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Skype's the Limit

11:35 AM -- With more than half a billion in revenues last year, Skype Ltd. is projected to top the $1 billion revenue mark in 2011. There were some 405 million registered users for Skype in 2008. (See eBay Sells 60% of Skype for $1.9B and Skype Sale Imminent?)

That's amazing, even for a company that offers most of its connections for free. But I wonder: Did every single Skype user only spend $1.36 with Skype last year?

Think of the potential if eBay and its new Skype partners could get each registered user to spend a full $4? The company's revenues would skyrocket!

I know, not every registered user is an actual person. Many of them are infrequent users who spend no money (like me), and others are dead and are still being counted as customers. That's Internet math for ya.

Skype is one of the most powerful communications tools ever invented. When I had my first video conference with my family in Texas from a hotel room in London three years ago, it dawned on me that such calls are much more valuable than the nothing I was paying.

With so many users getting so much value from Skype, it seems exceeding the $1 billion in 2011 is not only possible, it's probably on the low end of what they'll accomplish.

Now that a more focused team of investors has put their lot in with eBay, what do you think will happen next?

— Phil Harvey, Editor-in-Chief, Light Reading

Stevery 12/5/2012 | 3:57:23 PM
re: Skype's the Limit

Now that a more focused team of investors has put their lot in with eBay


There seems to be an assumption that eBay put unfocused people on the problem.  I see no reason why PE would put people more focused into management than eBay did.



In short:  If the investors are a bunch of MBA boys and girls who grew up in the bubble with mission statements and faux experience, it will go south.


imho, as always.

DCITDave 12/5/2012 | 3:57:22 PM
re: Skype's the Limit eBay's business model and culture didn't mesh with Skype. And, it was a fly on their balance sheet, so it didn't get the attention it deserved. I think investors will be more motivated to find Skype's potential, whatever that may be.
Stevery 12/5/2012 | 3:57:21 PM
re: Skype's the Limit

You lost me.  Allow me to use Silver Lake as an example since they took part of the deal:


eBay's business model and culture didn't mesh with Skype.


eBay runs a consumer business.  Silver Lake runs money for investors.  Which of those two biz models & cultures is a closer match?


And, it was a fly on their balance sheet, so it didn't get the attention it deserved.


eBay has about $15B on its balance sheet.  Silver Lake has $16B (and there are other investors).  How exactly will Skype get more attention?





DCITDave 12/5/2012 | 3:57:18 PM
re: Skype's the Limit Silver Lake has a pretty good track record of investing in companies that are about to go through a growth spurt. I think the outside investor interest in Skype will help it move toward a business model that can make money from its popularity. Some of SL's directors -- David Roux and Charlie Giancarlo come to mind -- have a lot of experience growing companies beyond $1B and I think they'll do well with Skype.
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