Skype Targets $1B Revenues

Skype Targets $1B Revenues

by Ray Le Maistre

eBay Inc. laid out its three-year roadmap for investors Wednesday, including projected revenues of $1 billion in 2011 for its VoIP services subsidiary, Skype Ltd.

eBay bought Skype for a whopping $2.6 billion in September 2005, when it was generating less than $25 million per quarter in revenues. (See EBay Buys Skype for $2.6B.)

In its most recent three-month period, the fourth quarter of 2008, Skype's revenues hit $145 million, with eBay stating that the VOIP services business had been profitable for eight straight quarters. Its total revenues for 2008 were $550.8 million, and it ended last year with more than 405 million registered users. (See eBay Reports Q4.)

eBay believes Skype will continue to grow. The online auction specialist noted in its roadmap that Skype is "expected to more than double its revenues to over $1.0 billion in 2011… Skype’s metrics continue to accelerate as the company further establishes leadership in free and paid internet-based voice and video communications, with growth opportunities in core consumer, mobile, businesses and platform. Skype’s leadership position has strengthened over the past year, driven by a new management team and the launch of many innovative products."

One major area of potential growth for Skype is in the mobile voice services market. (See Skype Goes Android, Skype Slims Down for Mobiles, and 3 Launches Skypephone.)

But the packet voice services landscape will have changed significantly in three years' time, with other online big hitters looking to muscle in on Skype's territory, and traditional telcos looking to hold on to as many voice minutes as they can. (See Are Carriers Gunning for Skype? and Why Carriers Want to Compete With Skype.)

One rival is Google, which late Wednesday unveiled details about its Google Voice service, which has been developed using capabilities the Web services giant took on board when it acquired GrandCentral Communications in 2007. (See Google Buys Unified Services Startup.)

On its Official Google Blog, the company boasted that Google Voice "improves the way you use your phone. You can get transcripts of your voicemail and archive and search all of the SMS text messages you send and receive. You can also use the service to make low-priced international calls."

It may still be early days for Google's new voice app, but it might just have a say on whether Skype makes that $1 billion milestone as soon as 2011.