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Skype Overview: Expanding the potential of Global Communications Faisal Galaria Business Development
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“Every now and then a company [Skype] comes along with an idea that’s not only good and marketable but that captures the spirit of the moment” FierceWireless (2005) “It's no exaggeration to say the telecom industry will never be the same” Business Week (30 May 2005) “Zennström the radical has struck again” Business week (30 May 2005) “Skype has blazed a new trail” Business Week (30 May 2005) “It’s free. It’s a phenomenon” Dow Jones Newswire (28 April 2005) “The period of incumbent complacency is over” James Enck, Daiwa (25 May 2005) “More than 41 MM people use Skype software…as a result, combined 2005 revenues of AT&T and MCI are expected to fall by $7.4 Bn or 15%” Business Week (20 June 2005) “Skype, whether you like it or not, has become the iPod of the Internet telephony world” Jeff Pulver (20 April 2005) “The most popular ever Internet downloads and doubtless the world's most viral telecom service” Americas Network (15 January 2005) To Google is to search and….“To “Skype” is to call someone over your computer” USAToday (17 December 2004) “Better quality at no cost” Jason Donahue, Meiosys (30 May 2005)
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Becoming the Voice of the Internet Set out to become world’s largest communications company We want to revolutionise the way everyone communicates through the internet Talking on the Internet should be the simplest and most natural thing in the world The only major Internet company focused 100% on communication
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Vision As broadband becomes ubiquitous, most voice calls will migrate to the Internet using free software, on the edges of the Internet, that remove barriers to more natural forms of communication. That software is Skype.
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Revolutionary Software Efficient customer acquisition –Word of mouth significantly reduces user acquisition cost High operating leverage –Minimal incremental cost for each user call –Software business model with low fixed costs Massively scalable network infrastructure with low capex –Better firewall tunneling that allows more calls to be completed –Advanced security and encryption technology –No single point of failure Internet
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Simply powerful Internet Any Skype user in the World (Free) Any Regular Telephone in the World (Low cost)
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Easy to set up and use 2 Look up and add buddies Start talking with other Skype users 3 1 Download and install Skype client from website, get headset
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With very rich functionality Instant Messaging Contact list Call any phone ($) Wallet ($) Find other Skype users Send any kind of file Make conference calls Leave voicemail ($) Get calls from any phone on your Skype client ($) Expressive Content ($) Voice content market ($) Video Global Directory Forward calls to any number ($) Groups ($) Online Presence
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Customer driven innovation Real-time data analysis Built-in rolling surveys Forums, Blogs & Key Influencers Regular In-House custom surveys Regular in-House focus groups & panels Market information
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Building sharing into product
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Stimulating Viral growth built into product Skype Registered Users (M) Adding 180K registered users / day
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An important consumer activity Skype today Calls from home / mobile phone 480 432 48 160 62 94 10 Minutes per user per month Communications 44% of all user time online is spent communicating Share of Intenet calls expected to increase signi- ficantly in time
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Viral usage Skype Quarterly Minutes Served (B) 67% CQGR!
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Truly Global Company Operations: London Engineering: Tallinn Headquarters: Luxembourg Revenue by Geography Skype user base Local representatives Local Office 215 persons in 15 countries 27 nationalities Doubling every 6 month
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With a fast-growing ecosystem 200+ Hardware devices labeled as Skype-compatible 150+ Skype-enabled Applications 1000+ Developers 30+ partnerships with world-class companies 10,000+ Affiliates Voice Content Marketplace Digital Goods Marketplace
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