Forum Moderators: phranque
If Skype (and others) are offering free voice calls without any charges then where do they get their revenue from? Isn't it just like companies providing free webmail (e.g. hotmail)?
I know that Skype charge for calls to landlines - but that seems a bit self defeating. As more and more people switch to free voice over ip services, as more VoIP software hits the market, and as VoIP telephone handsets begin to take over there will be fewer and fewer people needing to connect to landlines.
And isn't there a danger that once BT etc see that VoIP is inevitable they'll decide to group together and produce some standards that will allow different VoIP software to communicate between each other (rendering Skypes first to market advantage meaningless)?
Customer #4: I'd just returned from a business trip to London, and all the cash I had was a five-pound note. Citiwide wasn't able to convert it to dollars, but they did give me four guineas, two crowns, four shillings, and ten pence.Bank Representative: All the time, our customers ask us, "How do you make money doing this?" The answer is simple: Volume. That's what we do.
I think there is more to it than that, but sometimes these business plans remind me of that
Why is Skype worth so much?
In true business terms it isn't worth the kind of sums being mentioned. Nowhere near it.
I don't get it
Because you're thinking about a valuation in business terms.
You also have to consider:-
1. There is a hype value - some people just buy into that - they think it's worth something.
2. It can be a brand builder - i.e. it's "cool" to have it - some people also buy into that.
3. Buy it so the competition don't get it.
Consider the threat that Skype poses to other IM clients (70% of Skypes users use it for IM only - not voice). How much is it worth to AOL, just to bury it and not lose their IM market share?
It's issues like that, whether they make good business sense or not, that affect value. Sometimes you have a unique buyer who's prepared to make a crazy offer simply because the knock on effect of something being succesful, is detrimental to his business. Or to him it's has a "special" value because he can integrate it into his existing business in a particular way which gives him a massive leverage.
TJ
1) Search engines/portals like G and Y
2) People selling stuff (including auction sites like ebay and services such as SEO).
3) Telecoms companies.
As I understand it, Skype is non of these therefore the company will be, ultimately, worthless unless there is some value in any patents they may hold. However, TJ makes a good point...
Some years ago, a senior Hoover manager expressed regret at not buying Dyson's original vacuum cleaner - not because he wanted to build it but because he wanted to kill it (partly because Hoover made a lot of money selling bags).
Kaled.
