July 19th, 2007
Here's my interpretation of Skype's latest quarterly numbers
Phil of Skype Journal groks Skype-owner eBay’s latest quarterly investor conference call for clues about how Skype is doing.
Om notes the following factoids:
- New Registered Users, 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, Om notes.
- 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.
- Skype revenues: $90 million up 18% vs $79 million in Q1 2007.
There’s some contrary indicators in these numbers. But I think I can provide some insight.
The New Registered Users may be declining slightly on a quarterly basis because the Skype user base is becoming somewhat more experienced. When that happens, there are fewer bewilderments about how to get the software to work, as well as fewer repeated downloads when the Skype software doesn’t work right the first time.
So what about the Skype to Skype minutes down 8%, and the Skype Out Minutes being flat?
I think Skype to Skype minutes are down because the novelty has worn off, and Skype to Skype users are better at working with their Skype. This would manifest itself in less time spent per call getting the connection right and then talking about Skype. Say that jibber jabber took one minute out of a ten minute Skype call.
Maybe with the more habituated Skype-To-Skype callers now just cutting to the chase, that minute saved on a ten minute Skype to Skype call equates to about 10% less time for the call. So maybe now a call that took 10 minutes takes 9? Hey, there’s your 8%.
Just perhaps, the minutes haven’t dropped yet on SkypeOut to non-Skype connections is because those calls are less reliable. With less reliability, phrases need to be repeated or calls need to be reinitiated. Also, unlike the experienced world of Skype-to-Skype callers, there’s the “hey guess what I am calling you over Skype”- “Skype, what’s that” which, I am sure still takes up a minute or so of SkypeOut calls to non-Skypers unfamiliar with what’s going on.
So why the climb in revenues, then? At least in part, revenue from SkypeIn, video, other branded services.
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
