My Two Wallets

March 30, 2010 in Economics, Essays, Marketing

In my professional life I often spend time thinking about how much people value a product or service in an effort to estimate the prices they might be willing to pay. One of the biggest mistakes I always make in these evaluations is that I put too much emphasis on money.

Lately I’ve been seeing other people make this same mistake all the time (much easier to spot the mistakes of others!) so I thought I might share this little analogy I use to help myself think about the problem.

I picture myself, a consumer, as having two wallets. One in my right pocket and one in my left. These wallets represent how I think about payments, rewards, prices and cost.

My Right Wallet

My right wallet is the money wallet. This is the fairly standard stuff. I’ll agree to work a job because it pays €x per hour. I’ll buy product A over product B because it’s €2 cheaper. I’ll buy this item because I think it’s worth the price.

When we think about consumer behaviour this wallet is easy to understand and easy to address:

“How do we get more people to buy our product?” – “Let’s reduce the price”

“How can we get him to work more hours?” – “Let’s increase his bonus”

My Left Wallet

The left wallet deals with all the rewards, incentives and prices that are non-monetary. Although most people understand it, it is often overlooked. Even when it is considered, it’s importance is usually underestimated.

Payments-Out

Thinking about payments made from the left wallet can often help us understanding seemingly irrational behaviour.

Why have there been 10 billion song purchases on iTunes when they’re all available for free elsewhere online? Because ‘free’ is only the price for my right wallet, my left wallet is paying time to find them, guilt for not supporting the artist and fear of doing something illegal.

If I have money in my right wallet but no time in my left (i.e. I’m a working professional) I’ll get my music from iTunes. If I have no money in my right wallet but loads of spare time in my left (i.e. I’m a student) I’ll get it from Napster.

Payments-In

A similar divide exists when you’re paying people to perform an activity.

I saw Matt Mullenweg, founder of WordPress, speak at the recent Dublin Web Summit and describe how his open source project is built and maintained by a legion of unpaid developers. He was asked how he manages to “pull this off” by an audience member, with the implication that this was exploitation.

On on the surface it seemed like a valid point. Who are these idiot developers and why are they working for nothing? But after one look at the platform they’ve managed to build, it’s clear that these unpaid developers are no idiots. The answer becomes obvious when we apply the two-walleted analogy – they are getting paid, just not into the most obvious wallet.

I’ve never been a developer on a project like this, so I can’t claim to know exactly what reward they feel, but the internet is full of Open Source projects created and maintained by tribes of workers – none of whom get paid money, but all of whom get some form of reward. The “payment” to the left wallet comes in many guises: happiness, accomplishment, social status, achievement, inclusion, belonging, recognition, reputation, pride.

There are many things we do in life just for the sake of our left wallets – friendship, community building, sport – so it shouldn’t be a big surprise that people will work for these rewards too.

Left vs. Right

The interesting part of the analogy comes when we stop thinking about each wallet in isolation and start to look at how they work together. Specifically, when we look at the exchange rate between the two. I’ll explain what I mean by this with two real-world, offline examples:

The Day Care Dilemma

The first example comes from a study done at day care centres in Israel, recording the time of day at which parents collected their children. At the beginning of the experiment most children were collected on time, but naturally some parents were late on occasion. For the most part, parents made their best effort to be on time each day and few were ever more than 30 minutes late. There was a social cost associated with being late: feeling guilty, imagining that their children might get punished or just feeling embarrassed for being considered a bad parent. These costs were paid for from the left wallet.

A few weeks into the study, some centres began to fine the parents for being late – roughly €5 for every 10 minutes. Thinking about the effect this fine would have on the parents’ behaviour, most people would expect them to try avoid the fine. Therefore, one would expect the number of late collections might decrease. The complete opposite happened. Late collections rose, but not just by a small amount – parents facing the fine were almost twice as likely to arrive late as those who faced no punishment.

This is because parents don’t combine the payments from each wallet, they substitute them. Once they started paying in cash they no longer felt that they were paying in guilt or embarrassment. And the exchange rate was fantastic! When they make the mental conversion, €5 is a much lower price to pay than feeling like a bad parent.

The “punishment” implemented by the day care centres turned out to be nothing more than a discount.

Thanks at Blood Banks

A similar effect can be found with payments into the left wallet, as opposed to costs out. A great example of this come from studies on the economics of blood donations. The data shows that when blood banks switch from asking for voluntary donations and start paying donors, the total level of donations fall.

This again is because of the mental substitution of the left wallet for the right. In a voluntary system, the blood donor’s reward is a sense of civic duty, of moral good and of helping someone in need. In the cash-for-blood system, the cash payment replaces the social payment, and the exchange rate kills the service – no reasonable amount of money can equate to the feeling that you might save another person’s life.

Applications to Business

The applications to business, especially online business, can be hugely important – the blood donation principle in particular. When people suggest paying Wikipedia contributors for writing good articles we can now immediately see why that wouldn’t work – the monetary reward necessary to substitute for the social reward would just be too big for Wikipedia to afford. The same goes for the question posed to Matt Mullenweg about paying his WordPress developers. The answer is now obvious: they are being paid…. into their left wallet, and the exchange rate to switch to the right wallet is just too big.

This is why sites like Mahalo – that pay users low amounts of dollars for contributions – probably won’t work. This is why sites like foursquare and Digg– which pay users with social rewards like status, reputation and gaming achievements – will.

While we’re on the topic, the Irish blood Transfusion Service seem to understand these principles quite well – they offer different “rewards” for different levels of commitment, all of which are paid to the donor’s left wallet. For example, after 10 blood donations you get a pin and after 50 they take you out to dinner! Looking at their ads (below), they tackle both sides of the coin. One set attempt to increase the social reward (gratitude) and the other to reduce the left-wallet cost (fear, time).

Reducing The Social Cost Of Blood Donations

Nothing New

Of course, none of this theory is anything new. Behavioural Economics has been around for quite some time (Dan Ariely and James Heyman, for example, illustrated the difference between “Monetary and Social” payments in their 1992 paper “Effort for payment: A Tale of Two Markets”). The study has become quite popular in the last few years, with much of this post inspired by recent books like Predictably Irrational and Behavioural Investing.

The “new” bit that I hope to bring to the table is the Two Wallets metaphor. I’ve understood behavioural economics for quite some time, but I consistently neglected it when planning business decisions and thinking about consumer behaviour. So now I always imagine people as having two wallets from which they pay me, and two wallets into which I can pay them. This helps keep the behavioural science at the top of my mind, without having to remember all the science!

The Tragedy Of Haiti and Crippling Debt

February 9, 2010 in Economics, Essays

To quote Dan Bordeaux in a letter to the Washington Times:

The ultimate tragedy in Haiti isn’t the earthquake; it’s that country’s lack of economic freedom.  The earthquake simply but catastrophically revealed the inhuman consequences of this fact.

Since the disaster many people have been urging world governments to “drop the debt” that Haiti owes. Indeed many governments already have.

The real tragedy is that if half the effort we’re devoting to the rescue and salvation operations were applied to preventative measures, many more lives could have been saved.

Haiti has, for a long time, been enslaved by debt. As was noted by many before the quake, “Debt costs lives,” and few places in the world was this more evident than Haiti.

At it’s peak Haiti owed $1.8 billion, almost all of which was borrowed and squandered by past dictators. In the first half of this decade they spent more money each year repaying the debt than they did on healthcare, education or agriculture.

Last May an article from The Times – “Haiti: the land where children eat mud” – has one particularly disturbing insight into the effects of crippling debt and poverty on a society:

“Parents in Carrefour Feuilles are happy when their son joins a gang,” one Haitian woman, who runs an anti-violence project, tells me. “They are also happy when their daughters become child prostitutes. It means the family can afford to eat.”

And yet some will argue that Haiti needed better government, stricter planning rules or more access to information so that it could have prevented the huge loss of life in January, but as anti-dismal points out:

You may argue that stricter building codes are a major reason why the 1989 Bay Area quake killed far fewer people than did this week’s Haiti quake. But stricter building codes increase the cost of building and if you are poor and cannot afford expensive buildings you build cheap, less safe, ones. So you can have all the building codes you like, but people have to be wealthy enough to be able to afford to obey them, for them to work. Also buildings will get safer, even without building codes, as people get wealthier. The more wealth you have the more you have to protect and thus the more you are willing and able to spend on protecting it.

That Haiti gave almost $1oom to rich countries last year instead of investing it in infrastructure is a tragedy, but worse again still is that many other developing countries around the world are being forced to pay off such odious debts. This will ultimately leave them in the same state as Haiti was when the earthquake hit – when each day is a battle to survive there is no room for the luxury of planning for tomorrow.

This rule doesn’t just apply to natural disasters like the Haitian earthquake. Increased GDP per capita (through free-er markets and more capitalism) can lift developing nations from all sorts of poverty-related problems, including famine, war, slavery and crime (albeit indirectly.)

In fact, emotions and humanity aside, there could be a very strong business case for dropping the international debt. The cost of dropping the debt to Haiti entirely was roughly equivalent to the amount that has been donated since January 12th, not to mention the amount that will be spent in years to come.

(There are some obvious flaws in the numbers here, dropping the debt doesn’t automatically lead to a developed nation with top quality infrastructure, but it’s certainly a start. The other obvious issue is that the people donating are not those who were owed the debt.)

But in the long run, even if world leaders take a cold-hearted approach to the issue, dropping the third world debt (paying it on their behalf) could be their most cost effective strategy.

When talking to global leaders Bono, Geldof and company could try appeal to the strings of their purses, rather than hearts.

I Could Die Tomorrow, so I Plan to live to 100

February 6, 2010 in Essays, Fuck The Recession

Yesterday was my last day as a product manager for Vodafone Ireland. After almost 5 years I’m moving on to start up my own company. Although my reasons are ultimately the same as others who make the switch, I’ve written this post to explain my personal thought process that led to the decision.

I Could Get Hit By A Bus Tomorrow

In many ways this first part needs very little explanation. One day I’ll die. Between now and that day I have a finite amount of living to do, so I had best fill it with the things I love doing. I don’t want to labour this point because plenty of people have said it much better than I can.

I will, however, share one video that made a stronger impact on me than all the rest – Steve Jobs’ speech on how to live before you die. If you haven’t already watched it it’s well worth the 15 mins (or you can read the transcript here.)

I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “No” for too many days in a row, I know I need to change something.

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

75 More Years Of Blogging

The second major philosophy that underpinned my thinking was also inspired by a great video. Dan Buettner’s Ted Talk “How to Live to be 100+” is another worthwhile investment of 15 minutes.

There are lots of great little tips in this video from cultures that live longer and healthier lives than our own – eat less meat, eat small meals, incorporate regular, low intensity, physical activity into your lifestyle etc.

More important than the specifics of how to live longer and healthier is the fact that you plan to. This is the lifestyle equivalent of Warren Buffett’s approach to investing (one of my favourite Buffet quotes is “Someone’s sitting in the shade today because someone planted a tree a long time ago.”)

This attitude isn’t easy to maintain because it’s a constant inner struggle. There is a part of your brain – often called the Lizard Brain (see diagram) – that controls what many people would call instinct. It controls some of your most powerful emotions and it’s only concerned with the present. It makes you crave the taste of a cigarette, but it can’t make you feel the devastation of hearing you have lung cancer. It feels the fear of leaving a stable job tomorrow but can’t imagine the elation of having lived a life doing what you love. Emotions feel much weaker in the future tense.

That’s what you and I are up against and that’s why I’ve made the big move. Just because I could die tomorrow doesn’t mean I need to achieve all my goals today, but it does mean each day should be a step in the right direction.

So I quit yesterday, I start working for myself today and I intend to still be here blogging come 2085!

Is Facebook Taking Inspiration From Apple’s App Store?

January 31, 2010 in Essays, Technology & Science

In the coming weeks Facebook will be launching a new “Dashboard” screen for their Applications. At first glance it has many similarities to the iTunes app store, but looking a bit deeper there also seems to be quite a few lessons that Apple could learn from Facebook’s plans:

The Dashboard

As you can see from the screenshot (click for full size) the new dashboard will have a much better layout than the existing list format. Links to the dashboard will sit on the left side of your home page and when clicked will replace your news feed with the new dashboard – like switching between live feed and news feed.

Facebook hope to encourage “discovery and re-engagement with games and other applications” and this is definitely a step in the right direction.

With a little luck it might also help clear up the news feed which can often become clogged with torrents of game notifications.

Applications vs. Games

This is one area in which Facebook seem to be leapfrogging Apple. The iTunes App Store has Games as just another category of apps (the most heavily promoted category) but Facebook is going one step further and dividing it’s applications directory in half, with users now having an Applications Dashboard and a Games Dashboard.

This is a great move by Facebook. Although there’s no technical difference between the two (a Game is just another type of app) from the average user’s point of view the distinction is useful. It also allows the Games Dashboard to include more game-specific features such as high scores and leader boards.

Integrating Social

This is where Facebook’s new dashboards should move into a league of their own. For the initial launch the social integration isn’t anything we haven’t seen before but it’s still a great demonstration of how any simple service can be greatly enhanced by integrating a social web. Here’s Facebook’s list of features they expect in the new dashboards from day 1:

  • Recently used applications and games
  • News items: Examples given by Facebook include “It’s your turn in a game against Jared” or “The leader board was reset 6 hours ago, come play!”
  • Your Friends’ Recent Activity
  • Your Friends Play
  • Directory, Including an “Applications You May Like” section
  • Suggestions/Sponsored on the right hand side, based on a combination of paid placement and the applications they and their friends are using.
  • Counters and home page placement: Bookmarked applications will also have prominence on the home page, and can be accompanied by Counters that you can set to let users know there are actions for them to take within your applications.

It’s A Numbers Game

The motivations behind this move are pretty obvious once you understand the numbers behind app usage. Apple should have an advantage in this area because applications sit on the home screen of iPhones and are harder to ignore, yet some figures show that as little as 20% of all iPhone applications are ever used more than once. Data for Facebook apps appears to be quite similar, with the Top 100 apps having only 10%-20% of users being “active” in any given month.

Try Them Out

Before the official launch you can test them out to see what your dashboards will look like using these demo links:

What do you think? Will this help you get the most out of Facebook Applications or is just more intrusions into your home page? Will it make Facebook games an even more lucrative industry?

Advertising Is The Last Straw

January 26, 2010 in Essays, Marketing

Advertising is buying customers. Advertising is spending money to talk at strangers. 9 times out of 10 it should be your last resort.

Try this – If your business has a marketing budget to spend ask yourself two questions:

1. What do I want to achieve by spending this money? Earning more revenue? Keeping customers? Getting new customers?

2. Where in my business do bottlenecks occur that stop me from achieving these goals?

Imagine your budget in a pile of single euro coins on a table. Slide each euro across the table one by one and place it in one of several pots, with a pot for each activity you’ll spend it on. As you lift each euro ask yourself some more questions:

If you want to earn more revenue what is the most effective use of that euro right now? Taking care of existing customers? Could it be spent developing new products or services they’d like to buy from you? Or improving customer experience?

If you need more customers you could spend the euro on making your sign-up process easier, or converting more casual visitors into paying users. You could make it easier for customers to tell their friends about you or improve your service so that they’ll want to tell their friends about you.

If you get to the end of that thought process and have no money in the advertising pot it’s not a bad thing!

If you can’t see any room for improvement in these other areas then it might make more sense to advertise. Only when you have your sign up process running smoothly does it make sense to spend money getting people to visit your site.

The problem is that many businesses decide on an advertising budget at the start of the year and then wonder how they can effectively spend it. A better approach is to ask how effectively they can use their marketing budget, realising that advertising is only one of the many possible answers.

Or am I being too hard on advertising?

Video Killed The News Story

January 13, 2010 in Essays, Marketing, Technology & Science

Here’s some recent headlines from a few technology and marketing websites. Both are about different stories, but the headlines all effectively say the same thing.

Online video more popular than blogging and social networking

Video Marketing Tops Search Marketing as a #1 Priority for Brands and Agencies in 2010?

A lot of stories like this pop up around the web and although they can be quite interesting to read, the underlying trend is nothing new. An offline equivalent might have a headline like:

Watching a documentary is quicker and easier than reading a book



In this hyper-connected world we’re all starting to realise the power of interactivity (or it’s evilness), but let’s not underestimate the power of the lazy person inside all of us that just wants to sit back, relax and passively consume.

This Just in: Watching stuff is easier than reading stuff! A couch potato is lazier than a book worm!

Leave a comment…. if you could be bothered typing 😛

Economics and Ecology

January 12, 2010 in Economics, Essays, Videos

I’m a big fan of the VlogBrothers, two brothers who make daily youtube videos addressed to each other (but also to a wider audience). In today’s video one of the brothers, Hank, attempts to give the other brother – and the rest of the viewers – a quick overview of “Ecosystem Services“. To quote Hank directly:

“Ecology is a fascinating and complicated science. But if you mix it with the fascinating and complicated science of economics, you end up giving value to the things our world does for us.

Those things, in ecological lingo, are “ecosystem services” and you can actually put price tags on them.”

It’s an interesting video and a great introduction to an area of economics that I had never really considered before:

Some iPhone Stats

January 11, 2010 in Essays, Technology & Science

I just got this in info in an email from O2 (I’m a registered iPhone developer), some interesting numbers:

Edit/Update: It seems that they just sent me a summary of Mulley Communication’s iPhone survey results…. from 2008!

  • 72% of users would recommend an iPhone to friends/family
  • 86% of users said their next phone will be an iPhone
  • Social Networking apps are the most popular
  • Circa 25 apps is the average per user
  • €17 is the average spend on apps per user in the last 6 months
  • Of the 34% of users who purchase music on the iPhone, 72% say their impulse buying of music has increased
  • 43% of users check their email hourly or more
  • Circa 60% of users are between 25-44yrs
  • iPhone users uses over 10 times more data than a non-iPhone user

Invention vs. Innovation

January 11, 2010 in Essays

Everyone loves The Inventor. It’s pretty easy to see why: She is the person who got the ball rolling, he was the bright spark who came up with the idea, they are the people who created new products, services, systems and thoughts that provide great improvements in our everyday lives.

EmmetBrown

Accordingly, we’ve structured many parts of our economy and our legal systems to protect and encourage them. Concepts such as patents, copyrights and intellectual property were established to give inventors and creators and extra degree of protection.

A few hundred years ago, when these protections were first being conceived, it was understood that they were short term taxes on society to reward creators and inventors, with the hope that it would have a net positive societal benefit in the long run. Giving inventors a short-lived monopoly over their new idea was a ‘necessary evil’ to give them the incentive to create, without which (it was assumed) much less invention and creation would be done, which is a bad thing indeed. Short term pain, long term gain.

Copyright Symbol

Here is an excerpt from a speech given by Lord Macaulay in 1841 to the British House of Commons as they discussed a new copyright bill:

The principle of copyright is this. It is a tax on readers for the purpose of giving a bounty to writers. The tax is an exceedingly bad one; it is a tax on one of the most innocent and most salutary of human pleasures; and never let us forget, that a tax on innocent pleasures is a premium on vicious pleasures. I admit, however, the necessity of giving a bounty to genius and learning. In order to give such a bounty, I willingly submit even to this severe and burdensome tax. Nay, I am ready to increase the tax, if it can be shown that by so doing I should proportionally increase the bounty.

Macaulay’s argument is very well reasoned one – If giving the creator a legal monopoly over the ownership of their thoughts and inventions can be proven to increase the benefit to society (more/better books, music, products, services etc.) then it is a good thing.

Now here’s the problem – The bounty isn’t worth the tax. Don’t get me wrong, I do think that the total benefit to society of new inventions, works of art and creative thoughts are hugely invaluable, I just don’t think that the original creator should be credited with providing most of the benefit.

Patent

The Innovator

This is where I draw the distinction between the Inventor and the Innovator. The Inventor creates the new idea, but it’s often The Innovator that brings it to market. Without The Inventor we would have no new ideas, but without The Innovator those new thoughts might never reach people to provide a benefit.

Wired magazine’s recent article “Time Your Attack: Oracle’s Lost Revolution” provides a perfect illustration of this. The article discusses Larry Ellison’s failed attempts at building a cheap Net PC:

They imagined a simple machine that would eschew software installed on a hard drive in favor of accessing applications online. Data — videos, documents, pictures — would be stored in Oracle databases instead of on the computer itself. In place of a robust operating system, this machine would work with programs and files through browsers like Netscape Navigator.

In essence they were coming up with the idea of net books and cloud computing – as I’m sure many people at the time were. The article continues:

It was a powerful idea, one that would enchant companies and analysts throughout the IT industry. But it would ultimately fail.

This is an example of how an idea that we know is great (because net books are selling like hotcakes) can still end up failing. If we had applied our inventor-centric view of the world to this idea back in 1999, we would have been happy if Ellison had acquired full intellectual property rights for his idea. After all, he was the idea man and we needed to reward him and others for coming up with great ideas.

But Ellison didn’t get the monopoly on this idea and right now we can all agree that that is undoubtedly a good thing. In the decade since then there has been a slow and steady growth in the area of cloud computing and an explosive growth in the sales of net books. This has come about through slow but steady improvements, incremental upgrades, iterations and developments by thousands of people, none of whom necessarily “invented” the original concept. This is the value of The Innovators. They take an invention and bring it to market, make it more efficient, make it affordable, create smarter distribution channels to get it into peoples hands and improve it again and again over time.

The Wright Brothers' First FlightWhen considering the total benefit for society that comes from a new technology like this, it is obvious that the lions share is created by The Innovators and not The Inventor. Consider all the benefits we get from the modern aviation industry. A small (but significant) portion of that is from the Wright Brothers, but the majority is from all The Innovators in the industry over the last number of years.

A Note of Caution

Recognising the importance of The Innovator can help us view the modern legal system from a different perspective. Intellectual property concepts were always intended as a means to an end. They granted creative businesses and individuals a certain amount of protection so that in turn they could provide a benefit to society.

But how do they affect The Innovator? As you might have realised by now, their affects can be quite detrimental. If Larry Ellison and Oracle had spent the last decade suing and intimidating any small company that tried to progress the development of net books and cloud computing we certainly would have been worse off than we are today.

Great new internet services that provide us innovative ways to discover content (like YouTube, google, spotify etc.) seem to be getting sued for copyright infringement almost every other day. Any time an innovative technology is released it seems inevitable that it will be sued for patent infringement, most likely by a competitor jealous of the success they couldn’t achieve – most often because they didn’t give customers the same level of value.

Is The Inventor’s bounty worth this tax? I don’t think so.

We need to realise that ideas by themselves do not provide huge benefit to societies, the value lies in making them a viable reality. A new technology will often remain an unwanted product until someone makes it simple and easy to use. An invention is no use to me unless I can afford to get my hands on it. I can’t enjoy a new song if I can’t first discover it then listen to it. A great book is no use to me unless I get to read it.

The benefit of The Inventor is rarely felt without the work of The Innovator and we can’t afford to keep punishing one to protect the other.

iTunes Beats Paypal for Registered Users

January 7, 2010 in Essays, Technology & Science

A few months back I was watching Apple’s Rock N’ Roll event (this post has been in my drafts half written since then!), and one thing mentioned that really struck me was the number of registered iTunes users who have registered credit cards – a whopping 100m.

I’ve seen the comparisons done between social networks (“omg, Facebook is bigger than Brazil!”), but hearing the iTunes figure made me realise that I have no clue how that stacks up against the other big hitters in the online world, so I did some research…

Registered Users

Ebay – 88.4 million

Paypal – 75.4 million

Skype – 480.5

Facebook – 300m

iTunes – 100m

Gmail – 146m

Yahoo Mail – 285

Windows Live Mail (msn/hotmail) – 343m

Wikipedia – 10.5m registered (only 148k ‘active’)

I’m still shocked that iTunes has more credit cards registered than Paypal, that’s a very impressive asset. I’m going to try dig up the equivalent for Amazon, but it’s tricky to find. The skype numbers should be taken with a pinch (or a truckload) of salt, as their definition of “Registered User” is basically any skype account ever created, including ones that were never used, have been inactive for years or multiple accounts for the one person.

Graphs

I thought some graphs might be nice so I did that too:

Registered Users

reg users pie

Definitions

Ebay – All users, excluding users of Half.com, StubHub, and our Korean subsidiaries (Gmarket and Internet Auction Co.), who bid on, bought, listed or sold an item within the previous 12-month period. Users may register more than once, and as a result, may have more than one account.

Paypal – All registered accounts that successfully sent or received at least one payment or payment reversal through the PayPal system or Bill Me Later accounts that are currently able to transact and that received a statement within the last 12 months.

Skype – Cumulative number of unique user accounts, which includes, among other things, users who may have registered via non-Skype based websites and users that have more than one account.

Wikipedia – Active: Users who have performed an action in the last 30 days.

Sources

Yahoo Mail, Gmail, Bing Mail, Ebay, Paypal, Skype, Facebook, Wikipedia,

Let me know if there’s any other companies you want me to add to the stats.