less contribution :-(

eBay published some days ago the SEC filings. There is - as always - some additional cost data in it, and between others the “contribution”: this is more or less equal to “benefit before paying a management fee to eBay”, see the explanation in a previous blogpost.The “contribution graph” shows a downward tendency, the first time since i get the data! Hmmm!!!!!
Anyway: Skype is still contributing, therefore profitable for eBay!

More Skypers than Computer users?

I am really tired of the false marketing bullshit, nonsense and misleading exaggerated information of Skype! Soon there will be – extrapolating - more Skype users than Computer users, and soon afterwards there will be more Skypers than people on the earth! Ok, monkeys, aliens, and ants can also open a Skype account, I agree! It is clear, they want to make “it” big for potential buyers! (Google? Microsoft?). I begun to complain about that false "users" statement 3 years ago!

In the previous days I watched the reactions to the following claim of Skype: Skype growing by 380,000 users a day.
Some people copied it and said “WOW”, others even extrapolate it to 138.700.000 per year, some very few expressed their doubts!

How does Skype explain that there are only 16 million people online at the peak time of the day, and 8 million at “down time”, if they add more than 100 million users every year?

In fact they know very well what they omit to tell to the Press: it is not “users” but “user accounts” or better “user names” that people should hear. Skype-eBay mentions this on their quarterly results presentations: “Cumulative number of unique user accounts. Users may register more than once, and as a result, may have more than one account.”! Unique "user accounts" is not equal to unique "human beings". This is a huge difference!

Again, let me explain why this “users” statement is false information, and why there are much more "user accounts" or "user names" than people using Skype:

• Some people give it a try and abandon the username (and usage of Skype)
• Some people die (my father last year for instance, or Russel Shaw) and their usernames stay with Skype, no way to delete it.
• People register often several accounts for multiple purposes:

1. They forgot their password and created a new account
2. Somebody stole their account (Yes, this can happen!)
3. They created a new account because they wanted to get rid of some of their annoying contacts
4. They have a work account, a home account, a desktop account, a laptop account, etc.
5. They are professional spammers and create several hundreds or thousands accounts
6. They have a primary account and one or more test accounts
7. They created spare accounts for their kids, wife, mistress, grandma, etc.
   

I have myself registered about 25 usernames!

The question is therefore:

• Is the Skype user base growing? The answer is definitely YES, and faster than ever, but not as spectacular as they claim.
• Is the revenue of Skype growing? Almost not!

x Skype accounts on 1 computer?

I made a comment on running several Skype instances on one computer in my New Years wishes.

And I got interesting corrections from several people. They told me: “type /secondary as a “command line” in Skype.exe”. I had to search on internet how to do it (years I didn’t do that, this is DOS stuff!).

Why is this interesting anyway? Well, suppose your partner has a Skype account, you have one yourself, and your kids have one. Shit … only one computer in the living room, who will run his Skype account? Well, running several Skype instances solves the problem!

Step 1:
Locate your Skype.exe file in (usually) C:\Program Files\Skype\Phone
Right click it, move your mouse to “Send To” and choose “Desktop”:
You have now a shortcut on your desktop.

Step 2:
Go back to your desktop. Right click the Skype icon. Click on properties (the last item on the bottom of the list).
Right click the Skype.exe button:
In the Shortcut tab you see a “Target:" field. Add the following text to it (without the quotes, WITH the space): “ /secondary”.
Close the screen. Done.

From now on, even if you have already a Skype instance running, you can open as many other instances as you want, as long as you log in with another username. In the screenshot below you see 2 accounts running, one logged off.
The only thing I would like is that, when you wander with your mouse over the small Skype icons in the taskbar, that it says which account is using which client. Now it only says “Skype”!

This post is only applicable to Windows computers. I apologize for Linux and Apple users. And, it works only with the 4.0 Skype version.

Why did they do this?

Sometimes I can present numbers, but I don’t have an explanation. Yesterday was the official launch of the 4.0 Skype version. The (40 hours) graph below shows the concurrent users online (red curve) with the typical fluctuations over a 24 hours span and the ever rising download curve (blue curve).However, the speed of the downloads seems to have lowered suddenly and dramatically from about 600 downloads per minute to 250 per minute during a 30 hours time span and back to more than 520 downloads per minute (see the blue dotted arrows that I drew on the screenshot). The change was sudden and unexpected, therefore this was induced by Skype.

Strange also that this happened at a time that we would expect an increase in downloads!

• Could it be that the counting system was temporarily flawed?
• Did they shut down some of their download servers?

I don’t have any clue!

And ... since quite a lot of days, the RSS feed of concurrent users online doesn't work anymore: it shows 0 (zero) concurrent users online! Another flaw?

The fastest million ever

It is the second time in 3 months that I have to use the same blog post title. Indeed, it took only 21 days or three weeks to add another million. I made a very wrong prediction in September last year and believe it or not, I am very happy that I was wrong! This is the first time ever that Skype crosses 4 times a million milestone in a Northern hemisphere “fall-winter-spring” period, or "School Year"! And, this 10 months period is only half way, therefore we could see at least one more million, or perhaps even two! Exciting!

SkypeIn for Belgium?

Often I get the question: “when will SkypeIn be available for Belgium?". I am not Skype Staff, therefore i will probably know it at the same time or later than the press!

Jan Geirnaert is from Ghent, the same city as I am from, but he lives in Malaysia. He seems to like me a lot because he contacted me twice this weekend (see my previous post). I am worried .

Today he asked me to call him on his Belgian number 09298xxxx with my fixed line 09222yyyy. But, I know he is still in Malaysia, and Skype hasn’t added SkypeIn countries in ages! Belgium isn’t available yet!
Well there is an equivalent solution:
I called him, the call was diverted to his Skype account in Malaysia and the quality of the call was OK! I only paid for a local call. He paid nothing for the call itself!

Some price comparisons

• My fixed line in Belgium (Belgacom): 7.50 €/month
• SkypeIn for 3 months (not yet available for Belgium): 5 €/month
• Virtuphon: 5.30 €/month

Virtuphon is available for 39 countries, SkypeIn available for 22 countries only! Dominican Republic, Germany, Hong Kong and Japan are only possible with Skype. Therefore, if we join both, we have “virtual phone numbers” for a total of 44 countries!
[EDITED:] Thanks to the comment of Phil ... SkypeIn also in South Korea, numbers above were adapted.

By the way, Skype seems to rename SkypeIn in “Skype Online Number”.

And thanks to Jan for pointing me to that. I guess he will also blog on it!

Google error?

Jan Geirnaert from Malaysia – famous Skype blogger by the way – told me that when searching for the words “jean mercier skype” it gives a strange result:

We tried other keyword (for instance “Jan Geirnaert Skype” or anything else) or even other browsers and it always gave that small warning “This site may harm your computer.”. When you click on the search result you get a special "Malware warning" webpage saying: “Warning - visiting this web site may harm your computer!” and you get stuck there. Weird. Strange!

No such thing with other search engines. I think they have a temporary problem at Google.

Updated: problem seems to be over!

Last quarter 2008 results

Skype revenue growth is flattening: it increased only by 1.2% in US$, and about 3.7% in €. In the eBay slides they say: “On an fx neutral basis Skype revenue accelerated 5 pts” (fx neutral means “foreign currency neutral basis”). Considering the economical crisis, this isn’t too bad.I am however surprised about the weak revenue increase, because SkypeOut minutes rose by 18%. And SkypeOut minutes means revenue. If most people were still calling (like I do) on a “per minute” cost, revenue should have risen proportionally. Therefore, this probably means that most people call through a fixed price “calling plan”. Could it be that, from an economical point of view, this is a "too low" margin product?More spectacular is the growth of the Skype to Skype minutes: this rose by 28%. The economical crisis could have helped to obtain this, because … this is completely free, inclusive webcam calling! One could however expect some revenue increase from Skype certified products (headphones, webcams, etc.). Personally I think this is dying revenue stream, because certified or not, most webcams and headphones and other devices work with Skype! Why should a manufacturer therefore transfer part of its income to Skype?
User accounts continue to show a quite linear growth. I would have expected a stronger growth last quarter, for the same “economical crisis” reason.

Revenue per user account (or should I say username?) show a decaying tendency. But, as I said in the past, this is a very misleading metric, because it includes all usernames created from the beginning, including “dead” accounts and multiple accounts of one user. Pity that Skype doesn’t publish the number of active accounts!Next quarter could be better, because I see a quite spectacular increase of concurrent users online, and this will for sure influence indirectly the revenue stream.

15 million today

Usually i am the first or second to blog about it. Today, two other fanatic Skypers warned me that I should blog. I was aware, but too busy … 15 million concurrent users online today, congratulations Skype and its users!

So, what is exceptional about this? Not that million added of course, not the 84 days it took to reach the 15 million, but it could be that we add another million before the end of June. In that case it will be the first time in Skype history that we cross 4 times a million milestone in one Northern Hemisphere “school year”.
Anyway, Skype shows a quite strong growth the last months!

First of all, happy New Year to all my readers.

Running two different Skype accounts on one Windows computer is possible, and has been explained several times in the past, see for instance the explanation of “Peter Mad Raven” here. However, this implied that you should have a computer with multiple accounts.

Today I was starting my spare laptop (Windows XP). My Skype didn’t start and I thought: “Hell, the kids disabled the automatic launching of Skype”. Therefore I started Skype (the latest 4.0 beta version) manually. I didn’t notice however that the startup was still going on. And all of a sudden I had two instances of Skype running on “one Windows user id”. I only got a message that I already was logged in, but I could use the second Skype client to log in into another Skype account. Interesting, I didn’t know! I could chat from one account to another on the same computer and even call! Not very useful of course.

But what IS useful, is that it seems to be possible to run two instances (or perhaps more) on one computer with only one Windows user account. So, if your partner has a Skype account, and you have yourself one, you can run both on the same computer without bothering to enable different Window accounts. Does somebody have a trick to make this “automatic” at startup?
[Edited] Thanks to a comment of Edgaras and a correction by Vincent i learned that this is a feature. The explanation how to do it is here: Does Skype for Windows have command line options in Skype 4.0 Beta for Windows?
In fact type "/secondary" as a command-line parameter to skype.exe and this allows you to start an additional skype.exe instance. This is indeed a very nice new feature!

Download decrease … i got it!!!

As suddenly as downloads speed went up, it went down again some days ago. Why? I think i saw the light ;-) due to an almost related comment of "Sugar" on my previous blogpost and due to the duration of this event: exactly 4 weeks. I am almost sure this is Skype induced and most probably it concerns automatic updates of the Windows Skype Client.What can we learn about it? Well, only active users (or real users like Hudson Barton calls them) will get an update. Therefore the difference between the download curve “as it should have been” and “as it was” gives an approximation of the number of active users! From my graph it seems there are 36.7 million active users who accepted to download an updated version of the Skype client.This is really very close to the estimates of Hudson Barton (he uses another estimation method), but it is a lower limit because:

1. probably this concerns only Windows users (not Mac or Linux or others!);
2. some people like myself already installed the updates without waiting for Skype;
3. some people refuse to install the update.

And … in this case the definition of active users should be: all users who have been active in the last 4 weeks!

Download speed increase

Since the first week of November Skype shows an increased download speed. Previously it fluctuated around 500 downloads per minute. Now: 1400 downloads per minute. Almost triple speed since November 5!
I looked at my other data to see if there are other signs, but they are quite contradictory:

• Concurrent users online shows a very strong growth, and we could even reach 15 million very soon.
• Number of purchase orders doesn’t seem to have an increased growth pattern.
• There is since September a downward trend in Skype.com website visits.
  

I didn’t notice any special Skype “event” that could explain this increase in downloads and active users.

What other reasons could explain the growth?

• The economical crisis could be one motivation for people to use the “free calls” from Skype.
• Perhaps the “Obama Election campaign” is another explanation of the phenomenon: indeed some “Obama teams” used Skype, see the Skype blogs: US Elections: Skype gets out the vote.
  

Skype certainly is profitable!

After publishing their Third Quarter results, eBay also published the SEC filings. There is some additional cost data in it. One interesting metric is “contribution”: this is more or less equal to “benefit before paying a management fee to eBay”, see the explanation in a previous blogpost.
The “contribution graph” shows a very interesting rising tendency.

I plotted the graph also in euro (€), because Skype is still mainly a European company. Quote from their sec filings: “Based on changes in foreign currency rates … net revenues were positively impacted by foreign currency translation of approximately $12.3 million (US$) and $46.6 million (US$) during the third quarter and first nine months of 2008, respectively, as compared to net revenues that would have been recorded had foreign currency rates remained constant.”

Even in euro the rise of the last two quarters is very spectacular. How come? Let us quote eBay again: “… revenues are generated primarily from fees charged to users to connect Skype’s VoIP product to traditional telecommunication networks. These fees are charged on a per minute basis or on a subscription basis, and we refer to these minutes as SkypeOut minutes.”. Well, the next graph shows the evolution of SkypeOut minutes …
There seems to be an accelerating tendency in the last 3 quarters!
Another reason for the spectacular growth of contribution could be cost cutting and/or the focus on the revenue generating activities and stopping or putting lesser priority on some other activities, like what they did with SkypeCasts.
Conclusion: after all Skype seems to make it, even if eBay certainly paid too much for it!

The fastest million ever!

We needed only 35 days to go from 13 million concurrent users online to 14 million.

These are my screen shots at 17h55 GMT ...

users, user accounts or user names?

Literally taken from the publication of the third quarter results of Skype:

Skype added 32 million registered users(1) in the quarter, ending the period with more than 370 million registered users around the world.

(1) Cumulative number of unique user accounts, which includes users who may have registered via non-Skype based websites. Users may register more than once, and as a result, may have more than one account.

When will eBay publish the Skype active users? They do it at least for their eBay customers (literally taken from their SEC filings):

Key Operating Metrics and Financial Performance
Members of our senior management team regularly review key operating metrics such as active users, listings, Gross Merchandise Volume (“GMV”), net Total Payment Volume (“TPV”), transaction loss rates, Skype registered users and SkypeOut minutes

Is Skype a tool for calls or chat?

On the blog of Pat Phelan somebody commented “i don’t like being attached to the computer when I am on the phone - I like to do the dishes, and pick up the apartment or office - multitasking! I do use Skype a lot for text chat.”

So, is Skype mainly used for (video) calling or for chatting? Is it still a telephony replacement?

Difficult to say, no official data from Skype, and I didn’t find any survey on that topic! That was also the question that MuppetMaster asked some days ago on the Skype Forums.

On the same Pat Phelan blog, 11 comments were posted, including one of the blogger:

• 5 say they use Skype for calls
• 3 don’t use it anymore
• 2 clearly use it for chatting
• 2 don’t say anything about Skype usage

(Yes the sum is more than 11, one spoke about "calls + chats").
This statistic isn’t relevant of course, and it wasn't a poll!

I will now repeat part of my “forum” answer …

I can believe that some people never use Skype to call. Indeed, some have no microphone on their computer, or have not enough bandwidth to make a decent call, and some are even not interested at all to call with their computer.

The only official data we have is what Josh Silverman said recently: "We’ve helped make video calls mainstream, with about a quarter of Skype-to-Skype calls using video".

Now, let me try a tricky exercise:

• Skype claims to have cumulated 100 billion minutes skype-to-skype calls.
• Therefore last year this was about 40 billion minutes (based on a rough calculation i made).
• If a “mean” call lasts about 10 minutes (my guess), this represents 4 billion calls last year.
• If there are 40 million active users (raised rounded number based on Hudson Barton his guesses), this is 100 Skype-to-Skype calls per active user per year, or one each 3 or 4 days.

Not too bad, IMHO.
My personal case, rough data from the last 6 months:

• about half of my contacts seem to have a webcam.
• i have about 5 Skype-to-Skype calls per month, and in less than half of them i use video.
• i have about 20 chat messages per month.
• the proportion is therefore (in my statistical irrelevant case) 20% calls - 80 % chats.

I anyhow think the discussion is useless. Probably most people installed Skype because they heard about the “free calls + video”. Probably most of these people already had an IM tool installed, and probably most of them now chat mainly through Skype with their Skype contacts!

A lot of “probablies”. If anyone has more information, please let me know.

1 billion downloads …

Today is the Birthday of my oldest son, 22 years. But also today, at about 9h17 GMT, Skype reached the phenomenal number of 1 billion downloads.

Congratulations Stefan and congratulations Skype !!!
Some comments about this number:

• This means about 2.8 downloads for each registered username;
• The current mean download speed is about 500 downloads/minute;
• In the past there were short periods where the mean download speed was much higher than 1500 / minute;
• The last two years the speed of downloads was mainly linear (see the light blue straight line);
• A download doesn’t necessarily mean a "new user", as “old users” also download Skype on “new or other computers” and when Skype releases “new client versions”;
• And last but not least, Skype belongs to the top ten most downloaded applications ever.

[EDITED]Hehe, Skype was also very aware of the 1 billion, because Josh Silverman blogged on it also some minutes after reaching that milestone, but I think I was first: I posted at 9h26 GMT, and he posted on 9h35 GMT! ;-)

About growth speed

Each time that I pretend that the growth of Skype isn’t exponential, but linear or even slowing down, fellow blogger Hudson Barton tries to refute it. See his comment on my last post for instance (yes, aaytch, is Hudson himself)!

Perhaps I was a bit too fast and too rude to answer (I apologize for this), because indeed the last 12 months were much better, than the previous 12 months. But anyway, let me analyse the table to the left, to explain why I still feel I am right. The table shows the top or record concurrent users online at several dates in the past.

The third column is the mean daily (rounded) number of additional concurrent users online at “peak time” for a certain time span. For instance:

• The last two weeks (before September 22), the mean increase was 35000 additional concurrent users online.
• The last year it was 9800 additional concurrent users online.
• And so on.

How do we predict the future? Based on the last two weeks (+35000)? Or on the last 6 months (only +5300!), or on the last year? We can’t predict the future of course, we only can make guesses.

Choosing periods smaller than a year is often wrong for predicting long term growth. Changes in speed in smaller periods can however teach us something about temporary effects (the success of the launch of new Skype features, or the seasonal “Northern Hemisphere summer” effect).

For the long term past growth, we the see that the 2007-2008 season (+9800 users/per day) was very much better than the previous season (+6500). Does this mean that the growth is much faster? Is Hudson right? Could be, but in my opinion, the season 2006-2007 (+6500) was a very bad one compared with the two previous ones (+8300 and +10000), and last year (+9800) was just catching up again.

Only the future will tell, and some signs are very promising: Asterisk, Client version 4.0 (a new beta version will be released very soon), Skype for iPhone, perhaps even multiparty videoconferencing, …

Fall-Winter-Summer growth

As usual after a Northern Hemisphere Summer, the growth of Skype users is again visible. Not that there is no growth in summer, but, less people are working, more people switch their computers off while they are in the garden, or they are traveling and have less access to internet. Therefore, fewer users are online at the same time.

Those summers are very visible on the "million milestones" graph that I published last week. In all the past years, excluding the first year, the dots representing the "million milestones" are quite close to each other (see the brown left braces), except when there is a July-August period in the middle (see the red "summer" arrows).So, what for 2008-2009? I would guess that Skype will as usual add two more "million dots' to its graph before July 2009 (see the Sky(pe) Blue extrapolated dots), going well over the 15 million people online. And I predict also that Skype will reach 16 million concurrent users somewhere around September 2009. But it is only a guess :-)

13 million – congratulations Skype!

So, today, another million mark was reached: 13 million concurrent users online.
After a very strong start in 2008, where two million marks were reached in a very short time span, we had to wait 210 days for the next million. This was the third longest period we had to wait for a million mark. This also means there is still a good and steady growth of Skype users, and it also means most of them are satisfied with the services offered.
But the growth isn't exponential anymore. The graph seems to show a small downward bending tendency.
I hope some innovations will cheer us up in the near future: a genuine Skype client for the iPhone for instance!

And perhaps another side comment: until right now, almost nobody blogged about these 13 million. It therefore seems to be a no-event!