Unprofitable Skype goes to IPO

    To make a company profitable, it’s enough to take 10 kopecks per minute of video communication from a user.

    As it turns out, Skype is the third most popular instant messaging service in Russia, mostly a loss-making company. Unfortunately, the service is gradually gaining popularity, giving today a unique opportunity to make calls and video calls, only once received a net profit for the last 4 years . The company had a chance to end 2009, if not with profit, then at least about zero, but the payment of litigation with Joltid (owned by Skype founders Niklas Zennstrom and Janus Friis) in the amount of $ 344 million nullified the team’s annual efforts.

    Listing the risks that business owners may face, Skype owners put two of them at the forefront: the first, which could not maintain the established rate of revenue growth (on average 57% annually), and the second, could not maintain profitability at the current level (that is, aggravate and already unprofitable). They can be understood. Skype's revenue is based on paying for calls to mobile and landline phones, respectively, the company is faced with the task of further attracting users, as well as monetizing the existing customer base. Currently, Skype has only 560 million users, 124 connected, of which only 8.1 million (1.4% (!)) Take the opportunity to make calls and, of course, pay for them. The remaining 98.6% (just a terrible figure) of customers, including the author of these lines, use the service absolutely free. I’ll note that the revenue of Skype,

    Obviously, first of all, Skype will want to monetize the connected subscribers, however, it is not a fact that this attempt will be successful. As you know, the first fairly powerful breakthrough in the growth of the user base began after the company’s collaboration with the MySpace social network (65 million unique visitors per month). Resources agreed that members of the social community will be able to specify their Skype account in the profile and will be able to call each other, which is called “one-click”. However, these users are rather passive in terms of voice communication, complain about Skype, and are going to break the contract with the social network this November.

    Here, probably, it's time to indulge in fantasies about how much Skype would have earned if it had finally launched Internet advertising in its services. Gotta dust offfrom the forecasts of “Investcafe” for 2011 , according to which the share of online advertising in the global advertising budget will be 14.2% or $ 67.34 billion, and guess how much this money can take Skype. But frankly, the service probably needs to make paid video calls. Moreover, the margin should be minimal, the service will benefit from the volume of traffic.

    Judge for yourself. In 2009, users collectively communicated via Skype-to-Skype video calls 113 billion minutes (almost 2 billion hours) . If you take a penny per minute of a video conversation, this will bring the company about $ 40 million. And if Skype took 10 kopecks per minute (I think that every Internet user can afford such costs: 10 minutes is a rupee), the company would have ended last year with profit.

    To think about this for the company is relevant right now. Because as early as next year, a boom in IT investments in Southeast Asia may begin: India, China, Indonesia, Sri Lanka, the Philippines and Bangladesh. The reason - the appearance of the world's cheapest tablet , which recently presented the Indians. The gadget costing only $ 35 allows you to work with text documents, view photos and video files, and most importantly, use the Internet. According to Investcafe, in only 6 of the above states the number of potential Internet users at affordable rates exceeds 1.5 billion people (almost three times the current number of Skype users). But these people may well do without mobile phones, communicating with each other via Skype-to-Skype video communications.

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