eBay 2006 Annual Report Download - page 12

Skype Value Proposition
Our vision is to give our users the ability to communicate freely at home, at work and on the move. Skype offers
a simple, convenient and cost-effective way for people anywhere in the world to call landlines and mobile phones
over the Internet. People around the world using Skype can make free voice and video calls to anyone else on Skype,
as well as send instant messages, transfer files and participate in Skypecasts, which are live, moderated conver-
sations with up to 100 people.
Skype Overview
Skype is one of the world’s fastest-growing Internet communication products, providing free and unlimited
voice, video and instant messaging conversations between people using the Skype software. Skype earns revenues
from premium features such as making and receiving calls to and from landline and mobile phones, voicemail, call
forwarding and personalization including ringtones and avatars. Skype is available in 28 languages.
User Base
As of December 31, 2006, Skype had approximately 171 million registered users and is used in almost every
country around the world. The Skype software is easy to download and install, and enables people to make free
voice and video calls to any other person on Skype, as well as send instant messages and transfer files.
In addition to free calls to other registered Skype users, people can also take advantage of Skype’s premium
features, including SkypeOut (calls from Skype to traditional landlines or mobile phones), SkypeIn (a number
which can be called from a normal phone anywhere in the world) and Skype Voicemail (takes calls when users are
busy or offline).
In 2006, we launched several promotions globally as well as locally, and they drove significant user growth in
registered users, especially in Asia. We intend to migrate users to higher value premium offerings.
Ecosystem
Skype has a large and expanding ecosystem of hardware and software products created by third parties that
extend, enable or improve the experience of using Skype. We are focused on further developing this ecosystem of
more than 50 hardware partners and more than 150 Skype Certified devices to broaden the appeal of Skype to a
wider group of people who want to use Skype away from the computer, no matter where they happen to be. This is
especially true for people who want to take advantage of the mobile Skype experience, which has already been
downloaded more than five million times and is available on more than 120 different models of mobile devices.
Skype Growth Strategy
To expand upon Skype’s position as a leading, global Internet communications company, we will continue to
focus on new user acquisition and conversion of users to premium offerings, while further developing around two
broad areas of Skype’s business: existing telephony products and new e-commerce opportunities. Part of our
strategy to acquire new users is to achieve a desktop presence. In order to do this, we have partnered with certain
computer manufacturers to include Skype in their new computers.
Existing Telephony Products
Our strategy for driving growth from existing telephony products relies on new user acquisition, a better
product and innovative new features. In 2007, we launched a new global pricing structure that gives users an
easy-to-understand all-in-one Skype package. This packages offers a simple, convenient and cost-effective way for
consumers worldwide to call landlines and mobile phones over the Internet.
To continue growing the number of people using Skype, and to improve the Skype experience, we will work
with our partners to introduce new Skype Certified devices and accessories, many of which eliminate the need for a
computer to make Skype calls over the Internet.
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