How does Skype Make Money and Skype Business Model

How does Skype Make Money and Skype Business Model – Unicorn Economy

How does Skype Make Money
How does Skype Make Money

About Skype, Founders, Funders and Facts

Skype was what WhatsApp is!

MicroSoft has a history of acquiring big startups and companies and taking them to the dustbin – gracefully, exactly similar to what I said about LinkedIn Business Model.

Skype is a cross platform (Windows, Linux, Mac, iOS, Android, BB) application that provides video chat and voice call (via VoIP) services.  Users can transmit digital documents like images, texts, media and many others.  Skype users can create video conference calls.

Skye Founders :  Niklas Zennstrom and Dane Janus Friis (he is on the Forbe’s Billionnaire List btw).

Skype Funding : No VC funding so far.  In 2005, eBay acquired 100% of Skype for $2.6 billion i.e. within 2 years of launch.  In 2009, Silver Lake Partners, Andreessen Horowitz & the Canada Pension Plan Investment Board announced the acquisition of 65% of Skype for $1.9 billion from eBay.  Microsoft bought 100% control of Skype from all the share holders in 2011 for $8.5 billion.

How does Skype Make Money

Well MicroSoft was too late to start advertizing Skype’s huge user base.

Skype is inherrently free for limited use kind of business model example.  It is a freemium business model.  Skype is thus based on a freemium VoIP model.  Much of the service is available to users free of charge (as long as both the receiver and dialer are using skype id based access).  Skype Credit or a recurring subscription is required to call a landline or a mobile phone number from skype like that of a regular call.

It has other sources of revenue as well.  Let’s look at them in detail.

How does Skype Make Money via Skype Credits

How does skype make money from credits is exactly similar to recharging your pre-paid sim cards.  You recharge (buy credits) for X amount and use it for outgoing calls, sms to phone numbers.

Have a look at the below screen on skype website to buy credits.

All those recharges / credits sit in the bank generating millions in interest as well.

Similar Article Alert : How does WhatsApp make Money

Business Model of Skype
Business Model of Skype

How does Skype Make Money via Pay as You Go

How does skype make money from post paids is by way of auto debit of card on usage.  If you do not want to recharge / buy credits, you can avail a post paid like facility as well.

The difference being your credit card will be linked to your phone number and as and when you use, your card will be debited.

Personally I feel MicroSoft has wasted skype especially after the advent of WhatsApp and Viber and the likes, who would pay?

I see skype business model only in action when people are doing video calls on computer / laptops and conference calls when skype bugs them with ads.

Skype Business Model
Skype Business Model

Skype Business Model

Skype Business Model is typical story and saga of consumer internet companies. MicroSoft does not disclose how much money does skype make them because they club in the entertainment and devices division which makes them 10$ billion per year.

Skype Business Model via Enterprise Sales

A reasonable skype business model can be giving it as a bundled offer to Microsofts Enterprise users (server, office suite, windows etc) to be used for support and video conferencing use.

Skype Business Model via Ads

How Skype makes Money
How Skype makes Money

The only thing that makes them more money than their subscription business is the advertising revenue.

They have a banner ad on the landing screen when you load skype on your devices.

Plus the side bar of the chat app where you are exchanging messages with other users are full of ads – sadly people have got around to remove those ads completely with help of little jugglery.

Similar Article Alert : How does Slack Make Money

How does Skype make money from other Revenue Lines

Skype makes money through other non proprietary and not technology modes.

It sells related products through its stores, in partnership with In Store Solutions with hardware companies of the likes of headphones, webcams, Skype televisions, speakerphones, wearables etc.  It licenses its brand logo to those who want to advertise their hardware skype enabled and allows them to stick Skype’s logo on hardware thus receiving royalties.

It charges hardware certification fees primarily partner supported.

It used to sell Virtual Phone Numbers (formerly called SkypeIn) that ring your Skype account.

It collects fees when users download third-party software during major upgrades, like the Google toolbar.

You can use skype credits to browse wifi at public places over skype hot spots – skype gets paid for the minutes that you use your wifi access for.

Overall I feel skype will be shut down because WhatsApp and Other Enterprise communication apps will take its place.

Disclaimer : Please use discretion in using the article how does skype make money.  All views of the author.

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