Currency corrections

From the quarterly results published by eBay, we could conclude that

• the revenue of Skype grew by 76% year to year
• registered user accounts grew over the same period by “only” 61 %

Therefore we could conclude that the revenue per user account has been rising.

However, although it is owned by eBay, Skype is still a European company. 83% of the revenue comes from outside the United States!

All Europeans know that the US$ has lost an important part of its value the last years compared to the Euro. Or is it the other way around: the Euro has become stronger? See for instance the currency exchange rate charts on Yahoo.

In the graph below, the Skype revenue is plotted as well in € (euro) as in US$.
We clearly see that the growth in € is lower than the equivalent in US$. “Only” 58% € growth year to year. Still a very good increase!

Now, what about the revenue per “user account” in €?
In US$ it is rising, BUT … in € the revenue per “user account” shows a decreasing tendency!
Who told me some months ago on this blog: “there are lies, big lies, and statistics”? ;-)

Updated estimation of S2S min

eBay published its quarterly results. I therefore updated my personal tables to prepare some posts later on.

However, I noticed something weird in the Skype to Skype minutes …

The data in the red ellipse comes from the presentation of Quarter 3 2007 results.

The data below the red ellipse, comes from the current presentation published yesterday.
I looked several times to both tables, and they have the same legend. However eBay upgraded the number of minutes served by a very significant amount, quarter 3 2007 raising from 6.1 to 9.8 billion minutes served, this is a correction of the original data of more than 50%.

• Did they make a mistake and did they correct it?
• Did they improve their measuring algorithm, and did they do a backward calculation?
• Or did i miss something?

[edited:] I missed something, the slide says "Skype-to-Skype minutes are estimated; prior period amounts are updated to conform to current estimation methodology."

Note to Phil

Phil Wolff made some interesting remarks concerning “Presence” on Skype Journal and he asked me a question: [Note to Jean: how does this affect the number of simultaneous users online?].
It is evident that if every Skype User on earth had a permanent internet connection and an affordable device that he dares to leave “on” 24 hours a day, this would have a dramatic effect on “concurrent users online”. See also the review of such a device by Nafcom on his “crap blog” (his wording ;-) : Product Review: Ipevo SOLO.

If we could give these features right now to 50% of the World Wide Skype Users, the 24 hours graph would look like the green curve on the embedded graph. Or if we could provide this to EVERY Skype User, it would somehow look like the red curve. I use here the acceptable guess of Hudson Barton of 30 million “real users” as a maximum. (A "real" Skype user is approximately the same as a user whose presence is detected daily).

Some comments on this graph and the consequences of “permanent Skype connectivity”:

• The fluctuations in concurrent users online today (blue curve) are due to people switching off their computers (mainly at night), or using Skype “only when they need it”;
• Therefore, providing people with “permanent” devices, would smoothen the fluctuations (some people already leave their computers switched on) and would raise the number of concurrent users online as shown on the green and red curves of my graph;
  
• If this happened “today at once”, this would NOT raise “today” the number of "real users";
  
• A lot of people stick to their mobile phone or PSTN line because they want to be reachable 24 hours per day. Therefore, providing “permanent” or “mobile WIFI” devices, could, in the long run, boost the growth of Skype;
• More SkypeIn numbers in more countries would also boost the usage of permanent devices;
• And … more people permanently reachable would encourage other people to join the Skype users cloud (this is the contrary of a vicious circle!).

I don’t think that the “permanent” or “mobile” devices will have a huge impact on Skype users in 2008:

• They are still quite expensive (more than cheap mobile phones), and most people join Skype to have cheap communications, not to spend money on nice hardware devices.
• Besides the price of the device, there is another factor that has a negative impact, especially in Europe: due to all the justified hassle about energy consumption, depletion of petrol reserves, global warming, etc. people are reluctant to leave all their electricity consuming devices permanently on. Therefore, only those people who have Skype Devices as a complete replacement of mobile or PSTN phones will dare to leave them 24 hours on!

Australia loves Skype

I read the following on Special Broadcasting Service (SBS): Skype has up to 3 million registered users in Australia alone.

Of course they mean registered user accounts (see some of my previous posts).

Like i often did, even in the very recent past, let us assume the numbers are however correct, this would mean that:

• 1.2 % of the active Worldwide Skypers are from Australia
• 15 % of the population of Australia are Skypers
• 22 % of the “active” population of Australia are Skypers (discounting people older than 65 years, and younger than 15 years)
• 20 % of Australian internet users are Skypers.

As some people get angry when i doubt about the value of such numbers, i will not repeat my comments of previous posts ;-)

The guilty ?

Hudson Barton made on January 12 some quite emotional comments concerning my latest posts. Funny that he seems to omit to mention that, besides my non scientifically website visits analysis (and therefore indeed highly speculative, i agree), i made a reference to a statement of a Skype Director: We're nearing saturation on PCs he said!

Therefore, i made a speculation (yes, i am guilty, (grin) ) and lucky hazard made that a Skype Director confirmed my speculation. I never said that Skype downloads “reached a plateau”, as Hudson misquotes me. The graph below shows that downloads are indeed rising steadily!I agree that downloads on its own isn’t the right measure to evaluate the growth of Skype. It is however one of the tools or numbers i have to make some analysis together with the main one: concurrent users online (here we agree!). Hudson however pretends that “ "downloads" shows exponential growth”. Well, there i disagree completely. The first 6 months of 2007 showed a linear growth (a STRAIGHT red LINE = LINEAR growth, NOT exponential). The second half of 2007 was somehow erratic. Mainly linear, besides some surges due to promotions. The last two months show again a linear tendency (green “linear” line) with even a lower slope than before.

There is another reason why downloads “on its own” isn’t a measure of the Skype growth: it also depends on the rate of new releases: the last 6 months Skype released only 11 new Windows clients compared to 23 in the previous 6 months. And some people upgrade systematically (like i do!).

No doubt, Skype is still growing, but 2007 was a deceiving year! More about that in later blogposts.

Spain doubles users in 2007

I read the following in TelecomPaper: Skype doubles Spanish users in 2007; counts 4.8 mln.

As usual, let me correct this statement: they mean “registered user names”, not "registered users", and this isn't equal to "active users".

Like i do usually, let us assume the numbers are however correct, this would mean that:

• 1.8 % of the active Worldwide Skypers are from Spain
• 12 % of the population of Spain are Skypers
• 18 % of the “active” population of Spain are Skypers (discounting people older than 65 years, and younger than 15 years)
• 26 % of Spanish internet users are Skypers

Bear in mind that the second, third and fourth numbers above are very exaggerated. Reasons can be found in my previous post on Chinese data.

Saturation

In my last post i made the following guess (see below): there is almost a saturation of Skype users in rich countries, and this is the title of a paper of CNNMoney.com:
Skype Seeks New Revenue Source As PC Downloads Near Saturation. This was told by Manrique Brenes, Skype's director of hardware business development, to Dow Jones Newswires! Therefore he confirms my "Saturation Speculation"!

Focusing on the synergy between other kinds of hardware and Skype, could bring some revenue, but in the short term this will, in my humble opinion, not be very spectacular.

I still believe they should find a way to attract bigger multinationals: this would definitely boost the Skype usage.

Skype growth from … ???

I check sometimes the ranking of Skype website visits on Alexa. Interesting, because you can learn something out of it.First lesson: the ranking of Skype is going down steadily, and this could be again a clear sign of the stagnating popularity of Skype, or, of some degree of saturation. The peak in the ranking of August was due to the outage of the Skype P2P network.

But more interesting is the list of visiting countries: in the top 5, USA followed by some quite smaller non-English speaking countries, representing altogether only about 5% of the population of the USA. Why are they visiting so frequently Skype.com?

In Algeria, Skype is in position number 66 of the most visited sites (way after Google, Yahoo, Youtube, …) and in neighbouring Tunisia in position 114. So, again, why do the people there visit so often Skype … it isn’t a search engine, an entertainment or news site, or a games or porn site!

I checked Algeria by googling on “ADSL”, and saw that Algeria is now making a quite substantial effort in offering fast internet connections. Therefore i guess a lot of people are installing Skype right after they get their connection. Probably this is also what happens in Bulgaria, Czech Republic, and Slovakia.

Therefore, (and this is again speculation) there is already almost a saturation of Skype users in rich countries (where fast internet lines are very common), and growth is now coming from smaller emerging countries were they are now catching up with the penetration of high speed lines.

Skype Forum = real help

Some weeks ago, Bill Campbell, a Canadian of British Columbia, belonging to the last people who crossed the New Year (they are always late in British Columbia (grin) ) contacted me by chat. He is a Super User on the Skype Forum, and he was concerned about the huge drop in the number of visitors on the forum.

I was surprised, because i didn’t have the same feeling. Therefore i checked the numbers.

Well, he is somehow right …On the graph above you can see that since June 2006, the mean number of new topics posted on the Skype Forum was always above 80 per day. The last month it is however dropping quite steadily. But this could be a seasonal effect. I will follow it up.

However, the number of registered usernames on the forum is also dropping.253 new forum users per day in December 2007, and it has been as high as 389 in January 2007! This is probably also a signal of the slower growth of Skype last year!

Another interesting graph shows the mean number of replies per topic.This varies from 1 to more than 100, but the mean value is 4.5.

The Skype Forum is still the best place to get help if you experience a problem with Skype: most problems reported there get an answer from the many volunteers there, even payment problems! Skype Customer support is deceiving everybody by its very slow answers or … no answer at all!

Five Fingers of Death

December 30 was proclaimed “Day of the Download” in Belgium. In fact, this was a protest action against the two main monopolistic Internet providers Telenet (TV-cable) and Belgacom (phone-cable). Unlike neighbouring countries, they both limit the download quantity to about 12 GByte per month.

My way of participating was to run internet TV Joost on two computers at the same time. And at night i looked at an old Kung-Fu movie (see the title of this post). After 20 minutes i realised that this was the same "first" Kung Fu movie i saw in my life more than 30 years ago. Great!

Result of my download contribution: 4 Gigabyte in 24 hours!

My evaluation of this daylong Joost experience, beginning with 5 good “fingers”:

1. It is free!
2. Diversity of channels (news, movies, documentaries, …)
3. Acceptable quality
4. Advertisements are short and not too frequent
5. Easy to pause – easy to start again

The 5 bad “fingers” … :

1. On one of my computers, frequent program crashes, on the other sometimes (but not too often) temporary frozen images and sounds.
2. The visual interface is a mess, difficult to make a fast choice
3. The sounds of the adds were often quite much louder than the sound of the movie or channel watched
4. High downloaded volume (a real obstacle if you have a limit!)
5. No remote control function!

Compared to Skype, Joost will IMHO not be a success story. It is nice, it is free, but it isn’t disruptive. The quality is acceptable, will probably improve, but it will probably always stay behind the quality of DVDs or paid television. If you can afford high resolution flat panel screens, you can afford to pay a subscription to high quality cable television!

Anyway, a happy New Year to all of you, Skype believers and unbelievers, Joost believers and unbelievers, and anybody else!