by Hudson Barton

Skype's concurrent users online just hit 8 million. We can therefore expect to see breathless reports about the number of days it took to get another million and how long it is going to take to get another. But these are not useful measurements of Skype's success. Skype doesn't give us much information, but there are better ways of interpreting the data we have than looking at the peak of the graph.

Skype usage at the peak time (around 16 GMT) is a combination mainly of European users and users in the eastern half of America. These are two of Skype's largest populations and they are online concurrently. Measuring at this peak has become the standard measurement of Skype growth, but it is not very useful. I prefer to measure at other times.

Skype usage in Europe (and Africa) is best reflected with data sampled at 11-12 GMT, before America's work day starts. American (North and South) usage is seen most accurately at 19-20 GMT. Asian (and Pacific) data should be sampled at 2-3 GMT. At each of these three points in time, the influence of one continent is maximized while the influence of the other two continents is minimized. Of course, Skype usage on the three continents is not perfectly segregated by this method (because some users stay online for extended periods), but it is segregated enough to use for comparison purposes.

This method of measurement permits one to analyze Skype growth in ways that are not possible when one looks only at the peak number. One can see for example a difference in growth rates between the continents. Or by comparing the rates of growth on specific weekdays and weekend days one can discern whether growth on each continent is being driven by business usage or non-business usage.

I have been measuring Skype usage in this way for about a month (my historical data is supplied by Jean Mercier, "The Skype Numerologist."). In a few more months of detailed daily measurement, we will be able to conclude much more than we can presently.

So what can we conclude from the data so far? On this day of surpassing the meaningless waypoint of 8 million concurrent users online, let's just say this: Historically, Skype usage in Europe has slightly underpaced that of America and Asia. In more recent months, this trend has continued and perhaps accelerated.

Note: Two factors are at play in the data; the actual number of active users and the user's average time online. It is difficult to distinguish which factor is driving "concurrent users online".

Blogpulse tracks how much the blogosphere mentions a topic or brand. The unit of measure is percent of blogs that mention the keywords or an url. Nielsen BuzzMetric's blogpulse is slightly biased toward English language blogs although many blogs in other languages are represented.

In October 2004, Skype was mentioned in .015 to .020 percent of blogs.

In March 2005, Skype buzz was in the .045 range, doubling in six months.

Now Skype is in the .07 to .08 range, doubled in 18 months, with frequent spikes over .09 percent.

The chart above shows Skype's modest growth over the last six months. The bottom curve is "VoIP". When I first started looking at both of them, they overlapped. They used VoIP to explain Skype. Now they are mostly separate; Skype has its own identity independent of VoIP.

Just for comparison: Paris Hilton (.075), Harry Potter (.2), iPod (.5), election (.65), Iraq (.7) and sex (1.4%). From a marketing perspective, the new blogging service Vox is stable at .1 after launching its preview in August; Coke (.225, including all uses of the term) and Pepsi (.1).

Last May Skype announced their first "free" SkypeOut promotion -namely all SkypeOut calls within North America would be free until Dec. 31, 2006. In early September Skype announced a similar program covering France. Basically, if you were not already a Skype user, you simply sign up for Skype, and all your SkypeOut calls within the designated territory are free; however, you pay normal SkypeOut rates for calls outside the designated region. And the promotions expire in just over two months, Dec. 31.

Last week Skype UK announced Talk for Britain, a new promotion that probably gives a hint of what will happen to these earlier promotions after December 31. Talk for Britain involves :

• Purchase £10 of Skype credit using PayPal or a UK-issued credit card
• Wait for up to 72 hours to confirm eligibility
• Free SkypeOut calling within UK for the subsequent six months.
• Program expires Dec. 31 for acquiring the six months free SkypeOut credit. (If you buy Dec. 31, you have free calling to June 30, 2007)
• Call Forwarded calls are not included in the promotion.

Over the past few weeks I have had several queries as the what will happen to these promotions after Dec. 31. Does Talk for Britain start to provide some clues?

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How does Skype fit into the mix of other social media? If you recall, Lilia Efimova started using the ULRTMT - Universal Language Real-Time Message Translator this summer. Lilia and her online friend Andrea Ben Lassoued wrote "Weblog-mediated relationship: a co-constructed narrative" and it's being included as a chapter in a new textbook.

Their essay documents their professional relationship's evolution. The chart, at left, has three columns: Lilia's blog on the left, Andrea's blog on the right, and mutual territory in middle. The top of the chart is 2003 and the bottom is April 2006. They discovered each other in the blogosphere, reading each others' posts. After a while, they commented on each others' blogs, bookmarked each others' posts on del.icio.us, and swapped the occasional email. After a few months of more intense intercourse, they escalated to Skype conversations.

It is a solid ethnographic case study by professional social scientists. It spans a long time and covers multiple media channels (how we really interact with each other online). In this case, discovery and low level interaction earned (banked) a small amount of trust.

I'd love to see this analysis of online relationship-building extended to other groups and situations. How do entrepreneurs find each other? How do job seekers discover potential employers and choose media during job search? How do new project teams negotiate the fit of modes to communication tasks? How long do some patterns persist, and do people repeat them across different relationships? How effective is shifting into work/task mode before fully establishing lower levels of trust?

I'd also like to see the end of a relationship. Can you salvage a fading relationship by experimenting with other communication channels? What are the textual or other early warnings indicators that a person is fading from "friend" to "former friend" or "contact"? How much asymetric communication can most people tollerate?

Which behaviors affecting user adoption and migration: What factors affect the success rate in dragging your (family, friends, work colleagues) into new channels? Are social network hubs more able to migrate their networks? Or do hubs who switch lose their power and start from scratch?

The ability to create great experiences comes from deep understanding of human nature. If you'd like to fund a more exhaustive study, let me know. I'm organizing research proposals.

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. This is corroborated when you compare the % revenue increase with the % user increase; certainly some of the difference can be attributed to absence of revenue for SkypeOut calls within US/Canada.

The results are even more impressive when you consider there has been very limited marketing of Skype within North America - Phil has noticed some media ads in the Bay Area; there are some Skype ads on the eBay website.

These results also reveal some other interesting information:

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Jean Mercier is our Skype Numerologist.

Skype was - in the past - proud of its viral growth. But business is business, and they try to attract people by gifts and promotions, hoping to generate more revenue through SkypeOut, SkypeIn and Skype certified products. The last two promotions in September were:

1. Free SkypeOut for France in France
2. September Giveaway for USA and Canada

For the time being this has been unsuccessful IMHO! See the graph below:

Even if MuppetMaster pretends downloads isn't a measure of the growth of Skype (and I partially agree with this), the number of downloads should have shown some acceleration if these Skype Marketing campaigns mentioned above had been successful. Indeed, a bunch of new users downloading Skype should show a change in pattern in the download curve, as it was some months ago when they launched the free SkypeOut in Canada and the USA. It doesn't: almost straight line growth since several months.

September Giveaway was targeting mainly students, and this (probably) proves again that the Skype Users are mainly adult professional users.

Skype Users seem to be also quite often small businesses. But French small business mainly have their customers in France (France is a big country), and phone calls inside France are not free but quite cheap. Belgian small business (as an example), because of the tiny size of the country, do more business abroad (in France for instance), therefore they are more interested in reducing their phone call bills.

So? Why trying to force Viral Growth? Let it grow the usual way, by improving mainly quality, reliability and services.

One of my new "Skype Customers" told me: Skype to Skype has a fantastic quality, but SkypeOut isn't that good, but it is much cheaper indeed! She phones to her family in Algeria, and lives in Belgium! Improving quality will attract more Small Businesses!

Microsoft Live Contacts offers developers 400+ million active users with 12 billion contact records. That's more than Earth's population, so should we assume a bit of duplication among the 30 contacts per active user?

A peak of 20 million simultaneous online (8.7% of the Live Messenger population, or 1 in 12) is 2 to 3 times more than Skype's reported raw peak usage.

Microsoft says Messenger users make about 10 million daily video calls. Skype's decentralized conversation prevents us from knowing Skype's messaging traffic.

Microsoft is building Live into a hot software development platform, including Live Messenger tools. Live's demographics should be strong bait for Microsoft's developer, co-marketing, and distribution ecosystems. A mashup city worthy of serious phreaking.

More details from Richard MacManus's Read/WriteWeb, one of my favorite blogs, about from the Auckland Microsoft TechEd 2006 conference where George Moore, GM of Windows Live, spoke.

George Moore also told the conference attendees some stats of the current MS active audience -

• 240M Hotmail users,
• 230M Messenger,
• 72M Spaces,
• 8M mobile subscribers.

He tells the mostly developer crowd at TechEd that "this is the audience that can be reached by Windows Live services." He goes on to say that at any one moment,

• 20M people are simultaneously connected on Messenger and
• 5.7 Billion messages are sent per day.
• Also there are 300M F2F video conversations on Messenger every month.

George said Spaces is "now the largest blogging service on the planet" (RM: so it's bigger than blogger.com?) - it grew to 30M accounts in its first 6 months.

Recently a couple of posts discussing VoIP Quality:

Om Malik reports on a Brix Networks study, based on data collected on Acceptable Call Quality via their TestYourVoIP.com site.  Note that Brix also announces the availability of this service as a Google Gadget (for Google Desktop) providing ongoing measurement of the quality of your connection for voice and video activities. The study reports an ongoing decline in VoIP Acceptable Call Quality from 84% to about 80% over the period December 2004 to May 2006.

Andy at VoIP Watch found  MyVoIPSpeed Internet Connection Test and was using it as a tool to measure the connection speeds and QoS at the hotel he was staying at. I checked out my own home office connection and got this report:

Om talks in his post about degrading quality of calls received from callers using Vonage. I have been a Packet8 subscriber for almost three years and have found the quality to consistently improve over time to the point where I have minimal problems. I also find I am getting a high quality level with my Skype and SkypeOut calling with one exception: SkypeOut calls to some wireless phone services.  Too much compression/decomprssion going on? first via VoIP, then at the wireless end?

I also ran the Brix TestYourVoIP and got a MOS score of 4.2, close to the MyVoIPSpeed result shown above of 4.0. The tests appear to have some level of consistency across the tests and do appear to reflect the quality of calls that I am experiencing.

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On reviewing my notes from last week's eBay DevCon and eBay Live, some interesting numbers came out in the various sessions:

• eBay: last year sold a "Gross Merchandise Value" of $44B, representing 14% of all ecommerce on the Net.
• PayPal's highest growth is in "off-Ebay" commerce. Last quarter (Q1-06) "Off-eBay" transactions grew by 59% while overall PayPal growth grew by 43% to $8.8 billion of transactions. On PayPal $1.5 billion of stored value is turned over every three weeks.
• Skype, in Q1 of 2006, provided infrastructure for 6.9 billion minutes of long distance calling; representing 7% of all long distance call minutes worldwide.

Developers:

• eBay - 30,000 whose work contributes to 25% of all eBay transactions
• PayPal - 2,500 supporting 350,000 web integrators
• Skype - 3,500 delivering 350 applications and over 400 hardware devices

As mentioned previously, eBay developers and Skype developers have two totally differentiated motivations: eBay developers serve as micro-IT departments to eBay resellers producing customized Seller websites while Skype developers produce Skype-embedded applications for resale to the general public.

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With the turbulent migration to VoIP occurring in 2006, it will be interesting to track usage and subscriber data to support the impact of VoIP and Voice 2.0 business models. A couple of items that appeared this week:

Skype vs Vonage in the UK: Heather Hopkins of Hitwise, an online Internet usage monitoring service, has reported on Skype, Bebo and Vonage -- Why Skype Visits are Through the Roof. Her chart that results from tracking visits to websites for each demonstrates how UK visits to Skype have climbed from ~1% of UK site visits in early February to 6.9% mid-May while Vonage has stagnated in the 0.8% range. And this happened in a market with no free SkypeOut! Score one for market penetration by a Voice 2.0 business model.

Earlier this week I reported on the $15 million funding of Bebo, a social network with 24 million members predominantly in the European market and Andrew Hansen's observation as to how Skype support was probably a factor in their financing success. Heather goes on in her post to report on how Bebo is responsible for over 50% of the upstream sources for visits to Skype. And this number has increased with a Bebo-Skype partnership tied into the launch of Skypecasts. A Voice 2.0 application driving adoption and market penetration in the social networking space.

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Data: Skype.com SkypeOut Dialing Wizard; CIA World Factbook

India is not yet served by SkypeOut nor by PayPal purchasing, so is not on the list.

Some online populations adopt Skype at rates beyond their size. For example, the UK, Taiwan and France are ranked higher than countries with larger online populations. What cultural, infrastructure and economic factors contribute to these differences? How much will these factors affect workplace adoption? Skype Journal Consulting would love to research this for you. Skype me to discuss our research service.

Skype continues its infiltration of PCs across the globe. 100 million people is staggeringly large. Edging out the Philippines for 14th largest country. For all you English readers that would be more than the UK and Canada combined. See Jean Mercier's post for an analysis of what the number stands for (basically a consistent indicator of cumulative user uptake, not a measure of current usage). But that's just the scorekeeping.

100 million is a lot of people made happy, money kept in consumer hands, boosted personal and team effectiveness at work, and the fabric of humanity more tightly woven together. Not bad at all.

Continue reading the official news release which translates the dancing-around-the-water-cooler Joy of this humoungous milestone into  mind numbingly dull and appropriate corporatespeak.

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Jean Mercier, Oostakker, Belgium

New numbers on the home page of the Skype website!

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By Guest Blogger Jean Mercier, Oostakker, Belgium

It is time to update this article, "Why Skype Peaks." It has been a year. Now is a good time to ask the question, "Is Skype still growing?"

First let's look at the number of Downloads of thye Skype Application.

The growth of the downloads is quite linear the last year, with sometimes smaller accelerations, like when the video feature was launched (see one of my previous blogs in this Journal). Of course, as a lot of us knows, downloads are also a result of users upgrading their applications. But still, I am wondering how many other software applications can show a growth like this!

Second, my favorite, the number of users online! This is still, in my “humble” opinion (IMHO), the best public available measure of the popularity of Skype. Interesting how none of the other IM clients release this information. Hmmm…

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Continental Research reports 1.8 million UK Internet users used VoIP in the last twelve months, and that number should double in the next twelve. 48% of those surveyed used Skype, and 56% of VoIP users expect to increase their usage.

This consumer survey would not reveal enterprise use of VoIP, largely transparent to workers.

This accomplishment is amazing! Do you have any idea what 1% US radio share across North America is worth? How hard it is to earn? How many talk radio hosts would sacrifice their ethics on the air to get a national syndication contract? The barriers to behavioural change listeners have overcome? Congratulations, long tail!

I started blogging in 1998. It took eight years for bloggers and blog readers to experiment , evolve, and adopt the medium and its tools.  Give baby podcasting a break.

Despite this success I think podcasting is an interim form, with many new producers and viewers bypassing audio for video. Like blogging, the medium is full of every expression of humanity. Unlike blogging, there is low tollerance for poor production quality. And nothing like the hyperlinked mesh of the blogosphere to make podcasting into a social medium for listeners the way blogs are for readers.

Much of the grief seems to be about Forrester only including podcast feed subscriptions, not the more popular audio on demand.

The Skype story: While Skype Technologies S.A. was rumored last year to have queued up podcasting features, not likely happen this quarter. But Skype remains an enabler. It's driving people to buy speakers, webcams, and microphones for their PCs. Recording tools for Skype like Pamela, Skylook, and Hot Recorder are improving quickly, and morphing into quick conference-call-to-mp3 capture and and upload tools. Skype continues its infiltration of schools and workplaces, so conversation timeshifting and placeshifting makes podcasting and vlogging more relevant than ever.

See also: The Social Software Weblog, Kevin 2.0, Publishing 2.0, Mark Evans, Investor Relations Blog, Guardian Unlimited, Good Morning Silicon Valley, Andy Beal's Marketing Pilgrim, Blogspotting, Bloggers Blog, InterMedia, Barnako.com, blackrimglasses.com, SeattlePI.com Buzzworthy, Digital Inspiration, Texas Venture Capital … and John Cook's Venture Blog