02:12 PM

Two VoIP Services Challenge Skype

Skype is the front-runner among peer-to-peer VoIP services. Two new services, Gizmo Project and PeerMe, are prepared to join the race.

Let’s be frank: Until recently, it was easy to file Skype, the popular VoIP service, into the category of interesting but only marginally useful.

However, if the adage that competition is the root of innovation holds any truth whatever, the VoIP client category appears ready to undergo a remarkable transformation from “marginally useful” to “downright indispensable.” Over the next 12 months, an unprecedented wave of new products and developers will enter this burgeoning market. While a number comprehensive commercial VoIP services such as Vonage provide full-fledged telephone service via a router that is plugged into a network, there has been a boom in smaller peer-to-peer VoIP services such as Skype, Gizmo Project, and PeerMe.

Challenging Skype


Gizmo Project



Utterly dominated by Skype over the last two years, client-side VoIP services have begun to flourish during the second half of 2005. This competitive rush makes sense when you consider that there are currently over one billion Internet users worldwide, only 40 million of whom subscribe to Skype.

In recent months, Gizmo Project and PeerMe have launched new VoIP client services. Additionally, Google has released its own service GoogleTalk, while AOL has announced plans to evolve AIM into a brand new platform named Triton. Even Sony is getting into the act with IVE, an Internet phone service with an emphasis on videoconferencing. Meanwhile, Skype isn't standing still: It has released a beta 2.0 version that includes free video calling.

The Mission: Beating Skype
Regardless of the competition, Skype (which was reviewed back in July) remains the 18-ton gorilla in VoIP, with an outstanding combination of ease-of-use, voice quality, and extra features/services that transcend other narrow peer-to-peer VoIP services that preceded it. (The fact that its basic service is free doesn't hurt either.)

For example, the SkypeOut service allow you to quickly and easily make phone calls to anywhere around the globe at extremely affordable rates. (Example: A 60-minute call to Barcelona would cost only a little more than two bucks.) Additionally, by setting up a SkypeIn account, you can set up your own telephone number in any area or country code you desire. Skype also offers conveniences such as voice mail and conference calls.

Skype remains the 18-ton gorilla in VoIP, with an outstanding combination of ease-of-use, voice quality, and extra features/services. The fact that its basic service is free doesn't hurt either.

Furthermore, in recent months, Skype has begun to market itself even more aggressively, with outreach programs at major retailers such as Radio Shack, and Skype conversion kits that allow you to use your normal phone for Skype calls.

So the billion-dollar question is this: Given Skype’s head start and market dominance, can anyone beat it? To find an answer to this question, I investigated and tested two high-profile VoIP upstarts: Gizmo Project and PeerMe. Each group has Skype targeted squarely in its sights. Each has a singular offering that it hopes will set it apart from the competition.

(If you're already signed up with Skype, or plan to try another VoIP service, you may want to check out our evalution of several different USB headsets and an interesting array microphone.)

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