ABSTRACT
In 2007, millions of people could make free high-quality international phone calls, something that had been unheard of only a decade earlier. One major reason for these free calls was voice-over Internet protocol (VOIP) technology-a technology for routing phone calls over free Internet networks. VOIP threatened the very future of the telephone business as the traditional phone companies had come to know it. To many of these traditional phone companies, VOIP represented a threat. To new start-ups such as Skype, VOIP was a great opportunity. This phenomenon in which existing business models are threatened and often rendered obsolete by a new technology is nothing new. Electric refrigerators replaced kerosene refrigerators, which had replaced hauled ice as a means of keeping foods and medicines cold. PCs replaced mainframe and minicomputers. Internal combustion engine automobiles replaced horse-driven carts. iPods and other MP3 players replaced Walkmans, flat-panel displays displaced cathode ray tube (CRT) displays, and online auctions replaced offline auctions. In some instances, such as the case of contact lenses and eye glasses, the displacements were only partial. As the partial listing of Table 7.1 suggests, the list of such displacements is long.
