We've looked at the buzz before.. Will eBay help to build Skype's Blogpulse score? No surprise that downloads apparently jumped after the announcement.

The rumor of Google Talk appears to be rattling the cage at Skype and will shake some egos. This post reflects on Skype's latest PR release which opens the gates on new initiatives. Are they in response to Google Talk? I wrote this prior to testing out Google Talk this evening. I'll let you be the judge.

Party time at Skype over the next week.

...is preparing to mark its second anniversary next week by opening up its platform to anyone who wants to integrate Skype's presence and instant messaging services into their website or application. By opening up Skypes platform to the web, it will now be simple for anyone to connect to Skypes fast growing member base,.... Skype Anniversary Press Release

Underlying the fluff we find two new initiatives that indicate Skype is testing a bolder (or maybe reckless if the news is too premature) strategic direction. Certainly these components support Lenn Pryor's desire to build a broader ecosystem around Skype.

SkypeWeb: Creating a web of availability.

Skype will launch a web presence server solution under the name SkypeWeb. This will be supported in a new client release (we don't know when) which will broadcast your presence data via preferences in the client. Apparently a new bit of code in the P2P network will ping status updates every five second to a presence server. Presence information will be availabie in the form of an ATOM feed which will enable presence updates and also enable contact lists. All list detail is said to be controlled by the user. Thus the Atom feed will push presence data direct from the Skype client enabling contact lists for a circle of friends. The general idea space is good. Details? Client? We don't know yet.

SkypeNet: Stripped down client extends Developer opportunities:

Skype will open up presence and IM functionality to the whole world under the name SkypeNet. It's unknown whether this will include file sharing. SkypeNet is made up of SkypeLite clients --- a headless Skype client, without user interface, that can be integrated into any application. This should let you build Skype servers and web services. It should help Skype become enabled in programs like Trillian, make Skype more interesting for online game publishers, and create opportunities for business applications that need to scale. This is a huge gap in their architecture and, depending on execution, SkypeNet may fill it.

Some of the PR announcement is fluff. Skype has done a tremendous job of building and growing a software platform. Still, the combination of big deal buyers (Murdoch billions) and bragging on registered names (51 million) doesn't sit well with me. It hides the plain truths. Skype at two is still an upstart minnow. It's achieved much. Year One saw the launch of P2P telephony that just worked and free conference caling. Together these reinvented telephony. In Year Two we have SkypeOut, SkypeIn and the SkypeAPI and Skypers who want to do more with Skype. Today Skype has a global following in the 10's of millions talking for billions of minutes.

The industry clearly needs some metrics. However apples and oranges examples isn't the way to do it.

Skype's minutes served are currently flat. Active users are stalled. Releases with substantial features - voice recording, - call forwarding, work groups, contact lists, all seem to be coming along very slowly.

What is slow? From a developer's perspective progress may be very fast. However, from a Skype user point of view, many are now using Skype as a super telephone replacement, often for mobiles, so we expect all sorts of complex new features to be available. They are standard features on other systems. Now Skype adds these two initiatives. Expectations for Skype's next major client release are growing. We want it all and yet, two years after Skype first launched, I still can't do the things with it I dreamed I would like to be able to do.

So, Skype, please don't put your credibiltiy on the line with stretch announcements. The meme is still spreading because Skype is inherently good when I can talk to one or more for free. However, nothing kills a meme faster than the smell of desparation or an empty store. Telling me about presence servers and stripped clients is not the same as delivering them to me. The developer community has provided many gifts. I just hope when you blow out the two candles this week our wishes come true.

I had an interesting discussion a few days ago. One of those rambling international ones with a fellow who like me has watched Skype from the beginning. I jotted a few notes down, ideas and points that were made or fleshed out.

• Skype 4 Million Active Users Online
• Is Skype Netscape
• More than Buddies
• Free Calls
• Voice Differentiator
• Developer Program
• Skype Video?

Skype 4 Million Active Users Online

The Skype client shares how many are online. Currently I see just over 2.5m. Before the summer arose, we saw this number peak around the 3.25m point. The numbers have been at best flat or declining since then. So if Skype numbers are soft and college kids return to school in September, then we would expect a jump. Conclusion: if Skype is at less than 4 million users online by end of September then somewhere we have all miscued on growth. In that case, Skype may rush video to market to bolster numbers.

Is Skype Netscape?

Microsoft ignored Netscape for a good year, then turned everything around to kill it. Microsoft's IM client sucks. Skype is not Netscape, and there are several voice/IM clients in the play today. Yet, some believe that Microsoft can still turn the corner on Skype. Here's their challenge. Skype, unlike other IM replacements, has created a new "collective" cross-platform buddylist, including phone numbers and people that had never used IM before. The shaping of these new buddylists are now well underway. The more numbers, more names and more buddies people have on Skype the more difficult it will be to jump back to an old client. I have to move the majority for it to be successful. Otherwise I am again using dual clients. Unless there are new features that materially affect the way I work or socialize, the desire to shift won't be there. Just look how long people stuck with the old telephone.

More than Buddies

In my case I have over 250 buddies/numbers on Skype. I never collected the same number (or even came close) on any other messenger system. I'm sure it is an extreme (although my SmartPhone mobile has even more contacts in it) Migrating back to an old IM system even an improved one will not be easy. Add to this hardware (like RTX dual-phones) say $150 in misc hardware that one buys over the next year. Will that work with the new IM system? Will I have to write it off or will I be able to download a software upgrade that will allow it to now work with another IM system. How long will it take the manufacturer to catch up? Hardware represents a potential psychological lock-in.

Free Calls

Voipbusters is providing a free calls almost anywhere service that I reported on last week. Skype isn't working hard enough to reduce call costs. On the one hand, one voice in me says that isn't necessary and why antagonize Telecom's further. The other voice shouts "Free" is a fundamental part of the business model. So how does Skype make all my calls free? How does Skype reduce my broadband cost to zero? Is this an advertising mechanism? Does Skype empower me to sell some data? How can Skype create a better conduit for information exchanges between buyers and sellers? Can Skype more economically deliver the mail.... so to speak? Skype's economic opportunity is to reduce the cost of connecting to the net to free. They are getting there on interconnecting (PC to PC). If Skype doesn't do it the next new entrant will. Does it make sense? Should one use subsidies from one industry to fuel the growth of another? Why not?

Voice Differentiator

So far the only real differentiator Skype has had is voice. It's that part that really made the difference. While firewall busting and installs are important it is the stickiness of voice that created Skype and keeps it growing. However, we've seen no real advancements in voice since Skype launched and GIPS provides the majority of the audio solution. It's now been duplicated and adopted by others. So where is Skype's innovation? Where is the next generation features that will be harder to duplicate and more compelling? I'd look to presence and location information. Concurrently, identity - profile provide an interesting possiblity for leverage. The challenge will be how to enable and gain consumer trust.

Developer Program

Cynicism around the developers program remains. This may stem from Skype's willingness to do deals with "big names" e.g. Motorola, Logitech, Plantronics, (even when some of them have yet to launch a product) and yet completely ignore the small companies and individuals. This leaves one to wonder where it leaves a company like VoipVoice who make the CyberphoneK and provides one of the best software API integrations for usb hardware. It would appear inevitable that Skype just absorbs their plug-in and builds it into the product. Thus any Skype certified hardware device will be supported.

Skype Video?

It may be a question of when. It may also be a question of for what? Will Skype Video be limited to Windows only? Have they choosen a codec that will enable video to follow into OSX, Linux and Symbian? A video solution that stops at Windows won't have the same impact.

Skype hasn't told us important information about their numbers. This hurts our ability to interpret them (not that we'll stop trying). Continue and see our letter to Skype.

Dear Skype,

1. Have you always measured "minutes served" the same way? Or has the data collection changed?
   
2. Does a 5 minute conversation among 3 friends = 15 minutes served? Or 5? Are they "person-minutes" or "conversation-minutes"? If one of the friends is only on for 2 of the 5 minutes in the call, do you report 12 minutes served (5+5+2)?
   
3. Are you including fractional minutes? Your contract says you bill 64 seconds as one minute and 65 seconds as two minutes. Are you counting "minutes served" this way too?
   
4. How do you get your data? Are Skype clients pinging you as they enter and exit a call? Or do they ping you during a call, a keep-alive ping? Do all pings get through; are you scoring 100% of the calls made p2p in the network?
   

About the number of people on the network at the same time:

1. Why do I see a different number than someone else in the cloud?
2. People log in or log out all the time. How long does it take for you to learn of this action?
3. What happens when someone just kills their Skype client, not politely changing their presence. How long does it take for my absence from the network to reach you?
   
4. It takes time for the cloud to propagate data. Are you getting this data equally from all regions in the world?
5. Dial-up users come and go more frequently than midband users. Do you have any way to distinguish dial-up presence from others?
6. If my presence is set to "invisible" do I still show up in your numbers? If my presence is set to "away" or "do not disturb"?
7. If I have multiple identities / instances of Skype running on my computer, do you count each of them, from the same IP address? Are you counting Skype IDs or people?

If you spell out your methodology, it will help the news and analyst ecology to get our stories right.

Average number of minutes used per day according to James Enck. Now where have they gone???

Average minutes of use per day

• Jan - 28,954,133
• Feb - 37,533,906
• Mar - 41,745,885
• Apr - 41,732,959
• May - 39,451,552
• Jun - 38,479,729
• Jul - 35,754,556
• Week of 12 - 19 Aug - 36,601,232

EuroTelcoblog

Om posted interesting numbers last night suggesting Skype growth has slowed. I'm more inclined to believe they provide some insight into the evolution of the community.

Om comments:

I managed to get my hands on some data which shows that the growth might be “really” slowing down, and that is perhaps one of the reasons Skype is out shopping itself. For instance, active users dropped 19% from April to May 2005 in the US, while France and Brazil had no growth during that time. UK and Germany grew at low single digit levels for that time frame. The overall active user base for Skype grew between 35%-to-50% from Q2 2004 through Q1 2005, but in the Q2 the numbers dropped to around 7%. Q3 is showing similar downward trend. Gigaom

Apart from definitions (What is an active user? Last seven days vs. 30 days would make a huge difference. Is "active" available for a call?) I'd like to see this data on a weekly moving average.

I’m also not convinced that a slowing growth rate means it’s all going backwards. It’s difficult to convert new people. I spend very little time getting new Skypers on board. Yet in the beginning I worked hard to get key members of my network using it. As the base of users grows, the “newbies” struggling to build up a buddylist are less visible in terms of impact --- on infecting others. As a result, growth percentages will decline. Their incentive to infect others also declines when there is a large immediate community ready and available to connect.

The numbers suggest that users for more than, say, three months aren’t adding new buddies to their lists; rather they just add more people already in the Skype community. At some point in the growth of your buddy list there just isn't the same same incentive to find new Skypers. Add SkypeIn and SkypeOut with a big buddylist and converting others becomes even less important to those heavy users.

As an observation and hypothesis. For many, a buddylist of 25 may seem perfectly adequate. The ultility and behavior changes when buddylists expand exponentially. I doubt the number of calls and time in a call grows exponentially with a doubling or tripling in the size of your buddylist. You simply couldn't cope. However more buddies means Skype is more sticky and more useful.

How big is your buddy list? When is the last time you introduced someone new to Skype? Go on. Convert a new Skyper today!

Hmmmm.... Five million new registered users in the last three months? No big deal. In fact if I was running Skype I'd be concerned if I didn't know already that the registered user number is grossly overstated. In gross terms this is the way the IM industry appears to count. Even then I'm not sure the players count apples and apples. For example in Yahoo you can have more than one alias on one account. How many registered users is that? In Skype each name is counted as a different user. In real terms like the downloads it's just another fiction. Here's why.

When we look at the last three months we see approximately five million new registered users. Cool, they just broke 50 million. Growth has apparently slowed. Skype added only 10% in the last three months. So what is this five million number comprised of. What does it mean?

1. Legitimate New Users. These people are new to Skype have never registered before and are just getting started. A percent will download and forget it after the first few experiments. I have no figures on abandonment. What would it be? How many percent over the first six months? 10% or 50%? Perhaps 10% even before they make a calI and 15% before the second call. (Part of the no buddies connundrum and no free minutes). So the conversion loss could be quite high. Users install to satisfy a friend or family member. Others add it and then don't get enough of their social network across. It's a hard life for a new user. Skype knows this and has added all sorts of features to help. Import contacts, toolbars etc. The more contacts / buddies a person has the more power the application provides.

2. Aliasing: Many users want more than one name. Each registration counts as a new one. The fact is for the most part users aren't running these as multiple lines on multiple computers. They log in and off. They may use one for SkypeMe and another for more legitimate business. I've lost count of how many names I've registered. I'm not alone. Most of those names are idle. I'd think most new users will over time end up with at least two names.

3. Name churn. My daughter churns her AOL name quite often as do many of her friends. It's a way of cleansing their buddylist. The more youthful Skype's appeal, the greater the likelihood that "churn" has an impact. While I doubt 1 in 10 users churned their name in the last three months, given the base (45 million) churn could now have a significant impact on the growth of new registered names. Thus the larger the Skype user base, the more churn in new registrations we get.

Now there is another way to look at the 5 million new registrations. If we saw five million new users then at a minimum we would say we had added 10%. If all else remains equal then we would expect the number of active users online to have increased similarly. At the end of May the daily peak for active users concurrently online was consistently through the 3 million mark and I think reached approx 3.25 million. Since then, growth of active users online appears is static (at best). That means the number of new registration is significantly lower. Alternatively, many abandoned Skype in the period.

Separately, don't underestimate the impact of summer, college kids at home, perhaps less access to broadband. Skype surged last September and I'd expect it to surge again this September. Plus some Skypers share an account. So that's one registered account but two Skypers. A number Skype has been releasing that does matter is the number of SkypeOut users (round to 2 million). A good portion of those are using it daily. Separately Skype has quoted that 30% of Skypers use it for business. So they are online all the time too.

In the end it's all guesswork.

Conclusions:

1. Nowhere near 5 million new Skype users have been added in the last three months.
   
2. The registered user number does not represent with any degree of accuracy actual Skype user numbers. It is more materially wrong than right.
   
3. Many factors account for the difference, behavior, peer groups, legitimacy, size of buddylist, SkypeOut,early experiences, etc.
   
4. My number on unique Skype users last seven days would be 12.5 million tops. I'm happy for Skype or you to prove me wrong.

Finally the only numbers that matter is the number of users that have conversations and exchanges each day. Be nice to know how many actually held calls and how long those calls lasted for. The health of the community is in the numbers. The 50 million may make it seem like Skype is the gorilla. In fact Skype is still an ant and the definite underdog. People like underdogs. Perhaps Skype will come clean and report more representative numbers. Unless of course they are trying to sell.

Niklas Zennstrom, the company's co-founder, estimates that 30 per cent of its 40m users are corporate. A lot of the companies using it are small and medium-sized businesses that are saving money by doing do.

Financial Times

Stuart Henshall, Skype Journal's publisher, posted his Grade "D-minus" for Skype's developer ecosystem. I think it's too harsh. Slightly. I give their developer program to date a "C".

Two reasons: My metrics biases are a hair kinder. And I cut Skype a lot of slack for their small size and tender years.

"Doctor, the labs are in."

Out of a gazillion things that describe the state of an independent developer ecosystem, which do you check? What labs do you order? [No, seriously! Which ones?]

Generally, you model what you want the system to do. You diagram the states and flows. Then you seek out metrics that sense general system health, that help diagnose problems and prescribe solutions.

In this case, you want a large and vital business ecosystem. It's many outside developer subcommunities, several subcultures within Skype, and the processes you design and deploy to keep virtuous cycles going.

Some of my favorite measures...

1. How many communications has Skype initiated to ISVs (Independent Software Vendors) this month? Include calls, chats, email, visits to developer-focused web pages, etc.
2. Number of registered individual developers. SkypeAPI knowledge and talent live in the conversations among developers.
3. Number of registered individual developers who put the Skype API on their CV/resume.
4. Number of registered developer companies.
5. Number of signups on the main developer listserv (is there one? are there focused ones for each product?)
6. Days from time new feature is announced until an API is published
7. The existence of draft APIs and public forums for discussion of those APIs
8. Number of developers with Skype tattoos
9. Percent of Skype's in-house developers blogging in public

We seek qualities like vision, heart, strategy, transparency, growth, trust. Operational competence, execution, responsiveness. I think a lot of it is there, but shrouded or repressed.

My sense is the problems are those of young adulthood, in the organizational sense.

For example,

Message Control Freaks. These are "clueless" marketers, in the Cluetrain Manifesto sense. They stifle communication across the corporate firewall. They focus on message compliance instead of dialog. Every company needs people like this, but stronger voices in opposition must prevail.

BizDev-Driven Engineering Priorities. Money talks. So do wealthy partners. Do partner needs really match those of your core audience? Are they pulling for elegance and simplicity? Or for feature overkill? Again, balance counts.

Balance is a sure sign of organizational and managerial maturity.

Skype Technologies is not yet Grown Up

It would be great if we could index for corporate maturity.

A story: When I was hired to train and certify computer dealers by Compaq (employee 56), it was part of a comprehensive strategy to develop an independent reseller channel. Two rungs up the hiring chain from me, Compaq hired the best people they could find who had similar experience selling hardware through reseller channels. A few came from IBM but most were execs at copier companies.

These guys knew everything about keeping dealers happy.

• Lots of information.
• Point of sale support.
• Terms and conditions.
• Inventory and order management.
• Scarce model allocation.
• Co-branding.
• Cooperative advertising.
• Margin creep.
• Territory density control.
• Education and training.
• Rewards and recognition for everyone involved in the dealership, from junior service techs and sales people to managers and integration engineers.

They hired the people and built an organization who could roll-out a channel into major US markets in a year, into world metros in two.

Compaq also had to convince software developers that it was IBM Compatible, that their software would run. Compaq wouldn't have launched successfully if Lotus 123 hadn't launched at the same time and on Compaq's first luggable.

So Compaq mounted an aggressive phone and advertising campaign to recruit software developers, to convince them to test and certify their software. It worked. We published thick directories of compatible products. These directories went to computer buyers and to the dealer channel, because software sales sold computers.

Applications sell platforms.

Skype is like that first and second year of Compaq. Scrappy founders. Growing so you don't know everyone anymore, or even ("we have a department for that?") what they do. The culture of adrenaline. The overwhelming number of demands on time, the proliferation of choices. The sudden fame by association.

I was at Compaq when they grew through this stage. It's a tough phase. People make lots of mistakes because they're making lots of decisions. You just hope you know which ones are key and that you take an extra beat to choose well.

At this time last year, Skype was half the size it is now. In fewer locations. Each time headcount doubles, they will have new organizational and operational challenges.

So I'd give Skype's Developer Ecosystem a "C"

On an absolute scale, with 100% being world-class performance, I give them a "D" for the first six months of 2005. I concur with Stuart's rating of the developer program. They've made more than their share of errors. The effects have been expensive and painful for developers, and have sown fear, uncertainty, and doubt.

But remember they are a small company. Microsoft and IBM and Sun are a hundred times larger than Skype. And they've had a generation to build and optimize their independent developer programs. Skype is just staffing up its developer program, and they seem on course. So I bring their grade for the half-year to a "C". Better days ahead.

Skype issued a press release 8 July: 130 million downloads, 30 million more since April. Is this news? Many (most?) must be upgrades. Better for Skype to report more meaningful numbers:

• number of accounts,
• number of SkypeIn numbers,
• number of SkypeOut calls made,
• number of SkypeOut minutes served (total and per capita),
• number of affiliate sales,
• frequency distribution of languages people choose in their profiles,
• moving averages and peaks of simultaneous users online or in calls,
• number of text conversations.

These measures suggest the health of the Skype community, the use of Skypenet, the revenue of Skype Technologies.

30 million downloads in 45 days may be newsworthy, but explain it better. Were they from some countries more than others? How many were referred by Skype's new portal partners and which ones? What proportion were upgrades by users wanting some of the new features which came out in versions 1.2 and 1.3?

And how about some context? Are 130 million and 30 million downloads big numbers? WinZip 9.0 was downloaded 146 million times. 30 million is a little bigger than the population of Iraq, a little smaller than the population of Canada. Australians buy 130 million books a year, 130 million Chinese take the train, and American hunters kill 130 million animals. Is 400,000 a day a lot? Download.com reported the new WinZip 9.0 was downloaded 380,213 times in one week.

This news release's real significance is (a) that 130 million is the highest possible number of Skype users if everyone downloads just once and (b) someone will take more than five minutes (the time it takes to shine a pair of shoes) to write the next one.

The statistics and the quotes change slightly. In this FT article 5% of 40 million registered names are paying accounts for Skype. That's 2 million paying customers.

Mr Zennstrom says 5 per cent of Skype members now use one or other service. He says the company is working on other paid-for ancillary services but wants these to be unobtrusive. If anybody simply wants to use Skype to make free calls to other Skype users, that is what they should be able to do. FT.com / Business life

John Bosnell at Point Topic provides the latest round of who dominates the voice market. We learn soft phones dominate the VoIP market today with a 37% share according to his estimates. According to his figures Skype thus has approximately 35% share of the VoIP market worldwide.

More than 11 million people worldwide were using a retail voice over IP (VoIP) service for at least some of their telephone calls at the end of March 2005, according to market research group Point Topic.

The number climbs to just under 17.5 million users when 'soft-clients' like Skype and VoiceGlo are added in, according to John Bosnell, senior analyst at Point Topic. InformationWeek

Skype has an online survey up. It's all about habits and practices - but there seems to have been little thinking on and stretch in terms of options, scales, wants and wishlists. It's not well designed, poorly structured, with many gaps in areas covered, and no real behavioural information being collected. A wasted opportunity!

Just because online surveys are simple doesn't mean they shouldn't be well thought out. It's also more dangerous to have information that is incomplete or poorly collected than to have no information at all. Unfortunately many organisations fall into this trap. There is down and dirty research -- this is not it.

Breaking down the survey to understand the gaps further, there are problems in several areas :

1. Areas of Coverage :

* No demographic profiling - age, gender, income, etc - to contextualise responses

* Inadequate coverage of Skype's offerings - what about conference calling, chat and multi-chat, Skype on PDA's, Skype API, forums - areas of satisfaction and problems with them? For instance, how many have made a conference call with SkypeOut - one problem could be tackling DTMF tones

* No behavioural information of depth and value like buddy lists, minutes and hours spent on each feature, how many failed calls, what percentage is acceptable, what percentage local vs international calls, whether Skype is set to a call-centric or chat-centric mode, etc

* No developer products included : video chat, presence servers, outlook import, other plugins. These form a vital part of the total offering from a customer's point of view, and make the Skype experience richer - it would have been interesting to study awareness, usage and motivations for them.

* No feature comparisons with other products competing in the same space from a user's perspective - IM, other VOIP offerings, even landlines and cell phones - resulting in answers in a vacuum without benchmarks and best-in-class standards that always make responses so much more reliable and meaningful, particularly when satisfaction is involved. For instance, would you say your Skype billing experience is better than or worse than your current cellular provider? Landline carrier? Amazon? Other? NA? What's your best billing experience online?

* Very little space offered for opportunities to improve

* Even less on what Skype really means to users today and how is it changing the way they communicate, impact on their communication behaviour and habits.

* Branding and positioning issues - how is Skype positioned in the customer's mind? What associations, what image, what relationship, strength of stickiness and loyalty? I know Skype is beginning to think of brand - and that's a great step. I also hope that they remember the brand is not just what the company communicates, but as it rests in user's minds and hearts and leaves it imprints. I'd have loved to see some brand-related questions here.

2. Questionnaire design and structure:

* Options and choices (dropdown boxes) provided seem inadequate in most areas. The connection speed options are not customer friendly. Reasons for using don't include - for business, for travel, for connecting with family abroad etc. Another instance:

Why did you start using Skype Voicemail? (check all that apply)

Thought it was cool

Wanted to save money

Wanted to call people abroad

Other

These options make little sense in the context of voicemail - none of the potential reasons for using Voicemail are listed in the options. It seems like these questions have been dumped blindly from the earlier SkypeOut section.

* Areas for improvement in all sections are left as an open-ended space; some amount of stimulus for thought might have been provided for generating more meaningful suggestions. For instance, for Voicemail, there are so many possiblities - from saving copies to sending group messages or not having to listen to your message for the 5th time when sending.

* Scale used for satisfaction - the 3-point scale : very satisfied-satisfied-not satisfied again doesn't really offer up much - first, there aren't enough gradations to really determine satisfaction to make it a good customer service scale and second, satisfaction must always be measured against perceived benchmarks, without which it can be meaningless.

Nope there are no degrees in Skypecology. It's not old enough to attract anthropologists and Skype psychologists aren't exactly in high demand. Still Skype needs a new release to coincide with going back to school. It also needs to do some deals with the likes of faceplace.

Skype's overall strategy remains "number of registered users" actively using Skype. Active users online has effectively stalled. Growth won't return until September when kids return to colleges and universities. Then we'll see a huge jump.

It was the same last year and it's logical. Student have broadband on campus and may not have it at home. Also some of their Skypeing may have well been to home.

The question is what surprises will Skype have coming for back-to-school?

Living the Skype Life

Does anyone know Roxy's Skype name?

engadget: Use DittyBot and Skype to access your iTunes collection from any cellphone (Mac). It works, but Om says you can buy an iPod for the same price as the added mobile minutes. DittyBot (cute name, cuter character) is another example of the willingness of customers to make their own features.

Russell Shaw explains 15 common Skype error messages.

For your inner Quant

The latest Skype stats:

• Total Skype Downloads: 122,320,159
• Users Online Now: 3,014,635
• Total Minutes Served: 9,947,864,820 (should roll over)

For contrast: 64 million Firefox users

Researcher Sandvine says Skype users rule North America.

• Skype users account for 35.8 percent of individual callers on North American networks.
• Skype calls account for 46.2 percent of minutes used.

also...

• Cape shows Skype now synonymous with voip, at least in the blogosphere. Poor Vonage.
• Skype is filling the void left by broken email.
• Xandros is adding German and French desktop Linux versions (with Skype inside). Skype's also shipping with the English and Spanish versions. When Skype is bundled with the operating system...

vSkype multiuser video chat free Beta release shipping now. See Bill Campbell's product review and exclusive interviews.

IPdrum promises a bridge between net and mobile phones later this summer. "Patent-pending technology to connect traditional mobile systems with Skype." Wholesale service or retail? via Engadget.

Skype voicemail came out of beta. New feature: Voicemail customers can leave voicemail for any Skypers.

Security? Om Malik re-voices concern about Skype crossing firewalls.

Skypes To The Editor: Online publication MSmobiles.com uses Skype for reader feedback. Leave a voicemail with your comments.

What's Your Skype Strategy? Blast from three months ago.

Coming this week:

• Supernova 2005 Conference. San Francisco. Stuart Henshall and I will see you there.
• Philadelphia Metro Telecommunications Enthusiasts Group Meetup. First meeting.
• CPSN'05 - The 2005 International Conference on Computers for People with Special Needs. Las Vegas.
• Internet Law 2005. The Berkman Center for Internet & Society at Harvard Law School. Cambridge, Massachusetts.
• Gnomedex 5.0. Seattle.

By Jean Mercier, Ghent, Belgium, Monday June 1, 2005

Some weeks ago I searched a way to record the users on-line without staying awake the whole night. Perhaps this is possible with the Skype API and some programming, but I am not a programmer anymore! But I found a trick ... View image

Some time ago I found also interesting data concerning the Skype Users by Country.
Of course Users on-line peak around 17h GMT+1 (means 16h GMT), because according to the Skype statistics more than 42% of the users are Europeans located in the GMT 0, GMT+1 and GMT+2 time zones. At the same moment the USA, Brazil and Canada and some other American countries are starting to work!

There is also a "dip" in the curve between 12h and 14h GMT+1! Could it be because a lot of Europeans are leaving the office to lunch, and log-off their Skype? And could it be that the other "dip" in the curve (around 6 AM) has something to do with the Americans (South and North) going out to lunch? Pure speculation, but if somebody has another explanation, I am willing to discuss it.

My curiosity did not

stop there. I recorded the data for a whole week. Here is the View image">chart:

I cheated for the data between Friday and Saturday, because Bill (not Campbell but Gates) decided to shut down my computer. So i had to complement with data of the following week.

Interesting to see that on Thursday and Friday the Users on-line begin to lower. And of course much more on Saturday and Sunday. This clearly indicates that Skype Users are mostly professional adult users.

And it begins to lower already on Thursday and Friday because some Countries (Muslim and Jewish religion) have their days off on Thursday, and/or Friday and/or Saturday, instead of Saturday and Sunday like in most "Christian" based cultures! But this is my personal guess!

What strengthens my opinion about the European and American lunch-time dip of the first graph, is that they clearly disapear on Saturday and Sunday: people are mostly at home!

Using the data of the above mentioned link about "Users by Country", and just for fun, I distributed the Skype Users in their respective time zones. For some countries I had to make an estimate and distribute them over several time zones (USA and Canada). Next I made an assumption: every Skype User is "working" during a twelve hours period on a computer! I plotted the data on a "24 hours chart" and I became this ...View image

Look at the similarity between this graph and the first graph of this Blog!
The discussion is open ... don't hesitate to post different opinions!

Could I be missing something when others query Niklas's cash flow claim? Is it too simple to look to the invoice numbers we quoted and looked at the other day. The chart is here.

Although subscribers only pay a few euros, these revenues would help to make the 2-year-old start-up cash-flow positive this year, he said.

"That's the case," he said, when asked if his company would be cash flow positive in 2005. The company has not yet given any indication about its profitability. Politics News Article | Reuters.com

My lastest order number on May 24th was 6523135 for an additional SkypeIn line. The day before my order number was 6515443 for a Euro 25 SkypeOut credit. Not 24 hours apart.

I had previously purchased a SkypeOut credit for 10 euros exactly one month earlier on April 23. That's 931508 orders in a month. Or some 30000+ orders per day.

So in maths, for cash flow that is E300000 per day in cash @ 10 euros per transaction. For the latest month it's likely that the total was in the region of E9+ million. Now that number excludes promotional gifts (bet that is not many on the orders) and assumes everyone bought a 10 euro voucher. It fails to add VAT that applies to all European orders. It's been a long time since I was an accountant in Europe, the Vat was paid the month after it was collected. Thus they have created a nice tidy little float there.

Which brings us to cash flow. Other than obvious staff (120 odd) and travel the biggest outgoing by far is paying for these minutes. Then there has to be a fair amount left over. So where is the rest of the money going. Lots on professional services, including marketing, affiliation programs, alliances, creating private labelling deals, paying the lawyers, for defending themselves, including regulations, alliances etc.

I don't know how many minutes Skype had to buy last month. We do know the approximate number of SkypeOut users. If someone wants to pay me to be more scientific I will. SkypeOut numbers have been announced crudely at various times over the last few months. Let's say it is 200k new SkypeOut users in the last month.

That means based on orders at 10 euro that they represent 20% of the purchases last month. We don't know how many minutes they will use. For the rest it means that we had approx 700K reorders. That means that up to 50% of the reported 1.4 millon on SkypeOut may be renewing monthly. It will be less because of heavy users, SkypeIn transactions and users opting for bigger prepaid card amounts etc.

700 k users pay 10 euros for a prepaid card in the month, thus revenue is 7 million euros plus taxes. The longer the repurchase cycle the more they have in cash flow.

I'm inclined to believe they are already cash flow positive and have been for quite a while. As for profit, that's not relevant right now. Cash goes into more developers and services which accelerate product development and prepares and protect Skype for a future in which PSTN minutes won't provide the cash or the opportunity to build a new company.

So is it smart to say cash flow positive this year? I'm betting they already are.

Now there are some choices to be made. How much to spend on the US market development, where Skype is a clear laggard? How to accelerate growth in markets outside the US where the customer acquisition costs are low? It's still a balancing act. What really matters is growing the user base.

By Jean Mercier, Ghent, Belgium

Jean is an active participant in the Skype Forums and a Total Quality Management Expert. He provided data for an earlier blog on Skype's Growth Rate here. The data comes at an important time as it is likely that Skype concurrent online will reach 3 million in the next 24 hours.

As a Skype fanatic, I have followed up my own Skype stats for more than one year. Perhaps it's time to share some thoughts about it!

First my favourite one: Users on-line! This one really matters to the Skype Community. More users on-line, means more possibilities to contact people, or the other way around.

The growth seems to be quite exponential! Good! Another interesting thing, the amount of users on-line fluctuates during the day between a peak and half that number. For the time being this means the Users Online are peaking at 3 million users at about 15h30 GMT and 1.5 million at about 01h50 GMT. This fluctuation is probably linked to global world activity (people awake and working). I also noticed a decrease already on Friday, and definitely on Saturday and Sunday! These are the days off in many countries!

The second graph I follow is related to the Skype business. I noticed that the SkypeOut orders and other vouchers or purchases I made have a sequential number. Therefore I also plotted a graph with the total amount of Skype orders (thanks also to Bill Campbell who provided me also with his personal reorder numbers). Each dot represents an order.

Here the growth is also exponential! Good sign for the survival of Skype. Indeed they need money, at least to pay their personnel. My estimate is that the mean value of each order is 10 euro (or 13 US$). This means, if the extrapolation of the curve is right, that Skype will have an accumulated revenue of 100 million euro [corrected] around August 10 2005. I won't comment on the profitability: I have no data on their cost structure.

Let's go to the third graph: the number of downloads of the Skype software! Here comes the surprise: IT IS NOT EXPONENTIAL ANYMORE!

Until January 2005 inclusive it was quite exponential (see the first part of the curve)! An extrapolation would have shown that we would have today about 90 million downloads.
However, something happened: indeed there was a spectacular increase in the number of downloads from February 2005 on (some deals with other companies to include Skype in their products?). Skype has been downloaded 110 million times today!

Surprisingly, the second part of the curve is bending down, meaning that the exponential growth of downloads has stopped! Is Skype reaching its limits? I don't think so. First of all, the release of new versions of the software has slowed down, and this could be an explanation for the slowing down of the exponential growth (but there still is growth anyway!). Secondly, some new features are certainly coming: Skype for business, webcam, others? This will boost the popularity of Skype!

I don't want to speculate more on these curves. I hope some of you have other numbers to complement them?

Moments ago Skype passed another threshold. 7:30 AM in British Columbia Canada, 8 PM in Bangalore, India according to Vir Bhanu of Knowledge Systems who gave me the heads up.

Here was the world at that moment in time compliments of here:

If you follow Voice on the Net this is an important moment. About 8.5 percent of the Skype User community is online at one time.

The next largest player in this space is probably Vonage with a total of 650,000 users. Players in the VON space can't ignore Skype if they want to have a worthwhile strategy for this market segment.

For Skype Users the opportunities to connect and build a global personal network get better everyday. So when will the next threshold of 4 Million users online occur? Any math wizards out there care to give us a date?

A report by In-Stat found that many users want voice activation and Wi-Fi in their phones. There is also a recurring request that comes up in the Skype Forums that asks how you connect a bluetooth mobile with a desktop PC and then act as a Skype handset. I don't know of any mobile that can currently handle this assignment. However, the first handset provider to work it into their phones will have a "bonus" feature that carriers won't reject and users will switch for. It could even lead to getting better audio quality in mobile devices.

-- 42% of the respondents were very or extremely interested in voice activation for their wireless phones.

-- More than four in 10 were very or extremely interested in buying a wireless phone with built-in Wi-Fi for voice and data.

-- Just 12% had an interest in buying a wireless phone capable of receiving TV broadcasts. Phone users have mixed feelings on future features - report

The important thing is "users" already make this association. They actually expect it to work. They are disappointed to find out it doesn't.

James Enck posts Skype relative usage stats for 20 countries. "The highest absolute growth since October came from Spain (4.6x October's level), Italy (4.2x), Japan (3.9x) and the UK (3.8x)." The distribution is spreading as the tail grows; the highest rank country (US) has less than 10% share of the whole, and it's share is falling. The Anglosphere has a combined 16.26% share. via Antonio Fumero.

James Enck pulls some more statistics together on Skype and draws a comparison with MSN. I'd like to learn more about how Skype is changing IM usage patterns.

At c.30m registered users, Skype would appear to have penetrated 20% of its addressable market, and with around 2m concurrent users, more than 1% of the world's broadband population is running Skype at any given time.
EuroTelcoblog

Interesting!

Now take a look at the 30 million number of MSN users that use the voice / video application monthly (See Digital Media Europe) and Skype numbers look even better. Despite 30m+ MSN video users no one ever talked about giving up the phone for it. Thus the numbers I'd like to see is Skype share of IM voice minutes. share of voice initiated sessions, and lastly share of messaging occasions. While I'm sure Skype has only a small share amongst text / chat sessions its share amongst voice initiated sessions should have made the other IM clients wake up by now. Dominant yet? Can anyone disprove this? There would also be some interesting numbers by age group. Please share reasons why you may continue to use another IM client (not Skype) for voice sessions? Do you use Skype for voice in combination with another video client? Any comments on how your IM usage has changed since adopting Skype?

With the acceleration in the growth of broadband, Skype should reach 100 million users before long.