Hey Microsoft, want to know how to make Skype really pay off?
I decided to sit back and watch the reactions to Microsoft’s purchase of Skype before I made any comment, well done Om for gazumping everyone.
Firstly, a couple of interesting points
1. Microsoft paid around $1000 per customer (imagine Facebook at that kind of valuation)
2. A lot of sites reported that Google and Facebook were in the ring, I for one have no confidence in that, I believe that Microsoft were there and were convinced that they had to outbid a ghost.
3. Its a second huge win (around a billion) for Zennstrom and Friis and you know what, the best of luck to them, if eBay had idiots for lawyers thats their problem.
4. According to a filing with the Securities and Exchange Commission only 7 percent of the company’s connected members actually pay (please dont mention “Freemium here”)
So the real big issue for Microsoft is how to get more people to pay?
This is actual quite simple and staring Microsoft in the face, Go PREPAID
The people who want to use Skype the most have no credit cards and have no ability to pay Skype for Skype out, as you can imagine the number of people with no credit cards in developing markets is enourmous with only .4% penetration in India for credit card ownership which as the worlds second largest mobile market must be a huge opportunity for Skype, lots of people really want to pay to use Skype but they cant and after what seemed like a good trial at Walmart prepaid Skype appears to be canned.
So thats it, Skype should partner with the largest retail chain in each Asian/African country it should be pretty easy as they already have Microsoft distribution channels, establish a proper prepaid distribution and cash will flow, that I guarantee.
Since Facebook has no paying user, comparable valuation for Facebook will be, well, zero?
Excellent idea…! Kinda surprising that given Skype was corporatised long ago, that it hasn’t entered the prepaid space. Has such strong branding too; it’d sit well alongside iTunes cards, etc.
1000$ per customer?! Wow! This must be a joke. Well, I can imagine that Skype makes a lot of money a year even if you think about all those users who never paid for it.. But still it’s a lot.
I must say, I use Skype as a landline now because my family is abroad and it’s much cheaper to contact them. It costs me 10 euro paysafecard to get credits for 2 months. So even if this is another part of the Big Brother conspiracy plan they don’t get anything about my Skype life because my prepaid card is anonymous.