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October 09, 2006

eBay / Skype Watch Out - Jajah Has 1 Million Customers

posted by MR WAVETHEORY at 10/09/2006 02:46:00 AM
Jajah is reporting they have reached nearly 1 million customers for its free telephone service. eBay Inc. (Nasdaq EBAY) may have to watch carefully since Jajah works directly on standard phones. Jajah offers free telephone calls and there is no equipment to buy and no download. Skype may have to come up with a new solution quickly. What I find interesting is that most of the users pay to use Jajah.
Jajah customers are split equally between North America, Asia and Europe, he said. China, Singapore and Hong Kong are its most active markets in Asia. Germany, Italy, Britain, Switzerland and Austria are its top European markets.

On average, a paying Jajah user spends about $10 a month and about $100 a year, Mattes said. While calls between Jajah users are free, 85 percent of users are paying to call others in countries where small calling charges apply.

What a great business.

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Blogger fellista said...

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7:27 AM  
Anonymous student_of_the_trade said...

Greetings! What's your take on the math implied by their press release?

If they have 1 million users....85% of users pay to make calls...and the average paying user spends $10 per month...that implies an annual revenue run rate *already* in excess of $100 million.

What am I missing?



11:35 AM  
Blogger MR WAVETHEORY said...

The press release says 85% of users are paying to call others in countries where small calling charges apply.

I think this could really mean in countries where charges apply, 85% of users are paying.

It could also mean, going out on a limb, that many users are calling countries where charges do not apply.

If charges do not apply in most countries where calls are made, then that 85% figure could be a small subset of the total user base.

9:16 AM  

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