At the end of 2011, Microsoft was closing its acquisition of Skype for $8.5 billion. Skype had more than 500 million registered users, revenue exceeded $600 million, and the company accounted for 40 percent of international long-distance traffic, making it the largest telco in the world. Despite these milestones and the fact that Skype had seen organic user growth surpassing 30 percent year-over-year, revenue growth was not keeping up.
In June 2010, Andrew Malcolm was asked to take over marketing operations and manage revenue and customer acquisition. This case explores the effort that Malcolm led to figure out the underlying causes of revenue growth failing to keep pace with user growth and develop an approach to improve those numbers.