Skype is widely recognized as the first successful “free” telecommunications company. It was founded in 2003 by Niklas Zennström and Janus Friis. A peer-to-peer voice-over-Internet- protocol (“VoIP”) network, Skype experienced incredible growth and wide acceptance, to the point where, five years after its founding, the company was valued at $2.4 billion and was acquired by the multinational online-marketplace corporation eBay. Deriving its name from the combination of “sky” and “peers,”1 Skype was later divested by eBay and subsequently sold to software giant Microsoft in 2011 for $8.5 billion, the largest acquisition in Microsoft’s history.2 The acquisition by Microsoft showed its confidence in Skype’s future potential, but it also highlighted Microsoft’s need to address emerging “free” telecommunication services being offered by some of its primary competitors, including tech giants Google and Apple. With over 663 million registered users worldwide at the time of the Microsoft acquisition, Skype’s market share was dominant to say the least. The question Skype now faced was could this dominance continue with such large new competitors entering the market? Skype’s customer pool had primarily come from converting traditional telecommunications providers’ customers to Skype through the combination of cheaper prices, quality service, and ease of use. Were there more ways to disrupt these existing traditional players and steal further share? And would the company’s “freemium” business model continue to sustain its grand aspirations, or would modifications be necessary in light of evolving market factors?
When Niklas Zennström and Janus Friis created Skype in 2003 with $20 million in venture capi- tal funding, their plan was to leverage the existing peer-to-peer (“P2P”) technology they had previously utilized at Kazaa, a P2P file-sharing application they had launched, which became popular as a way to share music over the Internet. Like Kazaa, Skype avoided the traditional client–server architecture by choosing a peer-to-peer model, which allowed for direct commu- nication between users or nodes. Skype argued that decentralized P2P networks had many advantages over client–server networks, including (1) the ability to scale indefinitely without increasing required search time or costly centralized servers and (2) self-sustainability resulting from the fact that end-users’ processing and networking power increased proportionately with the network itself.3 Napster used a client–server network, which is one reason it was able to be shut down—by shutting down the server, federal authorities were able to deactivate the entire system (see Exhibit 1 for a comparison of a P2P versus a client–server network).
Skype utilizes two primary IP-based communications techniques: (1) Firewall and Net Address Translation (“NAT”) Traversal and (2) global, decentralized user directory. As described on the company’s website regarding Firewall and NAT Traversal:
Non-firewalled clients and clients on publicly routable IP addresses can help NAT’ed nodes communicate by routing calls. This allows two clients who otherwise would not be able to communicate to speak with each other. Calls are encrypted end-to-end and proxies with spare resources are chosen, so the performance for these users is not affected.
Traditional Client-Server Network P2P Network
A global, decentralized user directory was also imperative to Skype’s technology. Typically, a centralized directory is required for instant messaging and communications software in order to link a user’s identity with a dynamic IP address. However, central directories can be very expensive to maintain as a user base escalates into the millions. In order to avoid this, Skype relies on Global Index P2P, a multi-tiered network in which supernodes communicate in such a way that every node in the network has full knowledge of all available users and resources with minimal latency. A supernode is any node (i.e., connection point, redistribution point, or communication endpoint) that works as a relay for the network, essentially a proxy server, handling data flow and connections for other users.5 According to cofounder Niklas ZennstrÖm, “Our supernode technology allows us to efficiently route calls which improves call speed and quality.”6 Certain high-speed Internet connections, such as those at universities, become sus- ceptible to supernodes and therefore have banned the service.7
Skype uses a proprietary signaling communications protocol while many of its competitors use Session Initiation Protocol (“SIP”), an open network protocol that uses proxy servers to route information to a user’s current location, authenticate users and authorize service for them, and deliver user features. SIP also has a registration function in which proxy servers are used to disseminate requests once a user uploads his or her current location. SIP is a flexible protocol; however, it is hampered by NAT and firewall restrictions.8 Popular SIP providers include Vonage, Jive, and Nextiva.
Web Real-Time Communication (WebRTC) is another rival technology that has begun to emerge since its release by Google in 2011 as an open-source project. WebRTC allows for tele- phony, instant messaging, video, and file transferring, but through web browsers, eliminating the need for softphones.9 One of its biggest benefits is that it does not require plugins, which can be complicated and error-ridden, dissuading users from trying the product.10
Skype users must have the company’s downloadable software on their device in order to use the service. Software is available for free and runs on major operating platforms, includ- ing Microsoft Windows, iOS, Linux, Android, Blackberry, and Symbian. The technology allows Skype users on computers, mobile phones, tablets, home phones, televisions, and other mobile devices to connect with other Skype users via voice, video, text, and file sharing.
For voice calls, Skype users can call anyone else on Skype for free, anywhere in the world. Calls to mobile and landlines worldwide require a fee payable on an as-you-go basis, or on a monthly subscription basis. Skype allows users to have a phone number to receive non-Skype calls, as well as access to call-forwarding, caller ID services, international calling, and group calls with up to 25 people. Video calling (both one-on-one and group) is available in a basic one-on-one format free of charge. The company also offers messaging services through video, instant messaging, text, or voice. File sharing, including photos and video, can also be done by simply adding the file into the Skype chat.
After growing its user base to 54 million registered users, 2.7 million of which were premium service customers, the company was acquired by eBay for $2.6 billion. The transaction also car- ried up to an additional $1.5 billion of earnouts for ZennstrÖm and Friis, contingent on reach- ing 2008 profit targets as well as revenue and user count goals. For eBay, the acquisition price, including earnouts, represented approximately 5 percent of its market value.11 eBay’s manage- ment noted the following key benefits related to its acquisition of Skype:12
Accelerating existing categories: Categories requiring highly involved, complex, and expen- sive purchases, such as motor vehicles, business and industrial goods, collectibles, jewelry, sporting goods, and musical instruments, could benefit from connecting buyer and seller directly through Skype. These types of purchases require significant communication about product details, shipping, and so on, and they are less suited to transaction-based mon- etization. eBay hoped Skype’s features could take over the site’s text messaging system, which had been in place to that point. In addition to accelerating existing categories, eBay hoped that the introduction of Skype would open new categories, such as vacation pack- ages, which required more support than the listing and text messaging available on eBay prior to the acquisition.
Expanding global footprint: In many international markets at the time of Skype’s acqui- sition, eBay was still working to establish its foothold. eBay management believed that Skype, with its stronger worldwide presence, would help the company in its expan- sion into these markets. They also believed the new communications capabilities Skype provided would provide ways to further build trust between buyers and sellers across borders.
Great stand-alone business: Not only was the acquisition seen as having the potential to synergistically help eBay, but the company’s management also looked at Skype’s potential on a stand-alone basis. It pointed to Skype’s large and growing opportunity in the market of global broadband and VoIP usage, its leadership position in the market, and its success- ful executive team.
Despite the fairly convincing arguments in favor of the acquisition, many wondered why eBay chose not to simply license Skype’s technology or use their services, embedding them in the platform. eBay’s own doubts appeared to be confirmed when in 2009, only four years later, it decided to divest the majority (65% stake) of Skype to an investor group including Silver Lake, Index Ventures, and Andreessen Horowitz for $1.9 billion in cash. eBay’s remaining 35 percent stake, however, still allowed it to participate in future profits created by the new owners.13
Less than two years after eBay’s divestiture, Skype found itself with new owners once again, being acquired by software giant Microsoft for $8.5 billion, making it Microsoft’s largest ever acquisition. Although there was much speculation as to whether Microsoft overpaid for the company, which recorded revenues of $860 million the year before in 2010, most agreed that Microsoft’s strategy was to utilize Skype’s popularity to increase appeal across its exist- ing software offerings and to enhance the functionality of its hardware. For example, Skype’s integration in Microsoft’s Outlook software could enhance appeal for business users, and voice and video communication would appeal to Microsoft Xbox gaming enthusiasts as a way to better connect with other online players.14 At the time, Skype had approximately 663 million subscribers worldwide, of which approximately 170 million were active users, and had logged over 207 billion minutes of video and voice conversations the previous year.15
From its inception, Skype has utilized a “freemium” business model in order to generate rev- enue. “Freemium,” a neologism derived from the combination of “free” and “premium,” is a pricing strategy that involves introducing a free basic product or service to gain widespread
use and then offering users a non-free premium version that includes features not available with the basic offering. Skype offers free computer-to-computer phone calls but makes money on add-ons such as voicemail and calls to landlines or cell phones. Success with a freemium strategy requires either:
a. A free product that appeals to a very large product user base (for example, roughly
1.5 billion people with computers are interested in using Skype to make phone calls or Adobe to open PDF files); or
b. A high conversation rate, meaning a high percentage of FREE users are willing to pay for premium features.
Skype is successful because of the sheer total numbers of users of its free product. Even if Skype only had a low conversion rate (the rule of thumb is 5 percent of free product users tend to become paying customers for companies using freemium), it could make money because it has over 600 million product users. In contrast, Flickr, the photo-sharing site that uses a free- mium strategy, has a much smaller total market because the number of camera users that want to use a photo-sharing service is much smaller than the market for making free phone calls. Moreover, the conversion rate to Flickr Pro is relatively low because, for most users, the free version is good enough. The fact that Skype appeals to far more users, with a conversion rate that is better than Flickr’s, translates into a far superior business model. This explains why eBay was willing to pay $2.6 billion for Skype four years after Skype launched, whereas Yahoo paid only $25 million for Flickr four years after it launched.
There are a number of ways that companies can distinguish the premium version of the product or service from the free version. They can offer additional or superior features or capacity (as Skype does calling cell phones or Dropbox does with additional online storage), customer class (e.g., free for students or educators), ease of use (e.g., in online games more effort and time is required to obtain in-game currency in the free version), improved support level (e.g., telephone or e-mail support only provided for premium users), or increased time or bandwidth (e.g., limit how often or how much users can play) of a product or service.16
Freemium business models are sometimes mistaken for free trial models. Free trial models allow people to use the product or service for a set amount of time or “trial period,” after which continued use requires payment. Conversely, freemium models always have a free basic offering with charges only coming from users opting for premium features or services. Certain programs, such as Pandora, an Internet radio application, combine the freemium and free trial models by not only limiting the amount of free radio a user can listen to on their program in a month (i.e., the free trial aspect), but also allowing for paid premium service that includes unlimited access (i.e., freemium aspect).
The expansion of businesses using freemium, particularly in the digital space, has raised the level of expectations of many consumers. Consumers of digital content are more likely to expect some level of free content prior to encountering fee-based premium content. Much of this is due to the domino effect of one producer choosing to follow a freemium model, forcing its competitors to adopt the model merely to stay competitive. Why pay for one product when another producer offers a similar product for free? With over a million free apps in Apple’s App Store alone, putting a price on downloading an app has become an instant barrier for many consumers.
Skype’s Freemium Model
The nature of Skype’s business lent itself well to the freemium business model. Skype’s P2P technology minimized the cost of adding incremental users, thus making it easy to offer it for free. According to ZennstrÖm, “We decided that Skype needed to be free because the marginal cost of placing a phone call for us was basically zero. When the marginal cost of providing a product or service is zero, the price will naturally fall to zero.”17 Furthermore, for the base ser- vice of Skype-to-Skype calls and video conferencing to be of value, it required that many people have the software program. Consequently, offering it free of charge made good business
Other “Free” Revenue Models
Third-Party Pay (Advertising) Revenue Model credit card use, $4 for priority boarding. Flight attendants sell food,
scratch card games, perfume, digital cameras, and MP3 players. Firms utilizing a “third-party pay” strategy provide products for free Ryanair also uses the flight as a platform for advertisers. When your to a community of product users as a method of generating revenue seat tray is up, you may see an ad for a cell phone from Vodafone, from a third party (the real customers) who pays to access those and when it is down, you may see an ad from Hertz. Flyers are a cap- users. In the digital age, Google is the poster child for this strategy, tive audience for advertisers targeting travelers.
offering free Internet search services while companies pay Google to advertise to its millions of product users. Google’s approach
works particularly well because, when product users type in key Bundling “Free” Revenue Model
search words, they identify themselves as prime candidates for advertisers (for example, typing in “skis” or “snowboards” allows A bundling strategy involves offering a free product with a paid companies selling or servicing those products to advertise to those product or service. For example, Hewlett Packard may give away targeted customers). a free printer with the purchase of a computer, or Verizon may give The secret to third-party pay is to provide a valuable free ser- away a free cell phone with the purchase of a service contract. Of vice that attracts either: course, the “free” effect here is largely psychological because the
a. A very large community of product users who can then be seg- customer must actually pay in order to get the product for free. mented in a particular way for advertisers (the way Google Offering a free product as part of a bundle works well when the does with search); or product requires ongoing maintenance or complementary goods
(e.g., Hewlett Packard makes money by selling ink for their free
b. A targeted community of users that comprises a “customer printers). For example, Better Place is a company that has recently segment,” meaning a group of individuals similar on a key introduced free electric car leases in Israel. They are able to lease dimension (e.g., this similarity could be based upon demo- the car for free because they bundle it with an energy/maintenance graphics, for example “teenagers” or “retired people,” or it contract. Customers pay 10 cents per mile (less than the cost of gas) could be more need-based, such as “video game players” or to get their electric car battery packs swapped out at a Better Place “new mothers”). service station. Instead of stopping for gas, you stop for a battery
Blyk, a Finnish telecommunications company, competes by swap. But the battery swap costs Better Place less than 10 cents per
offering free cell phone service to 16–24 year olds. Product users in mile, so they make money on the difference. They also make money the desired demographic fill out a detailed survey on their prefer- through third-party pay because governments, trying to clean the ences and are then given 217 free minutes each month if they agree air, subsidize their operations.
to receive advertisements. Blyk makes money by selling access to Bundling works particularly well when a company offers a that particular demographic and providing information on their broad array of products or when the products it sells require ongoing preferences. (Blyk also benefits by using freemium because many maintenance or complementary goods. Banks offer a broad customers go over their free minutes and end up paying something.) array of financial services and some are increasingly bundling free Blyk was acquired by Orange, the key brand of France Telecom. services—free accounts or free stock trades—when a customer uses In similar fashion, Ryanair occasionally offers airline seats other services (e.g., keeps investment balances above some mini- for free by using a combination of freemium and third-party pay. mum). But the bundled product doesn’t have to be related to the company makes money on its add-on services: $25 per free product. Banks also give away free products, such as iPods or customer for checked or carry-on bags, $5 for seat reservations and iPads, to customers opening accounts.
sense; it prompted users to contact others they wanted to call using Skype (this is often called a “two-sided market” because one party needs to contact another party and invite them to use the service in order for it to have any value). Skype is also subject to “network effects,” meaning that users have an incentive to bring others into the network because it creates more value for them. (See Exhibit 2 for a list of both free and available-for-purchase services.) The ability to convert free users to paid users is critical for the freemium business model to work. An analysis of Skype’s revenue per user from 2004 to 2008 showed that Skype generated roughly $1.60 per user per year (see Exhibit 3). Although revenues per user were low, Skype was still able to grow revenues at a rapid pace because of the growth in the overall number of users. One challenge for Skype was figuring out how to increase its revenue per user, either by converting more users to paying customers or getting paying customers to use more fee-based services. To date, Skype had little success in its attempts to increase its revenue per user. Skype and other companies using freemium business models, such as Pandora, typically made less money per user than companies such as Google and Yahoo that used a third-party pay or advertising model (see Exhibit 4). Not only did Google make more money per user, but between 2004 and 2014, it was increasing its revenue per user at a faster pace than Skype, Yahoo, or Microsoft (see Exhibit 5).
Telephony Offerings Comparison
Skype Google Yahoo!
Voice Platform to Platform Calls X X X
Domestic X X
International X X
Conference Calls X X
Unique Phone # X X
Call Forwarding X X
Caller ID X X
Call from Mobile Device X X
Video Platform to Platform Video X X X
Group Video X X X
Messaging Plat2Plat Video Mess X X X
Plat2Plat IM X X X
SMS X X X
Voice Messages X X
Mobile Group Chat X X
Voicemail Transcription X
Sharing Files X X
Screen X X
Group Screen X X
Source: Skype.com, Google.com, Yahoo.com.
Q3 Q4 Q1
Q2 Q3 Q4
Q3 Q4 Q1
2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009
EXHIBIT 3 Skype Revenue per Unique User
Yahoo Facebook Zynga Pandora Skype
EXHIBIT 4 Revenue per Unique User
Note: Data on Google and Yahoo are from 2005; other data are from 2010.
04 04 05 05 06 06 07 07 08 08 09 09 10 10 11 11 12 12 13 13 14
Google Yahoo Microsoft Skype
Q3 Q3 Q3
Q3 Q3 Q3
EXHIBIT 5 Revenue per User
Source: Yahoo, Google, and Microsoft Quarterly Reports, 2004–2014; comScore.com.
From the beginning, Skype set out to disrupt the services of traditional telecommunication companies. Offering its services for free was revolutionary in the industry and was the catalyst for Skype’s rapid adoption. Even the company’s fee-based services were able to substantially undercut their traditional competitors. One particular area of competitive advantage was Skype’s popularity as a long-distance provider. Whereas international long distance rates were as high as $50 per hour, Skype was free. In recent years, international phone traffic had seen
0 2005 2006 2007 2008 2009 2010 2011 2012 2013
EXHIBIT 6 Skype Traffic Growth
Source: Tom Gara, “Skype’s Incredible Rise, in One Image,” wsj.com (January 15, 2014), “Telegeography.” Available at http://blogs.wsj.com/corporate-intelligence/2014/01/15/skypes-incredible-rise-in-one-image/.
overall declines, but international Skype-to-Skype traffic had experienced consistent growth (see Exhibit 6). In order to compete, many traditional carriers lowered rates or bundled phone service in with cable and Internet options. Competition also came in the form of other VoIP pro- viders using SIP, such as Vonage, Nextiva, and Jive.
The popular search engine Yahoo!, through its Yahoo! Messenger application, was also a key competitor offering unlimited free PC-to-PC worldwide. Google, the world’s most popular search engine with over a billion unique monthly visitors,18 also allowed users to text, talk, or video chat through its Google Talk application. The instant messaging service was available for download through an independent app or within Gmail, Google’s e-mail service, and provided a simple, user-friendly interface. In May 2013, Google Talk was replaced with Google Hangouts, an updated application that expanded, in particular, the program’s video-conferencing capa- bilities. Sophisticated technology in the program allowed it to identify and feature the person currently talking in the conversation in the primary window.19 Along with Google Hangouts, the company also offers Google Voice (see Exhibit 7 for a rate comparison between Google Voice and Skype), its VoIP telephony, texting, voicemail, and voicemail-transcription product, which, in 2014, was rumored to be merged with Google Hangouts.20 Google’s massive reach has allowed these products to gain momentum and loyalty. A Google executive, speaking on Google’s “free strategy,” said “We try to make sure our product is orders of magnitudes better than the competition in order to beat them with a free offering.”21 These “magnitudes” of difference are impor- tant when two free products are competing with each other. The number of applications that
EXHIBIT 7 Rate Comparison
Per Minute Rates Skype Google
US–Mobile $0.023 Free
Canada–Mobile $0.023 Free
Mexico–Mobile $0.035 $0.15
China–Mobile $0.011 $0.02
India–Mobile $0.015 $0.02
Unlimited US & Canada (per month) $2.99 Free
Unlimited World (per month) $13.99 N/A
Source: Skype.com, voice.google.com.
Available Web Properties and Services
Google Yahoo! Microsoft Google Yahoo! Microsoft
Web Web Search Google Chrome Toolbar Bookmarks Helpouts Search Toolbar
Internet Explorer Home & Office
Geo Gmail Drive Docs Sheets Slides Forms Drawings Sites Calendar Translate Voice
Google Wallet Google Cloud Print Google Keep Mail
Notepad Personal Finance
Flickr Domains Calendar Education Web Hosting Outlook OneDrive Word Excel
Search for Mobile Maps for mobile Mobile Apps Windows Phone
Google Apps for Business Advertising Commerce Central Small Business Stream Ads
Media YouTube Google Play Books
Image Search News
Video Search Picasa Connected TV Horoscopes Movies
Music News Screen Shine TV
Google+ Blogger Groups Hangouts Orkut Celebrity Tumblr Groups Messenger Dating Games Sports Fantasy MLB
Fantasy Football My Yahoo
Search Blog Search Custom Search Patent Search Google Shopping Finance
Scholar Alerts Trends Health Homes Jobs Autos Finance Local Shopping Travel Weather
Fusion Tables Developer Network
Source: Google.com, Yahoo.com, Microsoft.com.
Google offers contributes to its ability to differentiate from the competition (see Exhibit 8 for a list of online offerings given by Google, Yahoo, and Microsoft). One new concern for Skype was that it was using a freemium model in the United States and Canada, with users having to pay to call from a computer to a landline or cell phone, and Google chose to offer the same service for free (see Exhibit 7). Google used this approach to increase market share with the hope of turning those users into revenues through different freemium upgrades and advertising.
Although search engine giants were knocking on the figurative telecommunications door, Microsoft’s chief competitor, Apple, decided to leverage its platform and technologies clout to move into the space. FaceTime, Apple’s video telephony and VoIP application, was released in 2011, allowing users to talk or video conference with other FaceTime users. FaceTime comes pre- loaded on new iPads, iPhones, and Mac computers. However, it is not compatible with non-iOS devices, so the user must be calling someone else with an Apple device. Originally only available through Wi-Fi, FaceTime now had the ability to work via 3G and LTE data connections.22
Although Apple has been limited by its proprietary operating system, new challengers such as Viber, Tango, and WhatsApp are not. Similar in functionality and features to Skype, all have been gaining momentum with their cross-platform offerings. In February 2014, Facebook
10 Skype: Competing with Free
acquired WhatsApp for$19 billion in cash and stock at a time when it had 450 million users. As of April 2014, WhatsApp had passed the half-billion user mark.23 Also in February 2014, at the time of its acquisition by Tokyo-based Internet service company Rakuten for $900 million, Viber had over 300 million registered users.24 As of March 2014, Tango had reported over 200 million users, 70 million of which were active every month.25
Aided by the deep pockets and plentiful resources of parent-company Microsoft ($327 billion market cap in April 201426), Skype’s leadership team has reason to be optimistic about the future. However, as the other titans of technology race to launch their own telecommunication appli- cations and businesses, Skype’s lead in the industry is starting to dwindle. Traditional telecom- munications firms such as Comcast, Time Warner, and Cox, which have moved into VoIP and offer the advantage of bundling with cable and Internet, are no longer the only competition, and Skype is no longer the new kid on the block. Applications such as Tango, Viber, and WhatsApp, which are very similar in nature to Skype, are not only rapidly increasing their user base, but they are also doing so at a rate much faster than Skype was able to. Tango, for example, grew twice as fast in 2011 as Skype did in its first year, and in only five years, WhatsApp has grown its user base to over 500 million people worldwide.27 How will Skype compete with the increasing popularity of companies, such as Apple and Samsung, which have developed their own applications included on their products?
Given the now-saturated VoIP market, can the freemium model continue to be a viable option? Despite its massive user base and dominance in international voice calls, new companies claiming to provide for free what Skype charges money for make freemium’s future uncertain. Furthermore, some in the industry have accused the company of failing to innovate, leaving the door open for younger, more ambitious start-ups. As Skype looks to the future, how can it best compete against giants such as Google and Yahoo? What, if anything, needs to change in order to increase the revenues it generates from each user? Finally, what synergies can Skype and Microsoft generate and what new competitive advantages can they exploit to remain relevant?
1T. Tãnavsuu, “How Can They Be So Good? The Strange Story of Skype,” Arstechnica (September 2, 2013), http://arstechnica.com
2T. Weber, “Microsoft Confirms Takeover of Skype,” bbc.com News (May 11, 2011), Business, http://www.bbc.com/news/ business-13343600.
3Skype, “What Are P2P Communications?” https://support.skype.com
5Adapted from Wikipedia, “Supernodes.”
6Niklas Zennström interview by Jeff Dyer, May 21, 2007.
7P. Coles and T. R. Eisenmann, “Skype,” Harvard Business School Compi- lation 806–165 (March 2006, revised December 2009).
8Voip-info.org, “SIP,” http://www.voip-info.org/wiki/view/SIP.
9S. Anderson, “What’s the Difference between WebRTC and SIP?”,
Web RTC World (March 5, 2013), http://www.webrtcworld.com
10S. Dutton, “Getting Started with WebRTC,” html5rocks.com
(February 21, 2014), http://www.html5rocks.com/en/tutorials/webrtc
11M. Meeker, “eBay: Acquiring Skype to Help Drive Next Gen Internet,” Morgan Stanley Equity Research (September 12, 2005), p. 2.
12The following benefits were taken from the eBay Acquisition of Skype management presentation available at http://www.slideshare.net
13J. C. Abbel, “Ebay Sells 65% of Skype for $1.9 Billion,” Wired
(September 1, 2009), http://www.wired.com/2009/09/andreessen
14N. Damouni and B. Rigby, “Microsoft to Buy Skype for $8.5 billion”,
Reuters.com (May 10, 2011), http://www.reuters.com/article/2011/05
15B. Evans, “Microsoft to Acquire Skype,” Microsok.com News Center
(May 10, 2011), https://www.microsoft.com/en-us/news/press/2011
16J. Kincaid, “Startup School: Wired Editor Chris Anderson on Free- mium Business Models,” Techcrunch.com (October 24, 2009).
17Interview with Niklas Zennström by Jeff Dyer, May 21, 2007.
18eBizMBA, “Top 15 Most Popular Search Engines,” April 1, 2014, http:// www.ebizmba.com/articles/search-engines.
19The Fuse Joplin, “Google Talk vs Google Hangout—What Makes Them the Best in the Business?” Thefusejoplin.com (March 22, 2014), http:// thefusejoplin.com/2014/03/google-talk-google-hangouts-business/.
20A. Strange, “Google Voice to Merge into Hangouts, Report Says,” Mashable.com (March 18, 2014), http://mashable.com/2014/03/18
21Interview with Google executive by Jeff Dyer, September 18, 2010.
22Apple Inc., “iOS: Using Face Time,” http://support.apple.com/kb
23M. Roppolo, “WhatsApp Reaches 500 Million Active Users after Facebook Acquisition,” cbsnews.com (April 23, 2014), http://www
24Business Wire, “Rakuten Acquires Viber for $900 Million,” Business wire
.com (February 14, 2014), http://www.businesswire.com/news
25A. Shontell, “Tango, A Messaging App with 200 Million Users, Has Raised a Quarter-of-a-Billion Dollars from Alibaba,” Business Insider (March 20, 2014), http://www.businessinsider.com/tango-raises
26Google Finance, April 24, 2014.
27E. Schonfeld, “With 17M Registered Users, Tango Is Growing Twice as Fast as Skype Did Its First Year,” Techcrunch.com (July 1, 2011), http:// techcrunch.com/2011/07/01/tango-17-million-skype/.
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