Skype – A recession proof business?

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There’s been plenty written about how Skype was a bad buy for eBay, but lets face it which of us hasn’t ever made a bad buying decision, whether it be stock for selling on eBay or other investments? That’s changing for Skype though, far from being written off as Meg Whitman’s worst decision Skype continues to prove it’s critics wrong by outperforming the rest of the technology market.

Despite the world economy downturn, Skype appears to be bouncing from one high to another and bucking the trend to become more profitable than ever before. This appears to be partly led by users looking for the most cost effective methods for communicating, and not just consumers – businesses too are looking for cost cuts and are turning to Skype.

Today Skype hit the milestone of 15 million users logged on concurrently. In his speech at CES, Skype CFO Scott Durchslag said Skype has been growing about 50% compared to the previous year in almost every metric from minutes, to new users, to revenues.

Skype have also just had their seventh straight quarter of profitability and are pushing ahead with new products which for 2009 include Skype for MAC OS X, the 3 Skypephone, Skype for the iPhone, Skype for Google Android phones and Skype for Window Mobile Devices.

While other technology companies are shedding staff and reining in spending Skype is expanding their portfolio and making money. It’s an impressive performance from the black sheep of eBay’s portfolio of companies.

7 Responses

  1. Skype is definitely getting traction. It’s one of those IM clients that just “works”. I was in a coffee shop the other day here in the US, and I was watching a gal hold a video chat/conference, and it was as easy as pie. She was on a Macbook.

    Just the other day I was pulled into a multi-person chat on Skype.. again, no problem (not that I anticipated one, but historically, using ICQ and others, there were definitely moments of teeth pulling).

    Even with their SMS outbound prices being a little high (compared to MBlox, Red Oxygen, etc.) it’s still a good system that allows you to send messages to anyone world wide, and you can even spoof/edit the “From:” phone number. Handy..

    Speaking of which, on the development side, I’m a little disappointed that they haven’t opened up a raw (or as they call “naked”) API yet.. allowing developers like myself to write a client that stands alone. Instead, the existing API must reside on a machine that has an instance of the GUI Skype client running, and proxy those API commands through that client. Kinda weird, eh?

    In any case, I am developing more applications in the mobile space, and I am not ignoring the Skype channel of communications.. and in fact, it’s currently being integrated into a couple of our software systems now.


  2. I think ebay have been pretty cute in regards to skype.

    They managed to make it underperform enough that they ended up not paying full price for it.

    Now look? its a nice little earner!

    A cynic would say that ebay played that acquisition very well.

  3. Skype has an incredibly bright 2-3 years ahead of it. It’s not so much the it’s a recession-proof business but that it is actually recession-friendly. The recession fits Skype’s busines model like a glove.

    Skype are already looking at $700 million+ revenue in 2009 and if they have another couple of years of 40%+ top-line growth, it will come to be viewed as yet another great acquisition by eBay (despite there being zero synergies).

  4. #1 It’s one of those IM clients that just “works”

    Hell of a lot of bloat in there for a IM client. IRC was around decades earlier and all IM systems since pale in comparison in my opinion.

  5. my son lives and works in Rome
    and if skype worked it would be used, but it drops out and fades.
    ok for misers, or students ,
    but I would rather pay a few quid for a decent phoneline and save the stress and frustration

  6. Gotta agree with Norf, if I ring my mate up on his Skype phone number by mistake I tell him to hang up and I call him back on the landline.

    Everyone’s experience will be different of course.



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