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!

Alzheimer or a Skype mistake?

Yesterday i received the following e-mail from Skype:
Your credit balance has expired. 

=== What are the rules for credit expiry? ===

1. credit expires 180 days after your last purchase or action that used credit.
2. Each purchase, call or SMS message resets the expiry time to 180 days.
3. Unfortunately, if you don't use your remaining credit the balance will expire to comply with normal business accounting rules.
4. You will receive reminder emails 30 days, 7 days and 72 hours before your credit expires.

I don’t contest the rules, although I don’t think the “to comply with normal business accounting rules” is a mandatory rule, and it isn’t a very customer-friendly rule anyway. Lucky for me that my Bank hasn’t the same policy.
And it were only some €-cents left on a spare account that I only use for testing.

What is more disturbing is the “30 days, 7 days and 72 hours” reminders. I DON’T REMEMBER HAVING RECEIVED ANY REMINDERS! Alzheimer on my side or a Skype mistake? I any case there is a justified reason for concern!

Customers' choices

Skype stopped SkypeCasts without previous warning (5 days = no time). Of course this is a total lack of respect of customers and they will loose some of them forever. I didn’t use it, therefore I am not affected, but still … it is a shame, especially “when and how” they announced it!

Microsoft isn’t a specialist either in respect of customers’ choices. My laptop downloaded Service Pack 3, and did reset some of my settings:

• I had changed some standard start-up and shutdown Microsoft noises to something less intrusive (in my opinion), but Service Pack 3 (SP3) replaced them with the original Microsoft sounds.
• And … SP3 also launched – against my will - Windows Messenger at start-up. Eh … I have an account, but my chat and communication tool is .

Apple isn’t better. Each time I download a newer version of iTunes, I have to disable manually the automatic launch of QuickTime.

Small nuisances, but anyway a complete lack of respect of customers’ choices.

5th anniversary and one less

Today Skype exists 5 years. Beautiful age, and although the glitter has somewhat faded away, we can say that until now it is quite a success story, perhaps not for eBay, but I don’t care for that.

350 million users they say, or more correct 350 million usernames registered in 5 years, and often a lot more than 10 million people online at the same time is quite an achievement.

Sadly however, somebody who was very close to me died. Therefore one username – and he had only one - will stay unused, and Skype will have to adapt its inflated marketing numbers: 349.999.999 users!

2nd quarter results

Better late than never, here my graphs concerning the published results of the last Skype quarter. If you want to have some explanation why I recalculate it also in € (euro), see my comments on the previous quarter here.
Revenue continues to rise steadily. Good, no further comments needed.
User accounts also continue to rise steadily. Also good, but see also my previous comments on this misleading marketing trick: user accounts is not equal to active users! Jan in Malaysia also commented on this very recently here.

What seems to be in a downward trend is the revenue per user account:
I am sure the trend would be rising steadily if we could plot the revenue per active user! But it seems Skype is scared to publish that number. Hudson Barton estimates the number of active users to be 32 million, instead of 338 million in his blog here … quite a difference!

No credit card reader … but Skype

I had very pleasant holidays in Brasil (the typo is intentional, in Portuguese Brazil is BraSil). Almost all internet cafés have Skype installed, headphones and webcam. I used it to phone home to Belgium, and to contact friends or family in Brasil. My Belgian cell phone stayed off most of the time. Even for listening to my cell phone mailbox i used Skype, with the numerical keypad to enter my code, and called at almost normal “Belgian” cell phone call prices.

I traveled around by long distance bus, and went from South to North-East. The duration of some rides was sometimes 24 hours. Bus seats are usually more comfortable than economy class seats on international flights!

Bus tickets could be bought with my credit card. Only in the small colonial town of Ouro Preto, i had to run to the bank, retrieve money and pay cash. But ooh surprise …… the guy at the “Rodoviaria” (bus station) checked through Skype with another agency of the bus company (called “Pássaro Verde” – Green Bird) if there were still free seats on the bus! The company has at least 40 Skype accounts! All their usernames end on “pv” and their full name on “*** | PV”. No credit card reader … but Skype!

Skype everywhere in Brasil

Salvador de Bahía, one of the most beautiful cities in Brazil ...

Off for Holidays

Tomorrow i leave for Brasil with my 3 sons, for 4 weeks. This is perhaps the last time i travel with the 3 of them in view of their age (22, 20 and 18). And i go to a country i know quite well, because my kids have the double Belgian-Brazilian nationality, and we have been there several times.

I will use Skype in Brasil in Internet cafés or in the house of friends, to contact my family in Belgium. Brasil is one of the bigger Skype Users Countries.
I don't know if i will blog while on holidays, but i come back for sure.

Skype stops loving MySpace?

I played around with the new 4.0 beta version. It is still very beta of course, but, apart from the ugly or missing things, there are some nice things in it. Especially the first Welcome Screen, where you can test very easily if Skype is working. Very useful for first time users.

But, what caught my attention is that when playing around with the hidden emoticons, there is one missing. The first image (on top) is an extract of the chat window of the 3.8 version. The second image, at the bottom, is the same chat text and result, and the (myspace) code for the hidden emoticon doesn’t work anymore! Is there some hidden message behind this? Is the deal between MySpace and Skype still valid?
And there isn’t neither an (Ebay) hidden emoticon from what i know!

The new version and numbers

Don’t download the new 4.0 Skype beta version (i will not post the link) unless you are an experienced user, because there are some vital functions missing, see here in the release notes.

What I can’t miss is, and it is temporarily (i hope) missing in this version are (between others):

• Ability to turn alerts off
• History
• Contact groups

The new version installation file is is 24.7 Mbyte big, compared to the 21.3 Mbyte of the previous 3.8 version.

What pisses me off, and this is not related to the new version, is that Josh Silverman, CEO of Skype, says in a video where he promotes the new version: “To our community of over 300 million users all around the world, thank you very much for your passion”.

Stop the bullshit marketing talk Josh! You DON’T have 300 million users, you have perhaps 35 million users, that is a big difference, see also my very recent blog post here. Shame on you!

Recognition - thank you Jaanus!

In the beginning i collected Skype data out of personal interest to follow up the phenomenal growth of Skype. Later, i provided my data to Skype Journal, because it was fun to contribute to some discussions.

And, about two years ago i began to blog myself, for recognition. Indeed, you blog hoping that some people will read it.

Yesterday, another blogger made a reference to my blog. It happened several times in the past, but when it comes from the former main blogger and Skype Staff Jaanus Kase, this is indeed the kind of recognition i love! This means at least that some (former) Skype Staff acknowledge that my analysis is often correct!

He was telling the Skype and Firefox worlds yesterday that perhaps Skype has the world record of downloads in one single day, see his post here: Firefox 3 download day on June 17 …

My answer to his implicit question … The maximum number of Skype downloads in a 24 hours period was:

• 1.180.000 on November 4, 2006, or
• 2.700.000 on November 19, 2007.

This is based on my data samples. As it are samples, the Skype download record could even be higher. Only Skype can tell!

So, will Firefox break that record today? Perhaps they will do it!

One good point for Firefox compared to Skype: they release their 3.0 version as well for Windows, Mac OS as Linux. Skype Mac and Linux versions are always lagging behind the Windows version!

Skype User’s Holiday

The beginning of the year begun very promising concerning the concurrent Skype users online. In a speed record of 42 days we passed from 11 million to 12 million people online at peak time.

As my regular readers know, there are some fluctuations, resulting in less people online at:

• “GMT”-night
• Weekends
• National holidays of bigger Skype countries (USA, Brasil, UK, …)
• Christmas and New Year Period
• Northern Hemisphere Summer Period

The graph below represents my samples of concurrent people online since the early beginning of Skype, and it seems we are entering in summer recession.

• The points marked 1, 2, 3 and 5 are the Northern Hemisphere summer periods of 2005 till 2008.

• The vertical line “4” represents the huge outage of August last year.

The next “million milestone” will most probably not be reached before September. This is deceptive. Indeed, the promising “start of the year” mentioned above seems to have been a “one shot”.

All the new “features” added by Skype in the last months, including the number recognition launched some weeks ago were not spectacular enough to attract bunches of new users. This doesn't mean those features were not nice. I would even say the Skype client has improved in the last months: less bugs, more stability, better quality.

Skype continues to grow, this i am quite sure. But not at the same speed as their best year 2006, where almost 4 million “peak concurrent users” online were added! Let’s us meet in September again to witness the 13 million milestone.

Complaining again

I already complained about it in the past, in "Respect my choice": i got an e-mail from Skype for one of my unused user accounts. My language settings for this account are those of the embedded image on the left: English!

The mail I got is …
French.

Why? Does Skype suppose there is only one language in Belgium? In fact we have three official languages, in proportional order: Dutch, French, German. And we have quite a lot of immigrants speaking Arabic, Turkish, English and other languages. Other countries also have several languages, like Switzerland, or even Estonia (some people speak Russian there) and United Stated (Spanish?).

The e-mail of Skype shows a complete lack of respect for their customers concerning language settings and choices! I personally don’t mind, but i assure you some fanatic or extremist people will leave Skype after such a mistake, and not only in Belgium!

Anyway, one good point: i tried to download the newest release of the Skype client, and this time the downloaded version was indeed the newest version.