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According to a recent report, Microsoft may charge Skype business users for video archiving and authentication services. [1] The plan is to keep the core video chat technology free for individual consumers but to charge enterprise customers for the use of enhanced features.
Microsoft acquired Skype in May 2011 for about $8.5 billion, immediately raising questions on its monetization strategy for the software that is so popular because it’s free. We think this move should enhance revenues for Microsoft as it taps into the vast Skype user base, which includes a significant number of small, medium and large businesses.
With Skype, Microsoft plans to compete with Apple and Google in the mobile space, and with Cisco Systems and LifeSize in the enterprise video conferencing space.
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Skype has more than 750 million users worldwide. We expect its user base to increase steadily throughout the forecast period. If Microsoft succeeds in monetizing the massive user base for Skype efficiently, it could be a significant addition to the company’s overall revenues. Microsoft plans to integrate Skype with its other offerings such as Office, Windows, Xbox and Windows Phone 7.
Skype accounts for around 1% of Microsoft’s $32 Trefis price estimate, which stands nearly 25% above the current market price.
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