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That Skype IPO? Don't Hold Your Breath

Posted May 05, 2009 05:00pm EDT by Sarah Lacy in Internet, Networking and Communication, Products and Trends, Recession

Now that there’s at least talk of a recovery, the letters “IPO” are being whispered around the Valley again. Venture capitalist Fred Wilson went further this week saying the end of the IPO drought is at hand. And the biggest candidate in tech-dom is eBay’s proposed spin-off of Skype.

As fashionable as it is to blast eBay for overpaying for Skype, it's now one of the largest long distance phone companies and nearing $600 million a year in revenues. That’s a real business, says my guest Om Malik, of the popular tech blog GigaOm who’s covered Skype closely through much of its life.

But as bullish as he is, Malik doesn’t expect that IPO until 2010 at the latest. The big question is whether eBay believes in the company enough to wait that long, or if it sells to another bidder. And the big question for Skype? Can it stop the decline in average-revenue-per-user in the meantime?

Plus: Malik notes other hot Valley IPOs to look for in 2010.

16 Comments

Yahoo! Finance User
Yahoo! Finance User - Tuesday May 05, 2009 05:15PM EDT

Working is not optinonal.... This is not a good time for many business...

Kyoti
Kyoti - Tuesday May 05, 2009 06:06PM EDT

Maybe Steve Jobs can buy Skype and integrate it into the factory packaging. Not just for iPhone and iTouch, but for all Apple computer products. Since they're going to be players in the portable computing world, and the cellular phone world, why not bite off a larger chunk of the telecom world? Heck, why stop there? Apple can pick up DirecTV while they're at it, and let any satellite user run Skype on a 2-way link. This would also be a good time for the cellular companies to think about leasing cellular time to the VOIP providers. Brave new world coming.

Rookieman
Rookieman - Tuesday May 05, 2009 06:45PM EDT

Isn't skype the same thing as yahoo messenger? Why would pay for skype when they then use yahoo messenger for free

Yahoo! Finance User
Yahoo! Finance User - Tuesday May 05, 2009 07:06PM EDT

The only problem is that when EBay bought Skype, they overlooked buying the key patent that makes the Skype platform work. The original owners still retain this patent and have told EBay they can no longer use it. EBay may be limited to selling Skype back to its original owners because they'll either be a lawsuit over the patent EBay doesn't and has never has owned or potential stockholders will be buying an empty shell. Why all these brilliant analysts have failed to report this crucial omission from the original acquisition is mystifying.

monty
monty - Tuesday May 05, 2009 08:18PM EDT

As a matter of principle, Skype is a valuable asset to Ebay, sure it may not be related or even worked out as it's core business but it's a gem that the tech industry would like to see the true value unlocked. I'm not surprised for one minute if Google is licking it's chops waiting to get thier hands on Sykpe and when Ebay does sell either in IPO or to another bidder, they will recoup more then they paid and some, especially if they can harness a partnership with Google. I will say the minute Google gets their hands on this gem, kiss Yahoo and Softee goodbye.Sykpe will make a great avenue for googs to run it's advertising over the VOIP service.

istartedi
istartedi - Tuesday May 05, 2009 10:32PM EDT

How can VOIP be patented? Obama has too much on his plate, but I'd like to see him spend just five minutes using his bully pulpit to push for patent reform.

Yahoo! Finance User
Yahoo! Finance User - Wednesday May 06, 2009 12:22AM EDT

By spinning off Skype Ebay will be taken over, within a year of Skypes IPO. More than likely by Google or Microsoft. Ebay ceased Ebay live, one of the many things they recently did to bolster the short term numbers than concentrate on growth, and they are making constant changes suitable for a buyout. Ie putting lipstick on a pig.

Nick
Nick - Wednesday May 06, 2009 03:13AM EDT

Ever try getting to customer service on ebay? I wonder if anyone not busy counting money trys to look at things from the customers view point. The lack of this attention will be the undoing of ebay. As well as other businesses in the american marketplace. Screw the customer! They just pay the bills.. ( customer service on ebay is a JOKE!!

Bob
Bob - Wednesday May 06, 2009 04:45AM EDT

In answer to why would anyone use Skype, try it for a while. You'll find you have no use for a regular phone. Between dropping my land line and cutting my cell phone plan in half I've saved about $70 month With the money I saved I added international calling to cells on Skype for all of $10 a month. Call quality is better than my cell phone most of the time. Nice feature is being able to call directly from a web page number. Not very high tech but handy. What I don't understand is with Skype around, why would anyone use Vonage?

Yahoo! Finance User
Yahoo! Finance User - Wednesday May 06, 2009 06:03AM EDT

hi

San
San - Wednesday May 06, 2009 09:44AM EDT

Mark these words UK mobile network provider "3" wants it to run phone calls on netbooks!

San
San - Wednesday May 06, 2009 09:46AM EDT

Mark these words UK mobile network provider "3" wants it to run phone calls on netbooks!

JOSE
JOSE - Wednesday May 06, 2009 10:44AM EDT

Majic Jack is an alternative to Vonage and to Skype to facilitate communication to people who still might not have internet access on the other side of the isle. It is also relatively affordable and the service seems to okay for the price: 20 dollars a year for an unlimited service. It has its down side: you can only call USA and Canada phone lines, but it seems to be better and more affordable than Vonage.

Notch
Notch - Wednesday May 06, 2009 05:06PM EDT

People Google is already launching free VOIP service look it up. www.google.com/voice its going live very soon. All free SKYPE and all the others will be taken down BUY GOOG!

Randy
Randy - Thursday May 07, 2009 03:54AM EDT

Maybe congress/Obama could buy skype and give Ebay like 100 billion for it and then sell it to someone else for 2 billion just to help ebay out. That would be nice.

Randy
Randy - Thursday May 07, 2009 03:54AM EDT

Maybe congress/Obama could buy skype and give Ebay like 100 billion for it and then sell it to someone else for 2 billion just to help ebay out. That would be nice.

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