I know the window for talking about Skype (soon to be purchased by ticker: eBay) and Vonage closed, um, like 3 weeks ago, writes The Stalwart. But it just occurred to me: These companies have some seriously negative economies of scale.
See, for both companies, in-network calls are free. Well, for Vonage there's still a monthly fee, but calls to other Vonage subscribers don't count against your minutes. Skype only collects revenue when you call someone not on Skype. That means the more people join these companies, the less activity they'll be able to charge for.
One day, when the whole world is on Skype, their revenue will return to where it started--$0.
- Did eBay Pay Too Much for Skype?
- Tom Online / Skype Agreement (TOMO)
- eBay, Skype and the Name-the-Synergies-Game (EBAY)
- Two Take-Aways from the eBay-Skype Deal (AMZN, EBAY, GOOG, TWX, YHOO)
- On the Vonage IPO
- VoIP Rush: Microsoft Buys Teleo, News Corp to Buy Skype, Vonage IPO? (MSFT, NWS)
- A Vonage IPO
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