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Category: Money

Can Skype Lure Investors into Its Almost Non-charging Business?

Written on August 11, 2010 by Rudfer Tyron

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Following its going public with $100 million IPO, Skype admits there is an inflation of its users who are hooked on free. That is not a good selling point right there, but the company has contingency plans.

, the VoIP service provider, announced on Monday its plans to sell $100 million worth of shares to investors. It has a portfolio of promising figures to show, anyway: 25% increase in net sales from last year’s first half to this year’s first half; and 40% growth in its number of connected users. If ’s IPO launches successfully, this is predicted to pave the way for Facebook and other booming tech platforms to go public in the future.

But there are doubting Thomases surrounding this plan–and they have a point. The Internet calling service has a majority of non-paying users, which increased from 91% in 2007 to 93% today.

Interestingly, Skype is earning from its small band of paying users. They pay a little amount for connecting Skype to landline phones. But this does not dispel the doubts.

The almost-free VoIP provider then laid out the four pillars of its plans: grow its base of customers calling with charge; integrate marketing innovations and strategic connections, new products and features, promotion of its subscription offering; focus on advertising; and venture into corporate communication services.

These ideas are not purely Skype’s alone. These have been done by other companies before. The question is: will Skype succeed in implementing all of these?

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