Skype Introduces Annual Fee for Unlimited Calls

Strategic Insights -

Skype, the Internet calling service owned by eBay, has started charging a $30 annual fee for unlimited calls to landline and mobile phones within the United States and Canada. This move is part of a broader strategy by eBay to expand Skype's product offerings and revenue. Skype has 136 million registered users and plans to capitalize on this base by allowing low-cost voice and video communication between its buyers and sellers. As a promotion, users can sign up for a half-price subscription before January 31.

Key Takeaways:

  • Skype is introducing a $30 annual fee for unlimited calls to landline and mobile phones within the United States and Canada, effective January 1.
  • The new fee is part of a broader strategy by eBay to expand Skype's product offerings and revenue.
  • Skype has 136 million registered users and plans to capitalize on this base by allowing low-cost voice and video communication between its buyers and sellers.
  • The company is offering a half-price subscription to users who sign up before January 31.
  • Industry analysts are skeptical about the success of Skype's new pricing strategy, citing the need for behavioral change among users.
  • Skype plans to introduce services with Yahoo and Google next year, allowing users to click a button and call a business they have found during a search.
  • eBay has projected that its auction buyers and sellers will use Skype to iron out details and provide basic support during the sales process, but this has yet to be demonstrated.

Statistics:

  • 136 million: number of registered Skype users
  • $2.5 billion: price eBay paid for Skype in October 2005
  • $30: annual fee for unlimited calls to landline and mobile phones within the United States and Canada
  • $25: typical monthly fee charged by other Internet phone providers for unlimited calls
  • $50 million: revenue generated by Skype in the third quarter
  • 3%: Skype's contribution to eBay's total revenue in the third quarter
  • 8 million: number of subscribers to Internet calling plans in the United States by the end of the third quarter
  • 6.5 million: number of subscribers to Internet calling plans in the United States in the previous quarter
  • 1.45 billion: total revenue generated by eBay in the third quarter

Sources:

  • "eBay's Skype to Start Charging for Calls, Slightly" by Nick Wingfield, The New York Times, no publication date
  • "Skype Adds Landline Calling for $2.50 a Month" by Richard Shim, CNET, no publication date
  • "eBay exec on SkypeOut: 'We're not just a cheap way to make phone calls'" by Greg Sandoval, CNET, no publication date
  • "eBay to Offer Free Domestic Calls on Skype" by Chris Alitzer, Bloomberg, no publication date
  • "eBay's Skype Introduces Click-to-Call Service" by Emily Maltby, The Wall Street Journal, no publication date