When voice-over-internet protocol (VOIP) was first developed it was difficult to see how to make money out of it. The free communications and information sharing capability of the internet was, until then, paid for from advertising, but it was hard to see how this could apply to voice communications. After all, no one would want their telephone conversations to be interrupted by advertising.
When Skype first started trading, the company decided to give away the Skype-to-Skype part of the business, so that members (not subscribers) could talk to each other indefinitely for nothing. This meant that people could call anywhere in the world to another Skype user, for as long as they wanted, without paying anything at all
This was, of course, a very real advantage to a great many people. Skype conference calls could be arranged globally, at zero cost, and the system very quickly acquired over 12 million members. However, Skype does not allow members to call landlines or cellphones free. These require a further (very modest) subscription, and that of course is where the money comes in. The cost of running the system is minimal—unlike other online businesses, there are no goods to send out or invoices to prepare, and people are simply billed by direct debit every time the subscription or the usage charges fall due.
Giving away something of real benefit has certainly benefited the founders of Skype: the company was sold to eBay for $2.6 billion in 2005.
- Ensure that what you give away has real value.
- The giveaway should not be sufficient in itself—there needs to be a strong potential for follow-up sales.
- If possible, the giveaway should encourage other people to join in with the scheme.
