Skype 2007Q4 - Currency corrections show no growth in revenue per user account
From the quarterly results published by eBay, we could conclude that
- the revenue of Skype grew by 76% year to year
- registered user accounts grew over the same period by “only” 61%
Therefore we could conclude that the revenue per user account has been rising.
However, although it is owned by eBay, Skype is still a European company. 83% of the revenue comes from outside the United States!
All Europeans know that the US$ has lost an important part of its value the last years compared to the Euro. Or is it the other way around: the Euro has become stronger? See for instance the currency exchange rate charts on Yahoo.
In the graph below, the Skype revenue is plotted as well in € (euro) as in US$.
We clearly see that the growth in € is lower than the equivalent in US$. “Only” 58% € growth year to year. Still a very good increase!
Now, what about the revenue per “user account” in €?
In US$ it is rising, BUT... in € the revenue per “user account” shows a decreasing tendency!
Who told me some months ago on this blog: “there are lies, big lies, and statistics”? ;-)
[Editor: Yet another reason for Skype to report an "active accounts" figure the way facebook and other membership sites do.]
Jean Mercier is the world's foremost Skype Numerologist.
Comments
The "world's foremost Skype numerologist" should have noted that:
1. Some adjustment for currency fluctuation is already included in the reported revenues... as it would be for any international business that is subject to public reporting standards.
2. Less (perhaps far less) than 50% of Skype usage comes from users whose regular currency is the Euro.
3. To make these misleading graphs, one has to use the almost meaningless statistic reported by Skype called "registered user".
As for a reliable figure for "active users", the editor might use the "real user" statistic reported at http://glimfeather.com/borderless/
Posted by: Aaytch | January 29, 2008 07:40 PM
@Aaytch:
I regret to contradict you, but Skype revenues are calculated in US$ only, without "corrections". This is the way they should report!
And indeed only "50" (or whatever) % of revenue comes from the Eurozone. Anybody who has time can make the same exercise in Mexican Pesos, Brazilian Real, or Japanese Yen.
Concerning the (indeed) interesting blog of my friend Hudson Barton, his numbers are as speculative as mine (we use mainly the same data): he also uses some "own" algorithm to calculate the users by region. This is a good attempt, but only Skype can confirm if our (mine and his) calculations are correct or wrong!
Anyway, thanks for your comments!
Posted by: Jean Mercier | January 30, 2008 11:15 AM
The world's foremost Skype numerologist says: "Skype revenues are calculated in US$ only, without "corrections"."
That is an unfortunate oversimplification. When a Euro of revenue gets translated back to dollars, there is a calculation based on the exchange rate. Currency deflation is a relevant distortion only to the extent of fluctuation within a particular quarter. Comparisons from quarter to quarter are not distorted.
Posted by: Aaytch | January 31, 2008 05:56 AM
@Aaytch (or Hudson?): you say "When a Euro of revenue gets translated back to dollars, there is a calculation based on the exchange rate."
That is exactly what i did ... they other way around, therefore i think we agree with each other!
Posted by: Jean Mercier | February 2, 2008 02:25 PM