Skype Considers Calling on Facebook, Google: Report

 
 
By Nathan Eddy  |  Posted 2011-05-05 Email Print this article Print
 
 
 
 
 
 
 

Skype is mulling a joint venture with Google and Facebook instead of an IPO, according to reports.

The popular Voice over Internet Protocol service Skype is eyeing a separate partnership that would bring its low-cost video chat and calling services to Google and the social networking site Facebook, according to a Reuters report. The decision is being considered after Skype decided to delay its $100 million IPO (initial public offering), and the deal with Facebook could be worth between $3 billion and $4 billion, while a Skype IPO would fetch $1 billion, according to Reuters sources that are directly involved in negotiations.

Skype first announced its intention to go public in August 2010, but after Tony Bates, a former senior vice president of Cisco Systems, was appointed chief executive of Skype in October, the IPO was delayed. Facebook CEO Mark Zuckerberg is involved with Skype about a partnership, according to Reuters sources, while Skype is also considering an IPO for the second half of 2011. "When a company is not going public and it has been on file for a long time, one way or another something is going to happen," one source told the news service.

Skype, founded in 2003 and based in Luxembourg, had an average 124 million connected users per month in the second quarter of 2010. Skype users made 95 billion minutes of voice and video calls in the first half of 2010, approximately 40 percent of which was video. Skype is owned by an investor group led by Silver Lake and which includes eBay, Joltid Limited and Skype founders Niklas Zennstr??ém and Janus Friis, the Canada Pension Plan Investment Board and Andreessen Horowitz.

A joint venture with either Google or Facebook would seem to make sense for the company-in late April, Skype announced Qik Video Connect--a new version of Qik for Google's Android operating system. Qik Video Connect offers ways to share videos with Facebook users. Google currently offers a chat service and VOIP service that gives users the ability to call anywhere in the U.S. for free, while Facebook currently offers its users a (much-maligned) messaging platform.

Skype is also bolstering its relationships with advertisers: In March, the company announced the launch of advertising in Skype software, which will appear in the Home tab of Skype for Windows starting this week. This move represents the first time that advertising will appear in Skype. Groupon, Nokia, Universal Pictures and Visa are among first brands to advertise on Skype. Since the ads are on Skype, advertisers can add a "Click & Call" button in the ad as another call to action. In addition, it allows users to share the ad to their Facebook or Twitter accounts, and with one click, ads can also be closed with the "Close Ad" button.

While Skype mulls a partnership with the two tech giants, the social networking site aimed at business professionals, LinkedIn, announced in March that it filed a registration statement with the Securities and Exchange Commission for a proposed IPO of its Class A common stock. The number of shares to be offered and the price range for the offering have not yet been determined, but the company said a portion of the shares will be issued and sold by LinkedIn, and a portion will be sold by certain stockholders of LinkedIn.

 
 
 
 
Nathan Eddy is Associate Editor, Midmarket, at eWEEK.com. Before joining eWEEK.com, Nate was a writer with ChannelWeb and he served as an editor at FierceMarkets. He is a graduate of the Medill School of Journalism at Northwestern University.
 
 
 
 
 
 
 

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