Monday, May 09, 2005

Statistics

Aswath Rao - Aswath Weblog


It has become routine that lots of imprecisely defines statistics are used while discussing Skype. Invariably the imprecision is used favorably and is used till it is outed. So it was the number of downloads; but now almost nobody bothers to mention it, even though that banner still adorns Skype website. It has been replaced by a few others that are not so easily seen to be irrelevant: number of concurrent users, number of Skype minutes served and number of SkypeOut subscribers.

It is not clear how Skype counts the number of minutes serverd (which stands at 8.3 billion). People have theorized that Skype aggregates usage report from individual clients; some others think that this statistics is collected from the supernodes. But the question remains as to what steps Skype takes to ensure double counting does not take place. With this background, it is all the more interesting that estimates are being made on Skype’s revenue potential. For example, this article in News Factor Technology News claims that “[a]t an average of, say, five cents per minute, that’s $380 million in revenue Skype just sucked into the ether.” (We have to assume that the counter stood at 7.6 billion when this article was written.) Now we know based on some bloggers confession that it is routine for people to leave the Skype connection on even though neither end is actively conversing. How do we assume that these 7.6 billion communication minutes would have been used on the PSTN network had Skype not come along?
The next up is the number of SkypeOut users. This could be the number of SkypeOut transactions or the number of unique users who have bought ShypeOut credits. Obviously, the latter is better than the former. Given that ambiguously defined metrics have been used earlier suggests that we have to clarify before we use it to estimate the revenue potential.
Posted by aswath at May 7, 2005 04:12 PM | TrackBack

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