Skype Talks Strategy
eBay reported that their turnover is up by nine percent to $2.2bn on April 2010, a move that in part has been bolstered by last November’s departure from communications software company Skype.
But, like its retail counterpart, Skype isn’t sitting on its technology laurels either, and this week also sees Skype’s Chief Strategy Officer Christopher S. Dean speaking exclusively on how the recent break up between eBay and Skype was the best thing for both parties.
eBay, which also owns the PayPal payments system, is in the second year of a three-year restructuring, part of which involves making its site easier and cheaper to use. Last year saw the online auctioneer sell its telephony business, Skype, at a $1.1billion loss, having acquired Skype four years earlier for $3.1 billion. At the time, this had massive ramifications for both companies, including a drawn out legal battle over just who had the rights to Skype’s innovative technology. What’s more, investors sparked rumours that Skype was not the ‘big money spinner’ that eBay had once lauded them as.
Skype in Numbers….
Christopher, however, in his interview, soon put these concerns to rest: “I do think that the amount of money that eBay paid for Skype was very dear when they bought it, but Skype is on its growth trajectory today and is very much growing into the valuation that was ultimately paid for the company.”
Nonetheless with eBay sticking to revenue forecasts for the full year of $9bn, and with turnover growing by 18% since relinquishing Skype, its easy to see why the critics would come down hard on the Skype model.
“Actually Skype has been an incredibly successful business since we cut ties with eBay,” offers Christopher. “We have 560 million users globally at this stage. We did $713 million of revenue last year, which marks a 30 percent increase year-to-year, and the company’s been profitable for the last 12 quarters.”
Christopher came to Skype in 2008, when the company created both a Chief Technology Officer and a Chief Strategy Officer role for the first time. Christopher’s role focused on driving Skype’s strategic development and over the last two years, his team has been working to lead global business and corporate development that matches Skype’s long-term strategic planning.
It seems strategy is key to Skype’s development, with the software application this week becoming embroiled in reports that it could turn to advertising to bring in added revenue for the company. According to reports, the announcement has come after Skype CEO Josh Silverman admitted that many Skype users don’t actually know about its premium pad-for service, instead opting only for its free Skype-to-Skype calls.
According to Silverman, “It’s challenging to get right as the way people use Skype is very personal but we think our users expect us to do it so we can continue to support free. But it will be done in a tasteful way.”
Skype aren’t alone in trying to monetize an essentially free service, however. Music streaming website Spotify already plays 15-second adverts to top-up profits made by its premium paid-for service; Skype, meanwhile, are unlikely to take a similar tack, instead probably opting for silent banner ads that appear in the pop-up Skype box or the video window while users are making calls.
The issue of monetizing the service is something that has long hung over Skype’s innovative outlook. In the exclusive MeetTheBoss.tv interview with Christopher, for instance, the CSO talk about the rumours that dogged Skype after the reduced sale eBay made: “On its own growth trajectory today, Skype is very much growing into the valuation that was ultimately paid for the company.
To watch the interview with Christopher go here.
“In terms of the influence that has on strategy, our focus remains on the markets at hand, the services we have, how we intend to compete in the market and how we intend to continue to grow and deliver voice and video communication services to millions of users on a global basis.”
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