After our initial analysis on the eBay sellout, we felt the need to go further and determine how this development would affect Skype and its ever-growing popularity. Skype has always been considered a proverbial sore in eBay’s scheme of things, by its shareholders and market analysts alike. What we haven’t focused on is the negative impact that eBay would have had on Skype, if it had stayed on with eBay. Although it has been doing phenomenally well with a 400 million user base and projected revenue of US $1 bn by 2011, without the technology, it would fizzle and the dream-run would end.
eBay has been kind to Skype and to itself, to a certain extent, by putting it up for sale. Although this wouldn’t solve the software issue, it does give Skype a lot more freedom to feed on its current popularity, which would have become difficult under eBay considering that they were losing money quickly and were in the middle of a legal mess with Joltid.
There have been reports that the founders of Skype, Niklas Zennstrom and Janus Friis, are planning to buy Skype back. That would indeed solve the technology issue that Skype is in, but that would depend on how much of truth is present in these reports. Although the user base of Skype has been increasing steadily over the years, they do face competition from Gtalk (Google’s p2p voice service) and Vonage (VOIP Service Company).
Skype with its broader user base has the upper hand when compared to GOOG, which targets the U.S. audience mainly and has no video-call facility, and Vonage whose services do not include a free calling service. Interestingly Vonage intends to tap the landline market as well, by replacing all landline phones with Vonage VOIP software’s. Although that sounds quite impressive, it lags behind on two fronts, firstly they do not have a free service, and secondly it needs an external Vonage specific router to make use of their services for a ‘small’ fee.
All this makes Skype the obvious market leader. The group of investors who acquired Skype, Silver Lake Partners, Index Ventures and Andreessen Horowitz Ventures, are no strangers to the startup. They understand the business better than anyone else, and hence it can be said that Skype is in safe hands. It has also been reportedly said that the new bosses of Skype are looking to make Skype public through an IPO. That was what eBay was planning to do before they decided to do away with Skype entirely.
I personally hope, being a regular user of Skype myself, that it realizes its true potential under its new owners who truly understand its value. This should be one rise that all of us should watch out for, just so that we don’t miss the flying colours that you’ll get to see at the end of it all.
Related posts: