Blog Post

Skype, Not Growing That Fast

Last time eBay announced Skype-related revenues, it worked out to about $318,000 a day. According to eBay’s first quarter 2006 earnings report, Skype generated revenues were around $35.2 million, or up 42% increase from the $24.8 million reported in fourth quarter of 2005.

On a per-day basis, the revenues turned out to be $391,111 and change. In order to make their own internal $200 million in Skype 2006 revenues target, the revenues would have to hit about $599272 a day. That’s about 53% growth. No wonder, I just can’t seem to get the hefty $2.6 billion tag out of my mind. Just to be clear, these are revenues and not profits.

11 Responses to “Skype, Not Growing That Fast”

  1. Om, let’s just say that Niklas and Janus sold Skype at the right time…;). Remember when AOL bought Icq for $400MM in 1998? They gained users but until today, they still haven’t got any ROI – and probably never will. Not that I am comparing Skype with ICQ in any other way.

  2. bill,

    this is a fairly reasonable metric to look at how the company is doing financially. i mean it is much more reasonable than a company who judges its growth by the number of downloads. how is that accurate picture of their business.

  3. “I just can’t seem to get the hefty $2.6 billion tag out of my mind. Just to be clear, these are revenues and not profits.”

    Just the minutes much cost them at least 50% of their revenues –
    advertising is the only way for them to make money…

  4. I believe the 2.6 price tag was for what I like to call the AAI, the audience, advertising, and integration. This is what eBay wants, an AUDIENCE that Skype well known has.

    Complete that with a contractual business approach with ADVERTISEMENT for free service and cheap devices, it’s a simple money maker. We also have to think of how the services of VoIP will improve and when companies will have to figure how to make money other than per minute usage. This is where the guru’s like Google, MS, yahoo and a ton of other search\VoIP starters are going to have to use their strengths of advertising to the package to gain a lot of their revenue.

    As e-commerce leads and eBay being a innovator in e-business opportunities through auctioning creates an option for the INTEGRATION of VoIP which will increase business speed for more. I am not saying necessarily Skype was the only option but it’s audience is what I believe eBay gained and wanted, which they will adverse to through integration and will be a large competitor against the search\VoIP companies in the years to come if they play their cards right which they are puzzling showing.


  5. And how do they keep their competitive advantage? It’s always been first to market. Now that voip is becoming a commodity, how do they expect to stay far enough ahead in the market?

    Yahoo and Google will kick their butt.