All Things Digital

Q: You said in the past that a CEO should probably serve 10 years. You’ve served eight. What are your plans? Will you follow your own advice?

A: The first piece of advice I wish someone had given me as a freshman CEO is to keep your mouth shut. Somehow I didn’t get that advice, which is don’t talk about when you’re coming or when you’re going because it just creates a set of questions that probably aren’t productive.

–eBay CEO Meg Whitman, San Francisco Chronicle, Nov. 19, 2006

Looks like eBay CEO Meg Whitman may make good after all on her pledge that no CEO should stay more than a decade. Whitman, the public face of eBay for the past 10 years, is reportedly preparing to retire. She has been delegating more tasks to deputies over the last few months and is expected to decide on her retirement in the coming weeks, The Wall Street Journal reports, quoting “people familiar with the matter.”

John Donahoe, who joined eBay in 2005 to lead its auction business unit, is the leading candidate to succeed her.

Rumors of Whitman’s imminent departure come at a critical time for eBay. The company is due to report earnings for the fourth quarter tomorrow. And though this quarter includes the traditionally strong year-end holiday period, it will likely be marred by a general slowing in eBay’s core auction business and the company’s continued struggles with Skype, the Internet telephony outfit for which it recently took a $1.4 billion write-down.

So perhaps it’s a perfect time for Whitman to step aside. Certainly she leaves a storied career behind her. She led the company through its 1998 initial public offering, and from there through some 40 quarters of sequential revenue growth. An impressive achievement by any measure–Skype acquisition be damned. Now, maybe it’s time to move on to bigger things.

Much bigger. Like perhaps a position in the cabinet of friend and Republican presidential candidate Mitt Romney (shown below, left, with Whitman and VC Steve Jurvetson)? Whitman can’t be suffering through those Romney fund-raising telethons for nothing, right?

Ribbit is as much “Silicon Valley’s first telephone company” as the region’s first to boast a silly name and grandiose claims.

Still, the Silicon Valley start-up, which officially opened its Web-based telephony platform to third party developers this morning, is generating a lot of buzz for its Flash/Flex-based telephones (see video below), and rightly so. The company has essentially built a software version of an operator-class telephone switch that connects Internet-based voice communication services with mobile and landline phones and other Web-based phone applications.

Using its Ribbit API, developers can write applications that support full telephone capabilities–voice mail, call-logging, text-to-speech transcription services, etc.–and because they’re Flash/Flex-based, they can be embedded into Web sites and integrated into Web-based services.

“What we have done is made voice an object that you embed into your workflow (or software),” said Ribbit CEO Ted Griggs. “We didn’t want to change how people did things, like communicate via Skype, and wanted to integrate the platform to work with any phone.”

Smart, eh? But how’s the company going to make money? Ribbit says it plans to charge for services like calls to traditional landlines, voice-mail transcriptions and billing. A reasonable plan, but as Ovum analyst Brett Azuma notes, an unproven one. “Unless there’s a foolproof way to get the products out there and make them successful,” Azuma told Wired. “I think the consumer applications are a little unclear for now. Being able to use text-to-speech transcription services and archive voice calls are many of the features that consumers have shown interest in over the years. However, whether or not they’re willing to pay for these features is going to be the big question.”

These patents are invalid. We don’t owe them a dime.”

–Some famous last words from Vonage lawyer Louis Jameson, Sept. 21

If things truly are destined to get worse before they get better, then Vonage may have something to look forward to. Yesterday afternoon the Internet telephony company suffered another costly legal defeat when a federal jury ordered it to pay $69.5 million in damages and a 5% royalty on future revenues to Sprint Nextel for using its patents.

It’s an ugly turn of events for the long-suffering Vonage, which has been beaten mercilessly into submission by legal setbacks since it went public in May 2006. Back in March, the company lost a similar patent-infringement case to Verizon and was ordered to pay more than $58 million in damages and a 5.5% royalty on future revenue.

Vonage was, obviously, dismayed by yesterday’s ruling and plans to appeal. “We are disappointed that the jury did not recognize that our technology differs from that of Sprint’s patents,” Sharon O’Leary, chief legal officer for Vonage, said in a statement. “Our top priority is to provide high-quality, reliable digital phone service to our customers. Vonage has already demonstrated that it can keep its focus on customers and on its core business while managing ongoing litigation.”

Question is, does Vonage have enough money to maintain that focus? As of June 30, it only had $344 million in cash. Of that, $66 million is restricted cash used as collateral for the Verizon bond. Now it may be down another $69.5 million. And who knows what sort of financial damage it might suffer from the 14 purported class-action cases against it over its initial public offering. No matter how you spin it, things are looking pretty bleak.

“Poor Vonage, they can’t get a break,” TeleGeography analyst Stephan Beckert told Bloomberg. “I don’t think it’s any secret that they’re not a well company.”

If you’re among the 100 million Americans who shop at Wal-Mart weekly, chances are you’re not familiar with Voice over Internet Protocol (VoIP), or Internet telephony, but you may be soon. The colossus of American retailing put its considerable weight behind the Internet telephony market yesterday by adding a special section that sells Skype calling cards and “Skype certified” Webcams, handsets and headsets to more than 1,800 of its stores. “This brings Internet communications to the masses,” Don Albert, vice president of Skype’s North American operations, told USA Today.

The deal places Skype and other hosted VoIP services into the mainstream spotlight and may even bring them a huge crop of new users. I say “may” for two reasons. First, bargain-hunting small-town America, where Wal-Mart does a great deal of its business, isn’t exactly technologically adventurous. Will it embrace Skype? Will it even notice it? Second, Wal-Mart’s been reporting lousy financials for a while now. America may still shop at Wal-mart, but from the looks of the company’s earnings reports, it isn’t buying much–even at price points that make it feel like it’s getting the deal of the century.