Jeff Clavier's Software Only

Skype leaves money on the table: not clear how much yet ?

Om just posted a piece "Skype, VoIP Honeymoon over?" related to what seems to be a growing dissatisfaction of the Skype user community around SkypeOut billing issues, and the quality of the service. He follows up on a CNET piece from yesterday.

This has been a long time coming. I originally posted about their credit card issue last September. Ever since, Skype users have been leaving comments/complaints on that post relating their problems. I have also mentioned this issue to DFJ, one of their investors, who told me that (obviously) everything was done to resolve the issue.

Whilst they are most definitely leaving money on the table, the magnitude of the  "loss" is not clear to me. It might be significant - in which case they ought to do something about it quickly, or it might be relatively negligible. As I type this, 2M users are logged in on the system and Skype claims to have served close to 5 billion minutes. This doubles their numbers from last November, that I recorded in this post. When you face this type of hyper-growth, it is generally accepted that you are going to have a few hiccups with the service.

What is clearer is that many seem to complain about the lack of proper support infrastructure. And I can see from the keywords used to access my blog that a lot of people are looking for Skype alternatives.

So hemorrhage ? Definitely not. Leak ? Drip ? We'll see. It would however be nice for Skype 's CEO to publicly address these concerns and tell us, Skype (and paying SkypeOut) users, what is being done about them. Or, as a proxy, Steve Jurvetson could post something on his blog. But this impression that users' voice is not being listened to, and replied to, in this day and age, is just not what a company wants to give. Especially when so many other VOIP players are on the horizon.

Skype: New features but still quite a few issues ?

Engadget just published a worthy interview of Niklas Zennström, the CEO of Skype, by J. D. Lasica. Also found this Silicon.com interview.

Amongst other things (voicemail, video-conference, etc.), Zennström mentions that Skype is going to roll-out a SkypeIn capability (at some point during the winter) allowing regular telephone users to reach a Skype user. This supposedly means that Skype users will be assigned a telephone number, and that Skype will become a full blown VOIP service. This is cool...
Until now, it was possible to call (almost) any telephone number from the Skype user interface by using SkypeOut... when it works (rant below). Skype also recently released Skype Wifi, that allows PocketPC (and soon "Windows SmartPhone, Symbian and Palm") users to use the service on their smart phone.

Skype has enjoyed a fantastic adoption rate since its launch on Aug 29th, 2003:

13M+ users registered

1M+ simultaneous users reached for the first time a couple of weeks ago

2,384,686,217 minutes served, as I type this - i.e almost 2.4 billion minutes. Just to put things in perspective: Vonage has 170,000 customers and passed the billion minutes mark sometime in 2004

295,000 users have signed for SkypeOut (Skype has a goal of 5% conversion from the free service to SkypeOut)

Slightly off topic, but Skype has "only" raised $19M in VC financing, vs. $200M+ (and counting, from what I heard) for Vonage, which reportedly spends $450 to acquire a customer. Talking about "capital efficiency"...

I have been a happy and grateful user of Skype for over a year, but I have noticed recently that the quality of international calls tended to degrade compared to a few months ago ("ransom of success").
More problematic seems to be the chronic issue that Skype is having with SkypeOut and its credit card processing function. I blogged about this a while back, and to my amazement, Skype seems unable to correct these issues. As recently as last month, they announced that Spanish credit cards were not accepted. The reason why I am aware of this issue is that a significant number of people (from Italy, Japan, Israel, Germany, France,...) are coming to my former post after searching "skype+credit+card+problem". And taking a look at their support forum, it sounds as though many are experiencing the same issues, and some are openly blogging their frustration.
I have also heard a lot of complaints about their their online support: always very nice and polite, but of very limited usefulness (which is kinda problematic).

Hopefully they'll get their act together, and will soon fix their credit card issue (unlike so many other startups, their problem is that they can't take the money people want to pay for their service ;-), and their support function.

Update: Skype has fixed a buffer overrun flaw in version 10.0.100 of its Windows software. Make sure to download and install this fix (i.e version 10.0.100 and up). And my good friend Marc has had an issue with the contact upload facility that spammed his (very large) address book.

Let me put some money in my Skype account!!!!

Like Loic , I have had trouble crediting my SkypeOut account with my credit card. My issue was that I was trying to use my US credit card whilst travelling in France. The payment system rejected it on the basis that users connecting from France (through a French IP range ?) should not use a US credit card, according to a very polite online help desk rep.

Too bad Skype seems to have a glitch in this piece of back-end system, key to converting their users into paying customers. However, I am a big fan and will try again later... or make sure people I want to call move to Skype as well.

Update: Skype has fixed a buffer overrun flaw in version 10.0.100 of its Windows software. Make sure to download and install this fix (i.e version 10.0.100 and up).