I decided to check Skype's business model because the digital world today is mainly focusing on applications and software that can be used on cellular device. This is obviously mainly seen on the iPhone or android phones that have suddenly exploded on every service provider. An analyst even held by Ebay basically stated Skype's plan in a paragraph;
"Skype is expected to more than double its revenue to over $1.0 billion in 2011. With more than 400 million registered users currently, Skype’s metrics continue to accelerate as the company further establishes leadership in free and paid Internet-based voice and video communications, with growth opportunities in core consumer, mobile, businesses and platform. Skype’s leadership position has strengthened over the past year, driven by a new management team and the launch of many innovative products." (1)
The money that they make comes from the actual free networks that are set-up. The free aspects of skype are: Skype-to-Skype calling, video calling, chat/im, file transfer. These free features entice people to extend their service into other features that you need to pay for. Now I know that most people won't pay for unlimited calling with Skype because it's more then their providers. But money is also made through advertisments and licensing with other online companies.
These are the four methods that Skype is using to increase their consumer market:
- continue driving new users (by building “communities” or leveraging social networks)
- better promote its paid products (make it obvious, upon registration, where paid products can be found – not buried three levels deep in the “My Account” tab)
- increase revenue per paying user (encourage adoption of revenue services based on calling patterns; continued focus )
- monetize free users via advertising (but be smart about it, do it tastefully and carefully all the while protecting the core business) (1)
(1) : http://voiceontheweb.biz/2009/03/skype-business-model-revealed-at-ebay-analyst-event/
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