Improve Your Online Customer Service

If you’re wondering why customers aren’t coming back to your e-business, maybe you should take a long, hard look at your customer service.

Even if you master each and every one of the internet marketing strategies out there–sales copywriting, search engine optimization, e-mail marketing and the rest–they’re not worth a dime if you forget about customer service. It’s a strategy that all truly successful business owners understand and pay careful attention to because the one thing all successful businesses have in common is satisfied customers.

There’s an old saying in business: A happy customer will tell one or two people; an unhappy one will tell 10! So it pays to keep your customers happy–especially when doing business online.

Online, a seriously ticked-off customer might not just tell 10 people; they might also write a lengthy rant on their blog, post comments on other people’s blogs, write a negative review of your site on a shopping website, or criticize you on forums and message boards. Or all of the above.

And worse, once something’s been written about you online, it’s very difficult to get it removed. This means that any prospective customer who decides to do a search on your business name could come across it.

So while good customer service might cost a bit of time and money, bad customer service online could cost you dozens of prospective customers. Think how much losing even just 10 sales would cost you, and compare it to the extra sales you’ll gain from making your customers happy.

What’s really interesting is that many case studies show that building good customer service into the operation of a business increases a company’s efficiency as well as its sales. Here are some simple strategies to help you improve your customer service:

Step #1: Automate your sales process to keep customers in the loop.
Use autoresponders to thank your customers for their order, welcome them to your opt-in e-mail list, and send them order confirmations and other transactional emails like “your item has shipped” notices. Customers have come to expect these courtesies, but not everyone online bothers.

You can even add an element of surprise to these customer-service e-mails by including a coupon for money off their next purchase or some extra information they’ll find relevant to the product they’ve just bought. You may also want to ask if everything is all right with your customers’ purchase or if there’s anything further you can do.

This kind of follow-up can relieve any possible feelings of buyer’s remorse and reinforce the positive feelings about your business your customers had when they originally bought from you.

Step #2: Create a comprehensive FAQ page.
An FAQ page answers most of the questions people might have about your products or services. You should also create an FAQ e-mail address, such as info@mysite.com, and keep track of the questions that customers or site visitors actually ask, then answer them and put the answers on your FAQ page.

With those common questions taken care of, you’ll be freed up to spend time giving personal attention to the visitors who need it. The more quickly you handle their concerns the more impressed they’ll be. And you’ll also stand out in the crowd–a recent Pelorus Group study found that a shocking 42 percent of retail sites take five days or longer to respond to customers.

It’s often the times when you respond to a customer’s concerns promptly and personally that generate a huge amount of goodwill for your business–and referrals. Even angry customers can be turned into devoted fans if you pay attention to them, acknowledge your mistake if you’ve made one and fix their problem.

Step #3: Make it easy for people to contact you.
There will always be times when a customer needs to talk to or e-mail someone directly, so don’t hide your contact details away in a dark corner of your website, and always provide contact information on every message you send out.

You may also want to create a customer service page on your site that includes your FAQs, the names and e-mail addresses or phone numbers of people who can help, and other relevant information.

I’m often surprised at how many people with small e-businesses really don’t want to talk to customers and actually make it hard for people to get in touch. But the worst thing you can do is look like you’re hiding or just don’t care.

Step #4: Personalize and segment your e-mail messages.
I can’t say this often enough: Use your customers’ names in your e-mail subject lines and in your messages. Only 4 percent of marketers personalize and segment their messages, according to Jupiter Research, and yet personalized messages have almost twice the click-through rate of bulk e-mail.

As an e-business owner, you can personalize and segment your communications with customers in many ways, including:

• Personalizing emails with names and other pieces of information you collect
• Sending customers personalized birthday, anniversary or special occasion offers
• Sending customers details of new products you know they’ll be interested in (in its recent “Consumer E-Mail” study, DoubleClick reported that 43 percent of the respondents would respond to “purchasing recommendations based on past purchase behavior”)

The more details you can collect about your customers, the better you can serve them with laser-targeted offers, thank-you messages and information that’s relevant to their needs and wants.

This is where your e-mail management software makes your life easier. It can do the segmenting and personalizing for you, so you can spend your time thinking of more ways to target your marketing.

Step #5: Ask your customers how you can serve them better.
People love taking short surveys, and it’s been shown that customer satisfaction is rated higher among people who’ve been asked what they want, even if their answers haven’t been acted upon. Just asking what your customers want and how you can make your service better makes them feel listened to.

Actually acting on their suggestions and improving your service is gravy!

Remember, good customer service doesn’t have to cost much. You don’t have to spend a fortune giving away free products or large discounts. Even a small gesture like thanking customers for their business can help maintain a positive vibe around your business. And automating your everyday customer service tasks frees you up to respond to real concerns or complaints–making your overall customer service even faster and better.

http://www.entrepreneur.com/ebusiness/ebusinesscolumnist/article172294.html

3 Keys for Making the Most of a Home-Based Business

If you operate your business in the friendly confines of your home, you may still be padding around in your slippers at lunchtime and darting out mid-afternoon to pick the kids up from school. But you also know how difficult it can be to live and work effectively in the same place, and you’re looking for every possible edge to help you succeed in your home-based business.

Three tactics can make a huge difference for your home-based startup business. They’re not going to rescue you from a poorly thought-out business model, or turn your company from a five-figure to a seven-figure affair. But fully leveraging these three tactics can ensure that how you actually operate is giving your home-based business strategy every possible chance of succeeding.

Outsource everything but the core functions in your home-based business

You started up a home-based business because you wanted to do something unique, or perhaps better than the competition. So you need to keep your eye on that ball, continually clearing the way for you and your company to focus on this “core competency” – just like larger companies do.

The difference, of course, is that as a home-based business owner, you’re just one person. Just to do business, your startup must handle lots of things beyond focusing on your founding idea, especially if you have larger competition.

“But you should do what you’re good at, and you can’t be good at everything,” says Barbara Weltman, a small-business expert based in Millwood, N.Y., and author of The Complete Idiot’s Guide to Starting a Home-Based Business. “Small businesses have so many different responsibilities that you should outsource whatever you can so that you can make the most money doing what you do best.”

So if you came up with a product to manufacture, but the key to your business model lies in sales and marketing, farm out production. If you’re a consultant whose magic lies in your vision and your interaction with clients, outsource your accounting and other “back-office” functions. If you’re a web retailer who is drawing customers because of your product selection and brand buzz, outsource fulfillment and shipping.

Your home-based business should fully leverage the internet

Taking advantage of the internet can help you operate your home-based business with far more efficiency than was possible five years ago.

In fact, the biggest challenge for home-based operators is to keep up with the many new ways they can make the internet work for them. These days home-based businesses can send out e-mail blasts to their customer database – announcing a promotion or a new product – just as easily as any huge company. They can obtain merchant-bank authorization to accept credit cards online so they can conduct e-commerce; that wasn’t always the case.

And even home-based businesses can make themselves seem bigger than their local niche by setting up a website that positions themselves as an information resource on leaky faucets, or canine care.

Maybe Donna Maria Coles Johnson has found the ultimate application of the internet for her home-based business: getting away from her Washington, D.C.-area home and working from someplace that has a wi-fi hotspot. “I go to the local coffee shop a lot, and that’s where my daughter thinks that mommy works,” says Johnson, who is, among other things, author of several books on how people can make their own natural cosmetics. “Because of the internet, I can work anywhere and not be interrupted.”

Take greatest possible advantage of home-based business tax breaks

For many years, federal tax policy wasn’t very helpful to home-based business owners; for example, only very recently have individual business owners been able to deduct the entire cost of their health-insurance premiums.

And nowadays the biggest problem most home-based business owners have with taxes is that they leave too much money on the table by not availing themselves of many fully legal deductions.

The biggest of these, tax experts say, is that they don’t claim depreciation or the full extent of their expenses that are attributable to taking up part of their home with their office, or manufacturing operation, or warehouse space – or some combination of all three.

And while many home-based business owners take a deduction for the utility bills and other expenses that are attributable to their home-based business offices, they don’t always optimize these deductions. For example, you should consider claiming a “time percentage” of your heating costs rather than a “space percentage,” says Eva Rosenberg, a tax expert and author of Small Business Taxes Made Easy.

“It’s a matter of calculating how much more electricity and gas you’re using to heat the place in winter because you’re there working, compared with what you would use otherwise,” Rosenberg advises. “That’s normally going to come out to a lot more than just taking a percentage of the overall bill that matches the square footage occupied by your office.”

Our Bottom Line

Getting a home-based business idea off the ground can be challenging enough in itself. But by maximizing outsourcing, the internet, and your tax advantages, you can quickly add momentum and sales that will elevate your home-based business into a force in your marketplace.

http://www.startupnation.com/pages/articles/keys-home-based-business.asp

8 Steps to Win at Blogging for Dollars

by Lynne Meredith Schreiber

“When Patty Briguglio took a “bone-crushing fall,” people stopped her on the street to ask how she was doing. She looked at them quizzically, wondering, “How did you know about my fall?” The answer: They read her blog.

As the head of MMI Associates, Inc., a North Carolina public relations outfit with 50 clients, Briguglio didn’t even know what a blog was when senior account executive Kipp Bodnar suggested she start one. He said blogging would be a business boon, so she did it.

Briguglio and her employees upload as many as 10 posts a day to their blog. The result: greater visibility and search-engine optimization. That’s what business blogging is all about – getting your business name in front of as many people as possible, as often as you can.

“It’s a way of creating a brand for yourself,” says Nancy Shenker, founder and principal of Thornwood, N.Y.-based theONswitch, which guides startups and business transformations. Shenker started her company three years ago, with blogging on her own startup to-do list.

“It’s a way to express your business philosophy,” she says. “It’s about cultivating a relationship.”

Blogging puts a personal face on business in a world increasingly focused on impersonal Internet advice and e-mail. “If I can’t spend as much time with someone as I’d like,” Shenker says, the blog “creates the impetus for dialogue.

“It forces a business owner to focus on their philosophy. It’s like when you were in elementary school and the teacher said you have to write about an experience that changed your life.” Maintaining a blog keeps business owners sharp, “making them articulate on a regular basis what it is that they do. It keeps them very, very focused, very sharp and hopefully very compelling.”

Learning the Steps to Dance the Blogging Boogie

Once you decide to jump in, take these tips and use them well:

1. Choose a host. Bodnar says outside hosts like TypePad, WordPress and Blogger are easy and cheap, “but you’re limited to storage size and features.” You get what you pay for, he says, when it comes to adding audio, video, links and content other than text.
2. Hire a dedicated blogger. “Find someone who’s interested in it and will oversee it,” Briguglio says.
3. Collect links up the wazoo. Both inbound and outbound links are vital – collect some “link karma” by directing your traffic to relevant sites, and you’ll see it coming around in the form of inbound links to your blog. The more inbound links, the more traffic and visibility you get. Briguglio recently blogged about Hershey’s Kisses and linked to the Hershey site.
4. Set up an RSS feed. Really Simple Syndication is a code-based system that allows Web users to “subscribe” to their favorite sites – including your blog – for up-to-the-minute action and updates. On that note…
5. Update constantly. A blog’s success depends on the regularity of its posts. “We have so much information on our blog that we rank very high on search engines,” Bodnar says. Searches find frequently refreshed, keyword-rich sites first.
6. Read other blogs and comment on the posts. Get involved in the blogsphere to learn what makes a good one. A great way to start: enter “entrepreneur” at Technorati, a search engine now tracking 56 million blogs. You’ll find more than 200,000 examples of how it’s been done.
7. Collect images, links, statistics and other sources to include on your blog. Think of it as your personal online magazine and make it as visually appealing as possible. Spend some time at a heavily stocked magazine rack and mine it for what works – and what doesn’t.

It’s a Wide, Wide, Web, Web World

While any company can benefit in big ways from blogging, Web businesses are especially ripe for it, says Mitch Free, CEO of “global manufacturing marketplace” MFG.com, whose blog generates a lot of user registrations for his e-comm site.

“Web businesses can seem impersonal,” Free says. “What operators really want is to form [an] emotional bond with their community.”

Mark Stevens, CEO of MSCO, a White Plains, N.Y.-based marketing firm, seconds that emotion. He says customers connect with the blogger’s philosophy or personality – and trust him or her enough to do business together. Blogs, much more freeform than a proper business site, give creative license to you and your readers, allowing you to just chat, be who you are and integrate that with your business.

“One of my blogs, ‘Why Microsoft Hates Google,’ led a major technology firm to see that their traditional focus on standard media needed evaluation,” says Stevens, who updates his blog weekly.

When you get right down to it, a blog is another marketing tool. In an era of explosive Web use, it may well be the key to success. DL Byron, co-author of Publish & Prosper: Blogging for Your Business (New Riders Press, 2006, $21.99), has built blogs for Fortune 100 companies including Boeing and Intel.

“The biggest benefit is findability,” he says. “NASA, Pfizer, Merck, the U.S. Navy have all found our products via Google. We market exclusively with blogs.

“Blogs are about conversations, immediacy and frankness.”

eBay Business Startup Tips

Get eBay Business Startup Tips from eBay Titanium PowerSeller Kevin Harmon on StartupNation
Own an online business in 2007 with advice from StartupNation Radio experts January 6, 2007

What:
Kevin Harmon joins StartupNation Radio to discuss how to start and grow a successful eBay business.

Who:
In 2002, Kevin Harmon started Inflatable Madness, http://inflatablemadness.com, selling media online such as DVD’s, CD’s, video games, and books. Kevin lists over 400,000 items on his eBay store every month and has the third largest store on the largest e-commerce site in the world. With first-year revenues at $300,000 and 2005 revenues at around $3.5 million, Kevin provides valuable, eBay business information on his StartupNation blog at http://www.startupnation.com/blog/category.asp?CATEGORY_ID=6.

When:
Saturday, January 6, 2007
Listen live (radio or online) or call in 866-557-8278
(7-8 p.m. EST/4-5 p.m. PST)
Podcast available at StartupNation Radio, www.startupnation.com/pages/radio, starting Monday, January 8th

Why:
Get valuable tips from entrepreneurial experts and StartupNation Radio hosts Jeff and Rich Sloan, and start your eBay business now!

To meet other entrepreneurs, get free startup advice and voice your opinion:

• Join the StartupNation entrepreneur community at http://www.startupnation.com/pages/community/index.asp.

• Listen live to StartupNation Radio Saturdays (7-8 p.m. EST/4-5 p.m. PST) or log into the StartupNation Radio podcast at http://www.startupnation.com/pages/radio.

Be on the air and get expert advice for your startup!

You can also visit StartupNation Radio online (http://www.startupnation.com/pages/radio/index.asp) or call-in 866-557-8278 (7-8 p.m. EST/4–5 p.m. PST) to ask the Sloan brothers your questions on the air. If chosen, you’ll have the opportunity to promote your new business to a nationwide audience and get valuable startup advice!

eBay’s Annual Post-Christmas Promotion Lifts Listings

The number of eBay.com auction listings rose over 56 percent in 1 day this week due to a post-Christmas promotion for sellers. According to MedVed data, there were fewer than 9 million listings (derived by counting auction category totals on eBay.com) at the start of day December 27, 2006, and by the end of the day, there were 14 million auction listings, with listings continuing to rise the following day. MedVed has tracked eBay auction listing data since 1999. It does not track sales, nor does it track eBay Store listings.

eBay ran a 15-cent 1-day listing promotion on December 27 to boost listings. The question for some is whether the slump in listings in the days around Christmas is due to sellers’ belief in a sales slow-down or whether sellers hold back in anticipation of eBay’s annual post-Christmas listing sale.

Here’s a look back at eBay post-holiday promotions for the past five years:

December 26, 2002: Free listing day
December 26, 2003: Free listing day
December 27, 2004: 10-cent listing day
December 27, 2005: 10-cent listing day
December 27, 2006: 15-cent listing day

As noted by an eBay seller on the Vendio discussion boards, it appears last year’s promotion gave a larger boost to listings than this year’s holiday promotion (http://www.vendio.com/mesg/read.html?num=2&thread=653717).

On December 27, 2005, eBay auction listings rose from 9 million at the start of the day to 16 million by the end of the day, a 78 percent increase.

http://www.medved.net/cgi-bin/cal.exe?EIND

http://www.auctionbytes.com/cab/abn/y06/m12/i29/s01

Yahoo + AOL + Microsoft = Google Killer?

How do you get three giants out of quicksand? The biggest giant eats the other two and makes a boat from their bones.

That seems to be Wall Street’s approach to building an apt competitor to Google. Shortly after analysts dreamed of a Microsoft-owned Yahoo, they’ve amended their solution to include AOL.

Last week, Merrill Lynch analyst Jessica Reif Cohen told reporters that an AOL Yahoo merger was possible in 2007. Cohen said an AOL Yahoo merger was “one of the more logical combinations” to take on Google, cut costs, and combine audiences, and that Time Warner was open to it.

This caused quite the buzz, spawning charts with potential combinations of companies that could merge with or be acquired by another company for strategic reasons.

A Yahoo AOL combination is considered among the most likely, as is a Microsoft buy out of AOL and/or Yahoo.

Or, if we get out our pie-in-the-sky caps, the ideal scenario is Yahoo merges with AOL and Microsoft buys them both. MSN is sinking in the search market. Yahoo is stagnant. And AOL is ready to be sold for parts. But, theoretically, the high profile threesome could make one hell of a Mighty Morphin’ Power Ranger.

This is GEMAYA revisited, that too big of a darn acronym symbolic of too big of a darn theoretical super conglomerate consisting of Google, eBay, Microsoft, Amazon, Yahoo, AOL. And Wall Street gets so hot when people get all cyber-orgiastic.

On paper, it is potentially the only way Microsoft and Yahoo will catch Google. But since competition is key, making GEMAYA a ready target for trustbusters, maybe we should restructure that super conglomerate, add some, and divide it all into two mega-super-conglomerates.

It’s worked for the telcos, right?

How about DAMMIT (Disney, Amazon, Microsoft, Motorola, Interactive, Time Warner) vs. E-GANGS (eBay, Google, Apple, News Corp., General Electric, Sun Microsystems)?

Now we’re just being silly, aren’t we?

Something tells me we haven’t even seen silly yet. We just don’t know, at this point, what level or direction of silly it will be. It would seem silly for there not to be major collaborations to maximize the online market. The size of these potential super-companies isn’t just silly, it’s down right ridiculous. But it also seems silly to drive from the end-user seat, without any concrete confirmation from the players involved.

But it is fun to do, especially at the end of year when there’s little going on and you can’t think of anything to say.

http://www.webproworld.com/viewtopic.php?t=70805

Google Checkout’s No PayPal Killer

How unsurprising: Bribe people heavily, and they’ll use your service. That’s the upshot of a NYT article on Google Checkout, the supposed PayPal killer. Google is subsidizing $10-off discounts for merchants who adopt Google Checkout, a payment mechanism which lets users register their credit or debit cards with Google.

But Google (GOOG) doesn’t really threaten eBay’s (EBAY) PayPal unit. Here’s why.

Google says it will continue to provide Checkout for free through the end of 2007. That’s a big savings for merchants, since credit-card processing can cost about 3% of a sale. But in the long term, Google will have to charge – and it will never be as profitable as PayPal.

Why? PayPal breaks even, at best, on credit-card transactions. But it makes a ton of money on sales where it transfers money directly from bank or PayPal accounts. PayPal charges merchants the same fee to process those transactions but pays much, much less to banks to execute them. (If you thought PayPal lived off the interest on money sitting in PayPal accounts, wake up – that’s not how it makes a serious profit.)

Google, on the other hand, only deals with debit or credit cards, which are expensive to process. Ultimately, as with every other unprofitable Google venture, Checkout is subsidized by sales of advertising.

And that’s why it’s worth it for Google to offer Checkout for free: If the Checkout logo increases click-through rates, then Google and advertisers both benefit, whether or not customers end up using Checkout. In fact, given the subsidy, Google’s better off if shoppers decide not to use Checkout after they click on an ad.

eBay itself, not PayPal, faces the bigger threat from Checkout. E-commerce ads with the Checkout logo could prove more cost-effective for merchants than selling on eBay, allowing Google to draw some merchants away. Added to an existing trend of shoppers buying less on eBay, that could make a bad situation worse.

Ultimately, of course, PayPal’s health depends on eBay, right? Maybe not: PayPal grows less dependent on eBay every quarter. As the Times noted:

In the most recent quarter, PayPal processed $9.1 billion in transactions, up 37 percent from a year earlier. While most of those were payments between eBay buyers and sellers, the number of PayPal transactions outside eBay rose 59 percent, to $3.3 billion.

So let’s stop talking about Checkout as a PayPal killer – and start talking about PayPal as an eBay savior.

http://blogs.business2.com/beta/2006/12/google_checkout.html

How to pull yourself out of holiday debt

Dec 28, 2006

NEW YORK (MarketWatch) — Now that the holidays are over many Americans are beginning the climb out of staggering holiday debt that often looms long and large after the season is gone.

Former New Jersey state consumer affairs director and Credit.com founder Adam Levin says that the most important step in digging yourself out of debt is to create a plan.

“Look at the different interest rates on your credit cards,” he advises. “Pay off the ones that have higher rates first.” If you can transfer a balance to a card with a lower rate, go for it. However, when you transfer certain balances, keep in mind that the existing balance on the card will likely stay at a higher rate.

Do not under any circumstances, warns Levin, take a cash advance from a credit card to pay off debt on another. Cash advance rates are very high and cards also typically charge fees for the advance.

If you received a Christmas bonus, dedicate that to paying down the holiday debt. Whatever bills you ran up during the holiday season, pay them off on time. It’s best to make more than the minimum payment, but if you can’t at least pay the minimum. A late payment can trigger a universal default which causes rates on other cards to rise. But remember: “Minimum payments will keep you in debt forever.”

You can also negotiate with your creditors for lower interest rates. But if you do get a better rate, Levin says you have to follow through. “You can’t make a deal with someone and then have late payments.”

If you find yourself in serious debt trouble, take advantage of confidential debt consultation. There are a number of debt consultation and negotiation companies that will help you negotiate down your debt. Read more on consumer debt at http://www.ftc.gov/bcp/conline/edcams/credit/coninfo_debt.htm. See the site.

http://www.marketwatch.com/news/story/story.aspx?guid=%7B62EE88FA%2D4D93%2D4497%2DA0E7%2D186593B99E1B%7D&dist=rss

Good Samaritan makes up for stolen bikes

PENSACOLA, Fla. – When the bikes Dennis and Tamie Leporin bought themselves for Christmas to ride with their young son disappeared from their front lawn, the couple posted a sign to let the thieves know their disappointment. “I hope U crooks enjoy our bikes U stole; Merry X-Mas,” the sign read.

The next evening the couple heard a knock at their door and found an envelop with $200 inside. A pickup truck was driving away.

“Inside was a note that read, ‘For every crook, there are 1,000 good people’,” Dennis Leporin told the Pensacola News Journal.

“I thought it was awesome. We moved here from St. Louis, and folks just don’t do that in St. Louis,” he said.

Tamie Leporin said she and her husband were concentrating so much on the theft that they forgot about the true meaning of Christmas, until they were reminded by the kindness of strangers.

“We just wish there was some way we could thank them,” she said.

Skype to Target Businesses

Skype will continue to aim at the business market, adding functions for specific business needs, executives said last week at the company’s development center in Tallinn, Estonia.

The company’s most recent 3.0 version of its software allows system administrators to configure and control Skype use across an enterprise and Skype will build on that. Its software provides Internet telephony service as well as messaging, video conferencing, and file transfer.

Skype for Business

In the short to medium term, Skype will rely on the growth of an “ecosystem” of third parties to adapt and integrate Skype for specific enterprise uses, executives said. “My opinion is that it is better to provide good information and let [other] people build the Skype ecosystem,” said Chief Security Officer Kurt Sauer, adding that “the best ideas are somewhere else.”

Vice President, Mobile & Telecom Services Michael Jackson joked that “we will not, in the short-term, be having installers in Skype trucks visiting businesses,” but added that independent “Skype integrators may come along.”

He said “Skype for business” will evolve as a set of functions that can be switched on or off and fine-tuned according to the needs of the enterprise or organization.

Jackson pointed to a set of features for system administrators in Skype 3.0 that allows extensive control, making Skype “more suitable” for company use. The features include the ability to implement a usage policy and allocate prepaid service credits and accounts.

About 30 percent of Skype use is currently for business, mainly by small businesses, but there is increasing interest from larger companies, he said. He cited the integration of a Skype click-to-call feature at the USRobotics Web site as one example of “mainstream business” adopting a technology that was first designed for home use.

Skype ‘Worm,’ Bandwidth Concerns

Speaking to journalists at Skype’s development center, Sauer also addressed the issue of an alleged worm recently said to have propagated in the Skype network as well as claims that corporate networks using Skype could become overloaded “supernodes.”

“We have done reverse engineering on this so-called worm, and it is not a worm, but a real piece of malware, using Skype to send an instant message to users which contains a Web URL that allows the download of other malware that was apparently targeted at Pay Pal,” he said, adding that the offending site had been shut down. Pay Pal is the payment system owned by Skype parent eBay.

Supernodes were used to track 300 Skype users in a kind of distributed directory of all users to form a “global index” for Skype. “Supernode traffic is just short query traffic that uses little bandwidth, supernodes are not involved in speech traffic,” he explained.

Skype May Penetrate Firewalls

The Skype executives were somewhat evasive when asked whether Skype penetrated company and personal firewalls. He said that when both parties to a Skype call have firewalls, it is impossible to form a peer-to-peer link, so a system of “relays” using other nodes is used. “This relaying is what is understood as punching holes in firewalls,” Sauer said.

Jackson added that Skype 3.0 allows system administrators to “specify the port to be used by Skype” rather than letting Skype find a port that works, implying that Skype searches for any open, suitable port when linking a call to a network.

Jackson and Sauer’s meeting with Baltic IT journalists also provided a rare look at Skype’s low-profile Estonian development center, where more than 200 programmers from 32 countries work on three floors of an open-office environment. The small number of separate conference rooms and cubicles all have Estonian names so that “employees learn a little of the language” according to Skype spokesman Villu Arak.

http://news.yahoo.com/s/pcworld/20061226/tc_pcworld/128325