredible resistance against wear and tear (we punched holes in it and it still read successfully) and unique security features, the LaserCard stores an impressive 2.8M of personal and biometric data. Fingerprints, retina scans, voice encoding or whatever becomes the prevalent set of biometric verifiers, can be combined with visual authentication to ensure the holder of the card is indeed the one presenting himself. All these attributes can be stored on the card and read offline without the need for centralized databases. So why is homeland security not using this card to it's fullest potential? Why does it waste time on privacy debates with regards to centralized storage? Why, four years after 911 are we still not able to verify a persons real identity?

Tags: LaserCard, Security, Homeland Security, Biometrics, IDentity

Investors are getting flooded with Long Tail startups. The Long Tail is the well documented phenomenon in which Amazon.com makes more money in selling books that are not(!) in the top 10,000 and creates controversy about traditional sales principles. Hundreds of examples exist before the introduction of the internet. But the Long Tail really only exists when there is a body attached to it. You go to Amazon because you find the most well known books, then you'll explore its creative variety. The body represents the highly targeted top quality that draws in the audience in the first place. So stop pitching Long Tails, where you rely on some undefined creative variety. Focus on making your numbers in the identifiable market, then benefit from the Long Tail to expand your selection beyond the traditional and constricted marketplace. More on the Long Tail here.

Tags: Long Tail, Amazon, Quality, Creative, Markets

No-one can ignore the power of Google. Undeniably it has built a brand that draws huge advertising dollars. Not dissimilar from Yahoo five years ago. Unlike Ray Lane (who we recently pitched to with a marketplace investment) we don't believe Google will be the player that takes all. Google is a place where you find things (among a lot of things you don't want) and eBay is a place where you know what you want and trade it. Google CEO Eric Schmidt left a little more room than Ray in a recent interview with Charlie Rose, clearly leaving the door open for both players. But what is eBay doing? eBay still seems to be getting bigger, but not much smarter. As with any company, staying true to the core of your success as you grow is a challenge. Many temptations lie ahead.

But fundamental to eBay success are the free-market principles. Offer virtually unlimited supply without arbitration to a Long Tail demand, and simply reap the transaction commission benefit. What does the $620M acquisition of Shopping.com add to that proposition? eBay's opportunity is in developing new trade verticals (consumer, pro-sumer and professional) in which historically demi-cartels limit the supply, open those up with the existing transaction engine and voila. Google is a technology company relying heavily on technology innovation to sustain growth. eBay markets to users who are not necessarily technologists and it should act as a market influencer opening up constricted markets with modified versions of its existing technology.

Tags: Google, EBay, Marketplace, Transparency, Markets

Free market principles are over 400 years old when the Dutch started selling flowers using a manual auctioning system. eBay has done a masterful job of bringing this age old success to the internet in selling person-to-person goods. The benefit of eBay is macro-economic not technology (or user 'friendliness'). That may be the reason why it barely escaped the (2-3) veto at Benchmark Capital. The success of free-market principles can be extended to many verticals and it remains a big surprise to me that eBay has not delved into other verticals using these hard earned principles.

Recently, a new job site TheLadders where I posted my resume (for research purposes on marketplaces), raised capital with a new approach to job search. Instead of charging recruiters it charges the job seeker (specifically the ones above $100K/year salary) a price for access to the premium jobs on the site. A nice concept but how do we know that instead of trusting the applicant, we can now trust the recruiters. Are these posts for real. How are recruiters held accountable. How do I know if my personal data is not abused? As NY attorney general Eliot Spitzer declares: "For a market to be truly free and efficient and have the full confidence of its participants two things are required: integrity and transparency". Why would I trust a job site that does not tell me what transactions are committed. Would I be drawn to eBay if I did not know what products really go for?

Free market principles will change the record industry, new players like Apple have implemented the first phase of a free-market for music. Without truly recognizing it, the record labels are participating in a movement in which the stars are no longer produced by labels, but stars are produced by people. But Apple needed the labels to draw the participants into its marketplace first.

Open-source represents another form of free market principles. Virtually unlimited software development supply is matched with the diverse appetite for the Linux operating system. Why are we still entrusting the publishing of books to the demi-cartel of the book publisher. You can publish books in Audible on iTunes and the software is ready today to publish Adobe's PDF format (yes, in iTunes). What stops Apple from becoming the media hub where free market principles apply to any data type and buyers can tap into the Pareto and Long Tail supply simultaneously.

There are some real hurdles. Hurdles that require capital and domain expertise and VC's to fund them. But we need a different VC, not the technology nut that wants to send a new rocket into space, but one that understands the power of history and evolution.

Tags: Free-market, EBay, Transparency, Integrity, ITunes, Linux, Adobe, Pareto, Media, Capitalism, VC, Evolution