Skype Revenues – $318,000 a day

23 Comments

EBay just reported its earnings, and while rest of the data doesn’t intrigue me as much, the Skype data is pretty telling. In the 78 days eBay has owned Skype, the company did sales of $24.8 million. No mention of profits in the press release, but they do point out that nearly 87% of the total sales are from outside of the US. At $24.8 million over seventy eight days, it works out to about $116 million, a shade ahead of $100 million annual run-rate they hoped for when the SkyeBay deal was announced.

Looks pretty good, unless you start slicing and dicing it differently. That’s about $318,000 a day in sales for Skype. Being snarky for a minute, at that rate, the sales-to-deal-price ($2.6 billion) parity will take about 8176 days. Roughly 22 years! (Of course they will grow their sales, I am just having some fun here ;-) )

23 Comments

silentmax

you guys are not thinking about the call center factor. as malik said. more and more call centers are switching from trunkline type operations and into voip. and the number 1 choice right now is skype. imagine b2b clientels. and then you will see their output in the future.

i wonder how many call centers there are in india philiphines malaysia. and soon china?

Jukka

“…eBay must be pleased with the Skype number.”

Or they are simply grasping at any financial metrics that could conceivably (albeit remotely) justify the price paid for Skype.

Charlie Paglee

Actually, the EBay owned Skype for 79 days during 2005, so the number would be $314k. Based on the average number of Skype subscribers durign 2005 this meands Skype probably sold $80 Million in services last year. For more detailed analysis see http://www.voipwiki.com.

anon

So they might grow sales. GOOG just got 2 “sell” ratings. Web 2.0 might not last nearly as long as Web 1.0. It might not even peak anywhere close to as high. Ho hum.

John

That’s actually more than I thought it would be. I know Skype is popular, but their revenue model has always looked shaky to me, especially with free user-to-user calls. It’s going to be interesting to see how eBay turns that rather low figure into something profitable enough it makes us think they made a smart investment!

Sid Yadav

I bet you Skype sales will increase by 150% if they start charging for their free service (maybe subscription-based; $10 p/m?). Of course, along with that, they’ll also get some bad publicity, bad name, online petitions, etc. etc.

A dollar a day for 1 year is better than $100 on the first day and $0.10 from then on…in the long-term that is. And plus, who says voip-to-phone calling is the ONLY way they can legitimately (with their users happy) make money.

Sanjay

Just last week, we converted our India operations center to respond to a skypein silicon valley numbe, cancelled vonage softphone numbers and SBC/ATT lines in favor of paid+free skype services. On top, I’ve had the best quality phone call in two decades to family in India with skypeout. If skype was a stock, I’d buy loads of it. When will it have some effect on the ebay stock?

Om Malik

hey scott, sorry about that… don’t bother, got it what you were trying to say. you do bring up a good point. thanks for bringing that to my attention.

Rishi Khaitan

I found it interesting that eBay mentioned Skype and not their other (bigger) acquisition, Shopping.com, in the press release. eBay must be pleased with the Skype number.

Om Malik

hey scott, care to explain a little but more. i am a tad confused on the point you are making. feeling a little slow today :-) so need a bit of help in understanding your argument.

khabri

318K revenues a day for $2.6 Billion investment ? Any Profits ? So where does eBay Stand ?
$2.6 Billion investment loss.
At the rate of 5% they are losing $318K in profits/month. Oho, well we are a silicon valley dot com and not Google ;)

Scott Rafer

I’ll likely blog on this more extensively as I did a couple months back http://rafer.wirelessink.com/?p=13 , but you are forgetting a lot more than Skype’s quick growth. You are also forgetting that eBay is currently trading at 15.22 times TTM (trailing twelve months) sales. That reduces your number to about 18 months. eBay was trading at around 13 TTM times sales when they acquired Skype. At this accelerating growth rate, the 200M projection for CY2006 is looking ever more reasonable.

moo

If incumbents have their way and start charging Skype, the bottomline might not be that great. And with entire countries and corporates start blocking Skype, the growth rate might not be that great either.

Rick

I looked over their financials in the press release. I wanted a laugh as I read something like “we invested xx billions of cash in a free phone service.”

Sorry, I’m a financial analyst by trade. I can get myself going on this one.

Rick

Om, I wouldn’t annualize that amount for 2005. Skype’s revenues are probably weighted toward the back-end of 2005 as they “ramp-up”. I’m guessing they come in quite short for the year.

Maybe Ebay can make it up somewhere in the next 22 years. LOL!!

Dennis Howlett

‘We’ in Europe have been Skype fans for a while. I can say that I find more US companies prepared to embrace Skype as a way of communication than at any tome in the past. I’d like to believe this signals a greater acceptance of ‘not made here and we’ll try it.’ Europeans are doing smart things, turn your lens in this direction…

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