In May of last year, Microsoft acquired everybody’s favorite VoIP and chat provider, Skype, for a cool $8.5 billion. It was a big move for Microsoft and a landmark deal, which it officially closed in October. Yet, as Frederic pointed out earlier this week, other than getting to wear the brand’s pin on its lapel, Microsoft has seemed content to let Skype exist as a stand-alone service. But this morning the company announced that it will be integrating Skype into its office productivity suite, powering the “presence” feature in Outlook and becoming a default piece of every version of Office shipped — among other things.
As part of its quarterly earnings announcement this afternoon, Microsoft also shed some light onto just how well Skype has been performing since it joined MSFT’s ranks. One notable milestone to come out of those stats? Users logged 115 billion minutes of calls on Skype over the quarter — a number that was up 50 percent over the prior quarter.
The other good thing for Microsoft, given Skype’s seeming continuing popularity, is that it’s been a boost for the overall numbers in its entertainment. Revenue in its Entertainment and Devices division, which isn’t exactly barren, grew a significant 20 percent — by $292 million — which primarily reflected the inclusion of Skype. Of course, on the flip side, Microsoft’s cost of revenue increased in Q4, related to Skype’s acquisition, basically because it had to deal with all the related costs of onboarding Skype’s team, paying a bunch of new people, etc.
But, it’s safe to say with Xbox 360 shipments dropping from 1.7 million to 1 million, besides the Xbox LIVE boost in subscriptions (year-over-year, by the way), and that big increase in rev, most of that $292 million likely comes from Skype, potentially a good look at what the company’s quarterly revenues look like. Which is interesting, because Skype (although it was on its way) has never been a public company, despite being owned by eBay until 2009 (when they sold it to a group of investors, including Andreessen Horowitz) — so it’s been hard to get a sense of just how profitable (or not) the business is, despite having millions of users. Myself included.
115 billion minutes of Skype calls logged is nothing to scoff at — and the 50 percent jump from the last quarter shows some strong growth for such an established business. Although, annoyingly, there was no mention of the number of paid calls. Even so, at least at the surface, it looks like that Microsoft reach could already be paying off.