> You may be able to get along for a while with no conversions,
> but there will come a time when the advertisers demand conversions
> or no money - unless of course they start out that way, which some
> do, commission only.
And commission only = no money. ;)
If users don't click and don't convert, there's no commission to
be paid. Sure, you'll get the odd user who does convert, but the
statistics will be horrible - something like 1 conversion out of
every 1 million ad views. Ok.. maybe I'm exaggerating, but any
internet ad which is not HIGHLY targeted gets one click out of a
few thousand views if you're lucky, and out of those clicks 1%
or less will actually buy. So we're talking 1 commission for
every X hundred thousand users.
> skype hasnt yet and its been years. First they did totally
> completely free. Then they did $15/year. Then $30/year. Now
> $6/month. While its a gradual increase in price over that 2
> or so year window, it isnt bad.
Well, there is a reason why they're raising prices. :)
> Skype also makes money in other ways than just minutes.
> They sell DIDs (if you dont have one your ani/clid is often
> 0000012345 or something) and who knows they may even get
> compensated on the inbound - if you goto a telephone company
> saying "we have 200 million users" you can negotiate
> slightly differently than if you go "we have a single
> asterisk box and hope to get some users someday".
That is probably true.
> Skype also charges higher rates on the destinations that
> are not included in your monthly plan. So for example if
> you get flat rate US, and you call the UK you are paying
> a higher than most rate for that UK call.
You know, there is definitely something to this one. We have
some users we signed up as beta testers. Their US calls are
completely free, but their international calls are paid. To
my surprise for those users who call internationally, the
profit from their international calls pretty much covered
the cost of their US calls!
> Needless to say there are a lot of ways for a company such
> as skype to lower costs and increase revenue streams. There
> are probably some I didnt yet mention.
True, but overall I don't believe they're really making money
with a "10000 minutes for $3" type deal. Sure, Joe Average will
only use 500 minutes a month, but then you'll get all the folks
who figure out they can make a killing by reselling Skype minutes.
But hey, time will tell...
-- Nitzan
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