March 26, 2009 |
Despite of the fact that we keep talking about how Skype is not profitable enough for eBay to keep it instead of trying to sell it, Skype now proves to be growing at impressive rates as a provider of international calls.
According to a report published by TeleGeography, Skype has increased the number of minutes in international calls by huge 41% over 2008 and currently holds a total of 8% of international voice calls. The most important fact about this is that all traditional telephony providers have smaller market shares despite of the fact that Skype is only 5 years old.
Various international voice channels resulted in a total of 417 billion minutes of calls in 2008 and Skype accounted for 33 billion (with as many as 8.4 billion of minutes served via SkypeOut – its paid service that is used by Skype users as a cheaper alternative to calls from one landline phone to another). Of course it is quite understandable that people may want to spend more minutes talking to each other for free (Skype to Skype calls) so they probably talk longer than they do when paying for a call but still the share of paid calls is an impressive 25%.
As someone living in Russia and doing business abroad I know that many people in similar situations rely on Skype for many of our business needs and we pay for call plans to Skype instead of using a traditional operator as they simply cost a fortune here and we also use services like Skype virtual phone numbers to be able to receive calls from people in other countries without making them pay virtually anything at all as they simply dial their local numbers. I know that I constantly pay some of my money to Skype and I know I am not the only one doing so and my guess is that more and more people will begin to do so once they realize such a service exists so I’d expect further impressive growth of such parameters for Skype.
At that we all remember the usual talks about eBay planning to sell Skype because the service does not generate enough revenue to substantiate its existence in the eBay package of products. Yet I’d insist that selling a service that has such a strong position in a huge market that offers further potential for growth is not really wise.
My personal understanding is that while now only 25% of all minutes served by Skype for international calls actually generate revenue, the solution here is simply to figure out how to better monetize those minutes that are used for free. I don’t really think it is totally impossible – like why not make us listen to some ads while a number is dialed if we are not going to pay for this call?
I think the opportunities are unlimited here – the only thing that should be done here is realizing that any service that grows this rapidly and offers a service that is already widely popular and will be growing more popular every day has a potential to achieve profitability if the owner knows how to monetize it. Of course that may mean it will take more time for Skype to compensate the initial eBay $2.6 billion acquisition but I think it’s not wise to sell a service with a huge potential like Skype and watch someone else learn how to monetize it to its full potential.