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Summary:

eBay just reported its second quarter (Q2) 2007 earnings, and we are going to get to the details later, but lets just focus on Skype, that strangely seems to be making money even as it usage is flattening. * New Registered Users, an ambiguous number at […]

eBay just reported its second quarter (Q2) 2007 earnings, and we are going to get to the details later, but lets just focus on Skype, that strangely seems to be making money even as it usage is flattening.

* New Registered Users, an ambiguous number at best, now stands at 220 million, versus 196 million at the end of the first quarter 2007. From Q4 2006 to Q1 2007, the new additions were 25 million. From Q1 to Q2 2007, the new additions were 24 million. Down One Million.

* Skype-to-Skype minutes: flat with Q2 2006 at 7.1 billion minutes, down about 8% from Q1 2007 (7.7 billion minutes.)

* Skype Out Minutes at the end of Q2 2007 came in at 1.3 billion for the quarter, flat with Q1 2007, even though up 57% year-over-year.

* The final and the most important metric revenues: $90 million up 18% vs $79 million in Q1 2007. That’s good.

But how is the revenue growing when everything is either trending down or flattening. More importantly, is the operation making any money? They never-ever talk about that! Apparently it is making money, an eBay spokesperson tells us – and points to this line in the press release: “Skype continues to grow rapidly, while delivering segment profitability for the second quarter in a row.”

Oops! Talk about not reading the release carefully.

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  1. guessing: advertising on Skype page views?

    regardless, i still think the real money is in future Skype-PayPal integration… however, i am curious to hear the answers on the customer questions you bring up.

    info i always hear is that customer #’s are very good. wonder what the story is there?

  2. Laurence Oglesby Wednesday, July 18, 2007

    I don’t use skype for skype to skype because the call quality is quite poor when compared to msn messenger [or live.messenger] and google talk.

    I’d recommend [and have been] google talk over anything!
    [are there any stats released about that?]

  3. Niklas needs to convince Meg to replace Skype’s US team. These guys have failed to take Skype to the next level.

  4. If just 3 million of the 24 million new customes from Q1 2007 to Q2 2007 signed up for the $30 annual Skype-out plan, that totals to $90 millions! I hope I got that Math right.

    I am a (former) Sunrocket customer who is seriously considering Skype, coupled with a Linksys CIT400 router and phone system. Skype works for about $100 lesser than Sunrocket’s annual plan. The only thing I am hesitating on is non-availability of E911 on Skype! If Skype could provide E911, they would have all dollars.

  5. How’s the revenue growing?
    Let me guess: extended services (SkypePro) finally available outside of USA, resulting in more signups for $3/month but therefore not necessarily more call minutes?
    More hardware sold?
    Hasn’t SkypeIn become more expensive ($18 for 3 months instead of $10 formerly or was $10 only the signup offer)?

  6. love skype, use it all the time to keep contact with the global projects…it is awesome.

  7. Kevin Kelleher Wednesday, July 18, 2007

    I think franky’s got it right, especially on SkypePro.

    One can be disappointed in Skype’s ability to drive revenue and still be a fan of the Skype service. The problem with VoIP is one that’s hurting a lot of new online business models – how do you make money from free?

  8. Agreed that Skype appears to have stagnated.

    Revenue improvement may come from increased prices (Skype In has gone up around 50%, if I remember correctly), which makes me wonder if eBay understands that they can’t treat Skype customers like they treat eBay customers: If you put a phone number on your business card you are tied to its provider. If Skype jacks prices around, or doesn’t improve their product steadily, fewer people will trust them enough to buy the revenue-generating premium services.

  9. The real money will be made when they succesfully push a search toolbar (stumbleupon?) to the install base…With a average $20 per user search revenue they can easily make close to 4 billion/yr with 70-80% gross margin!.

  10. Skype is still the best VoIP application around, but they are missing a vital part of their business; the sysadmins.

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