Skype possibly the underrated victor

Yesterday eBay, one of the world’s largest electronic commerce companies, released to the press its plans to conduct an initial public offering of Skype, a subsidiary it acquired back in 2005 which specializes in offering VoIP (voice over Internet protocol) services, more well-known as Internet phone services, in 2010. This is getting more interesting as it runs counter to the latest bid from Skype’s founders to buy back the company from eBay. Although Skype’s solid foothold in the VoIP business is hardly questioned, eBay’s purchase of the company more than three years ago, for a hefty sum of $2.6 billion, has been met with skepticism ever since, because the service Skype sells, that mediates voice communication over Internet connections, seems to lend little synergy with eBay’s core business that encompasses online auction hosting, Internet shopping malls, online transactions (PayPal), and online classified ads (Kijiji, Gumtree). Perhaps eBay executives are now convinced that Skype should make more money when sold on the stock market than left in its portfolio.

Regardless of having a giant watching its back, however, Skype may indeed succeed as an independent firm, post-IPO. Bernard Lunn of ReadWriteWeb summed up the strengths of Skype on a March 2009 article: it records a heavy stack of revenues through premium voice services it sells; it is a formidable leader with robust technologies that makes its competitors cringe in a growing market; its service is both mainstream and contagious enough to secure a stable and loyal customer base. He even dared to predict that “eBay will sell Skype through an IPO” and guess what, he was right. Isn’t it every Web 2.0 company’s ideal dream to have a killer product/service that daunt its enemies and generate more revenues in an expanding market, and possess strong potentials to transform the industry altogether? According to Lunn, Skype has all of these features and is ready to rise up as “the biggest winner from the Web 2.0 era”.

For now we would have to wait until next year to see how the stock sales of Skype in the fluctuating capital market fares. It may turn out to be an opportune moment for Skype, however, to spread its wings over a favorable wind from outside investments. It just started invading the home turf of telecommunications companies through iPhone; Skype on mobile phones is likely to disrupt voice charges from which cellular phone service companies have been collecting steady revenues for years. We are still way off from seeing the full potentials of Skype, and VoIP as a whole. The ownership shift expected on Skype in the coming year will create a gigantic influence not only on the company but on the industry as well.


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