Skype Overview:Expanding the potential of Global Communications

Faisal GalariaBusiness Development

“Every now and then a company [Skype] comes along with an idea that’s not only good and marketable but that captures the spirit of the moment” FierceWireless (2005)

“It's no exaggeration to

say the telecom industry

will never be the same” Business Week (30 May

2005)

“Zennström the radical has struck

again”

Business week (30 May 2005)

“Skype has blazed a new trail”

Business Week (30

May 2005)

“It’s free. It’s a phenomenon” Dow Jones Newswire (28

April 2005)

“The period of incumbent

complacency is over”

James Enck, Daiwa (25 May

2005)

“More than 41 MM people use Skype software…as a

result, combined 2005 revenues of AT&T and MCI are

expected to fall by $7.4 Bn or 15%”

Business Week (20 June 2005)

“Skype, whether you like it or not, has become the iPod of the Internet telephony world” Jeff Pulver (20 April 2005)

“The most popular ever Internet downloads

and doubtless the world's most viral telecom

service” Americas Network (15 January

2005)

To Google is to search and….“To

“Skype” is to call someone over

your computer” USAToday (17

December 2004)

“Better quality at no cost” Jason Donahue, Meiosys (30 May 2005)

Becoming the Voice of the Internet

• Set out to become world’s largest communications company

• We want to revolutionise the way everyone communicates through the internet

• Talking on the Internet should be the simplest and most natural thing in the world

• The only major Internet company focused 100% on communication

Vision

As broadband becomes ubiquitous, most voice calls will migrate to the Internet using free software, on the edges of the Internet, that remove barriers to more natural forms of communication.

That software is Skype.

Revolutionary Software

• Efficient customer acquisition– Word of mouth significantly reduces user acquisition cost

• High operating leverage– Minimal incremental cost for each user call– Software business model with low fixed costs

• Massively scalable network infrastructure with low capex– Better firewall tunneling that allows more calls to be completed– Advanced security and encryption technology– No single point of failure

Internet

Simply powerful

Intern

et

Any Skype user in the World (Free)

Any Regular Telephone in the World (Low cost)

Easy to set up and use

2

Look up and add buddies

Start talking with other Skype users

31

Download and install Skype client from

website, get headset

With very rich functionality

Instant Messaging

Contact list

Call any phone ($)

Wallet ($)

Find other Skype users

Send any kind of file

Make conference calls

Leave voicemail ($)

Get calls from any phone on your Skype client ($)

Expressive Content ($)

Voice content market ($)

Video

Global Directory

Forward calls to any number ($)

Groups ($)

Online Presence

Customer driven innovation

• Real-time data analysis

• Built-in rolling surveys

• Forums, Blogs & Key Influencers

• Regular In-House custom surveys

• Regular in-House focus groups & panels

• Market information

Building sharing into product

4.16.8

11.5

19.8

32.9

44.1

57

Q104 Q204 Q304 Q404 Q105 Q205 Q305

Stimulating Viral growth built into product

Skype Registered Users (M)

Adding 180K

registered users / day

An important consumer activity

0

50

100

150

200

250

300

350

400

450

500

Search eBaymarketplace

Email IM Phone

Skype today

Calls from home / mobile phone

480

432

48

160

6294

10

Minutesper userper month

Communications

44% of all user time online is spent communicating

Share of Intenet calls expected to increase signi-ficantly in time

0.30.5

0.9

2

3.3

3.9

Q104 Q204 Q304 Q404 Q105 Q205

Viral usage

Skype Quarterly Minutes Served (B)

67% CQGR!

Truly Global Company

Operations: London

Engineering: Tallinn

Headquarters: LuxembourgAsia

27%

EU48%

Other10%

US13%

Africa2%

Revenue by Geography

Skype user base

Local representatives

Local Office

215 persons in 15 countries27 nationalitiesDoubling every 6 month

With a fast-growing ecosystem

200+ Hardware devices labeled asSkype-compatible

150+ Skype-enabled Applications

1000+ Developers

30+ partnerships with world-class

companies

10,000+ Affiliates

Voice Content Marketplace

Digital Goods Marketplace