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Foreign Investors In Estonia | SKYPE
When “Free” is Profitable
Although Skype is free, the company has not mastered alchemy, nor have they defied the popular aphorism, “There ain’t no such thing as a free lunch.” With Skype, the free lunch is more a free appetizer, with cost-free calls limited to Skype-to-Skype (computer-to-computer) connections. Many Skype users become so accustomed—or addicted—to its ease of use and quality, that they use SkypeOut, a service which enables computerto-anywhere (landlines, cellular phones) connections at rates a fraction of what the telcos offer. Users pay for the service on a pay-as-you-go plan or, for slightly under 13 dollars per month, unlimited world landline access. Skype reported 27.7 billion free Skype-to-Skype minutes in its third quarter 2009 earnings. SkypeOut minutes—plus other paid-for services like voice mail—totaled 3.1 billion minutes and translated to 185 million dollars in revenue. If Skype maintains this pace, predicts TechCrunch, it will exceed one billion dollars in revenue by 2011. Not bad for four guys in a room.
The Four Amigos
The famous “four guys” often referred to at Skype are the four Estonian cofounding engineers, Jaan Tallinn, Ahti Heinla, Toivo Annus, and Priit Kasesalu. Add the company’s cofounders, Niklas Zennström, a Swede, and Janus Friis, a Dane, and you have the original Skype team. All six had worked together in 2000 on Kazaa, the file-sharing software which achieved notoriety after the fall of Napster. In 2005, eBay purchased Skype for 2.6 billion dollars, making the engineers worth around 45 million dollars each. Since the sale, two of the four Estonian engineers have left the company, but they’ve become something of a legend, if only because they did not take the money and run. Rather than move to Marbella, the world’s most popular playground for wealthy Estonians, they turned their investment arm called Ambient Sound Investments into a venture capital fund and began looking for the next great tech innovation. They found many of their investments within the narrow confines of Estonia. And the rest is history. In four short years, Skype’s user base has grown from 54 million users to 520 million. Skype has offices in Tallinn, London, Luxembourg, Stockholm, Prague, San Jose, Sao Paulo, Hong Kong, Tokyo, and Tartu, a university town of 100,000 in Southern Estonia. Still, the