Skype a step closer to becoming its own business

by Guest on November 9, 2009



On Friday an agreement was reached between the founders of Skype and the private investors that are hoping to buy it.  Skype’s founders will get a 14% stake in the company, and eBay, the previous owners, will get nearly $1.9 billion in cash, and a note from the new owners for $125 million.

The new owners, Silver Lake (same parent company that owns Avaya ), Andreessen Horowitz, and the Canadian Pension Plan Investment Board, will hold 56% of Skype, and eBay will retain 30%.  Missing from the mix is Index Ventures.  When the sale was initially tabled last summer, Skype’s founders sued to prevent the merger from happening.  Their case stated that Index Ventures, with partner Michelangelo Volpi, used confidential information in an attempt to acquire a 65% share of Skype.  Jeff wrote about the merger in the beginning of September, so this conflict, and its eventual resolution, developed very quickly.

Where is Skype now?

Like a teenager moving away from home for the first time, Skype is going to have to learn how to become a profitable enterprise, quickly.  No longer having the support, or bankroll, of eBay means that Skype will need to be run as a for-profit venture.  With over 520 million users, 40 million of which came on board in the past quarter, Skype is being given the opportunity to demonstrate that they can run a profitable business.

One of the new owners,  Marc Andreessen shares that “as an independent company, “there’s no need to deliver any specific revenue or earnings number in a particular quarter. It’s a pure focus on the long term.”

What does Skype need to do?

With fewer folks using land based phone services, combined with the extra step of running an application to provide a connection between customers, Skype is going to need to revamp their offerings and find ways to satisfy the growing mobile market.  Competitors like the iPhone or droid handsets, or software like Google Voice already have a huge head start on Skype, but now that the company is no longer primarily owned by eBay, the Skype folks can focus more time and money into marketing themselves.

Skype’s next hurdle?

With the recommended focus being to develop Skype’s mobile offerings and integration, the next step will be to convince the wireless providers (AT&T, Verizon, Bell, Rogers, Telus) to allow Skype to offer their service.  As this can potentially cut into the profits of the providers by allowing a free communication service, we see this being a potentially enormous hurdle for Skype.

So – now that Skype is all grown up, and about to leave the nest, it’s probably best for them to plan well ahead into the future to determine the best features and business plan to incorporate into the next generation of Skype.

Written by: Jason Finnerty. Follow by: RSS, Twitter,, or Friendfeed

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