Mergers & acquisitions

Readers Scoff at Skype Hype

Nearly nine out of ten Light Readers agree: A $3 billion asking price for Skype Technologies SA is a little out there (see Skype Hype).

It was apparently enough to give Rupert Murdoch sticker shock. Several reports say Murdoch’s News Corp. did indeed hold talks with Skype in Europe but presumably balked at the price (see Is Skype Worth $3B?).

After rumors reemerged last week that the P2P VOIP company is on the selling block, Light Readers were eager to weigh in. Nearly 200 people have now taken our Skype poll, and 88 percent of them say they believe Skype is worth less than its asking price (see Researchers Vet VOIP's Value).

About half of the poll takers say the VOIP company is worth less than $500 million, and 30 percent believe the right price is somewhere between $500 million and $1 billion.

Skype is a unique company to be sure, and its value is hard to figure. Should the “intangibles,” like its brand, be given more weight than the material assets, such as the actual software code?

Only 21 percent of our poll takers believe Skype’s value is in the actual technology, while 41 percent think its value is in its customer list.

The company claims that 150 million people have downloaded its application. But only a subset of those who download it end up using the free service regularly, and only a subset of those end up using Skype’s pay services. The provider's SkypeOut connects calls through the PSTN and costs 1.7 Euro cents a minute for calls to most countries (see Skype Lowers Call Costs). Thirty-four percent of our poll takers believe most of Skype’s value is in its brand name, and they may be right (see VOIP Subscriber Numbers Soar). When somebody’s brand name begins to be used like a verb (Skype me!), it's safe to say it has achieved considerable currency among consumers (see Skype Rules North American VOIP).

Interestingly, Light Readers do not place much value on Skype’s management team -- Scandinavians Niklas Zennstrom and Janus Friis, on whom the tech and mainstream media have bestowed such titles as “visionary,” revolutionary," and “radical.”

Only 4 percent think the management team is the most valuable part of the property.

This important poll will stay up through the end of the week, at which point our poll monkey will stare blankly at the results, scratch himself, then hit the delete key. So weigh in while there’s still time.

— Mark Sullivan, Reporter, Light Reading

Paddy44 12/5/2012 | 3:05:25 AM
re: Readers Scoff at Skype Hype Guys,
It's 1.7 euro cent per min to land lines, not 17c.

And personally if I had the chance to buy Skype at $3bn or Google at $84bn, I know where i'd put my money !!!!

MarkLR 12/5/2012 | 3:05:23 AM
re: Readers Scoff at Skype Hype Thanks for pointing out this error. It has been fixed. -Mark
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