Before anyone yells at me for implying that Skype has not grown in the past two years, let me clarify that I am talking about revenue growth not subscriber growth. From some cobwebby nether region of my brain, a factoid pops into my head that Skype's current revenues are only about $20-30m. But they have put in place a superb platform for real revenue growth to take off.
Skype today announced the further development of its strategy, creating business opportunities for its thriving community of developers and partners by launching its Voice Services Program for third party content providers. The Skype Voice Services Program developed in partnership with industry leaders like Tellme Networks enables any content provider, large or small, to become a part of Skype’s new marketplace for either free or chargeable voice services. Content providers will join Skype’s ecosystem of more than 400 Skype developers worldwide who are already offering hardware and software products to Skype’s 53 million members.
Skype callers will pay for chargeable voice services from their Skype Credit account with a percentage of the fee going to the content provider who created the service.
Obviously, if this platform takes off, Skype will be sitting on a cashmine.
One little feature of this model that I thought was a particularly marvellous idea was that customers will pay for voice services using their Skype Credit accounts. So Skype controls the cashflow. This means that Skype could actually have negative working capital -- taking cash from customers up front and releasing it to voice service providers only later.
Reminds me of Dell. We have all heard about Dell's super-efficient supply chain and distribution model. But someone explained their financial model to me and I found that just as impressive. Dell stores supplier components in its warehouses so that they are handily available when a PC order comes in but the title to the components is only transferred from suppliers to Dell when Dell actually puts the component into a PC. So Dell pays suppliers at the end of their credit cycle -- probably a month or two after they've been paid by their customers. Hence, negative working capital!
Another thought, albeit half-baked: could Skype Credits eventually become the phone equivalent of PayPal? Just as PayPal is used to transact over the web, could Skype Credits become the de facto currency of phones? This might actually seem a step backward to some people ("Leave the web and return to phone transactions?") but I think this might help open new markets such as:
- People who have access to phones but not to the Internet
- People who don't like using the Internet to transact
Cross-posted to OpenMoodle: the Oxford University Next Generation Mobile Applications Forum.