Skype: Moving On to More Markets

 Skype. It is very popular and well known. Many friends and family members “skype” across long distances. Oprah even uses it now to talk to Guests not present on her set. Skype users who talk to other Skype users pay nothing to use the service. But if Skype users contacted non-users, Skype gets paid. According to “Skype Looks for a Spot in Offices and Cellphones” by Verne G. Kopytoff, Skype wants more paid users, the wireless industry, and a piece of the business communications industry.

After seven years, being brought and sold by EBay, Skype has a new CEO, Tony Bates. His previous job was “[leading] [Cisco Systems] enterprise, commercial and small business division”. His plans for Skype are ambitious. The company only has 6.5% of consumers paying. Not a very appealing outlook for investors as the company has filed for public offering. Here is the gist of the plan presented in the article.  

.

Web and Mobile Communication

Currently, Facebook updates are integrated into Skype. Facebook users can use the service to speak to each other, granted both have it. Skype has introduced a mobile app. The app could give phone users the ability to bypass mobile services to use Skype for free, bringing hostility from the mobile community. iPhone users were banned by AT&T from using the app. Skype does have a partnership with Verizon whereby subscribers could “skype” other Skypers for free or use plan minutes for non users. Bates also plans on working on video chat for demanding customers.

Business Communications

Coming from Cisco, Bates knows business communications is revenue driven. Unlike Skype, those within this industry cannot afford to give away free service. Bates believes getting into this industry will bring new paying customers, corporations. Skype has partnered with Avaya, business modified phone sellers, to break into the industry. According to the article, “about 38 percent of corporate phone lines are enabled for Internet calls”. The problem here is: “Entrusting a newcomer like Skype with something as important as a company’s phone service is considered risky.” Skype will have to work very hard to present itself as viable and adaptable to the business world.

To entice investors, Skype will need to fine-tune its plans. Being sold by EBay for not being adopted by EBay sellers and offering a service mostly used freely has hurt the company’s financial image. The best option for more revenue seems to be business communications but the challenge is convincing businesses to risk their communication to invest into a company that has little experience with business communications.