Skype in the USA

From Jim Courtney at Skype Journal:

"One of the "joys" of being a US-controlled public company is that SEC requires the breakout of International from domestic sales. So today’s 3rd quarter report from eBay provides some information that allows us to look at Skype registrations coming from the U.S.

With over double the registrations from two quarters ago, it certainly demonstrates that the free SkypeOut within North America is probably helping to build some traction but Skype remains essentially a non-US business with over 84% of registrants outside the US.

These result also reveal some other interesting information:

  • Skype has grown to a $200MM annual business; however, it would be a stretch to expect them to his $200MM in calendar 2006. That would require a $70MM quarter. What could drive that increase?
    • Royalties from the launch of new Skype devices such as the cordless phones shown at Fall VON and the Sony Mylo but it’s still early in those products’ life.
    • Increased SMS revenue, especially when driven by programs such as Skylook which will drive Skype Chat messages to your mobile phone via SMS if you are Away or Not Available.
  • Skype’s overall revenue growth is slowing; however, it is still the quarter-to-quarter % revenue growth star for eBay where both auction (Marketplaces) and PayPal (Payments) revenue essentially stagnated (+2%, +3% respectively). On the registrant side, Marketplace accounts grew 5% while PayPal accounts grew by 8%.

Looking at the overall results, eBay has to be a nightmare for financial analysts to figure out and forecast. You have three (or more) totally different business models that have different financing and margin requirements. For instance, PayPal is essentially a financial transaction business that should be compared with, say, credit/debit card companies while Skype is a mix of high margin royalty and low margin communications transaction businesses. However, we don’t get to see the margin breakdown by business unit; that would certainly provide a much better handle on how each of their business units is doing."

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