Skype fiscals prove it's not the phone calls, but the services

 Parsing Skype parent eBay's 4Q and 2006 earnings reports today, we learn that: Skype net revenues totaled $66 million in Q4-06, a growth rate of 164% over the $25 million reported in Q4-05. The Q4-05 revenue amount represented the operations of Skype from the acquisition date of October 14, 2005 through the end of Q4-05.

 

Parsing Skype parent eBay's 4Q and 2006 earnings reports today, we learn that: 

Skype net revenues totaled $66 million in Q4-06, a growth rate of 164% over the $25 million reported in Q4-05. The Q4-05 revenue amount represented the operations of Skype from the acquisition date of October 14, 2005 through the end of Q4-05.

Skype had 171 million registered users at the end of Q4-06, representing a 129% increase from the 75 million users at the end of Q4-05.

What's interesting here is that Skype's revenue growth is outpacing its subscriber growth. The natural interpretation of that could be that Skype's market for paid services is expanding on a per subscriber basis. More services-not only SkypeIn and SkypeOut but video as well. That'll boost the totals.

Phil at Skype Journal parses the numbers with considerably more detail:

164% YOY growth net revenues

  • Q4-2006 $66 million (91 days)
  • Q4-2005 $25 million (75 days of operations - from the acquisition date of October 14, 2005 through end of Q4-05)

129% YOY growth registered users: More than 380 thousand new users every day in Q4.

  • Q4-2006 171 million, 35 million new accounts in the quarter 
  • Q4-2005 75 million users.

After including the graphic I've reproduced at the top of this post, Phil adds these Skype fiscal factoids:

  • 32 billion minutes of Skype conversation in 2005.  
  • China growth high; try-before-you-buy promotions a hit.
  • Working to improve the quality, so bought Sonorit.
  • 2007 Skype goals: more users, more partners, expanding the product, ease of use, voice quality.
  • eBay-wide goals: better user experience. improving security.
  • Skype Me buttons now in 150 categories and in most countries. Positive feedback from sellers on sales conversion rates.
  • Yes, but what about the inexorable and inevitable move that will likely result in free worldwide outbound calling within a couple of years?

    I think Skype is getting the idea right. It's not the phone rates, its the services.