eBay just announced that they intend to spin Skype off in an IPO

January 4, 2016 Facebook Twitter LinkedIn Google+ MLM & Affiliate Marketing News

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When Sten Tamkivi, GM of Skype Estonia, came to visit us in California, who does he run into on the streets of Palo Alto but Niklas Zennstrom and Janus Friis, the co-founders of Skype, rarely seen in America.

This impromptu Skype reunion, captured by Ede Tamkivi, was a bit of a surprise for both parties as the estranged founders were negotiating with PE firms to arrange for a buyout of Skype from eBay (per NYT). Instead, eBay just announced that they intend to spin Skype off in an IPO.

Personally, I would be delighted to see a free Skype. eBay’s current business offers few synergies, and a big multinational needs to accommodate business partners —which limits Skype’s ability to pursue growth aggressively. For example, Skype for wifi-enabled cell phones has been delayed by pressure from wireless carriers who see their voice revenue at risk. Niklas’ and Janus’ original vision was entirely for wifi handsets; the company was called Skyper at the time, and the Europeans (of course!) were focused on mobile solutions work, home, and wi-fi hotspots (where we spend most of our time). The PC version was a test bed that “escaped” among company employees, just like PayPal/Confinity did for e-payments (their original vision was entirely for beaming currency between cell phone IR ports).

A free Skype could also challenge international carriers (e.g., in Mexico) who got Cisco to introduce noise onto Skype traffic. Disabling Skype would be too obvious, so they degrade the signal.

With a sense of nostalgia, I looked up my notes from a 2004 USA Today Panel I did on the future of the Internet:

“Telephony is an application.
– services move from the network to applications
– intelligence is pushed to the edge
– regional provider-centric -> global customer-centric
Within 20 years, we will look back and laugh that we used to pay for voice connectivity. (Pre-Hotmail, we used to pay for client software and /month/email account…) Email and Voice and Video Conferencing will be applications over IP. Wi-Fi phones running Skype and forthcoming dual-mode wi-fi/cell phones will make VOIP mobile and mainstream. For these consumers, voice will become a free application that runs over a commodity data network, without a separate cost premium, just like it has become for email. And of course, voice over a data network will be more valuable and enriched than the plain old telephone service.”

Restructuring a trillion dollar telecom services market will take time, but consumer demand makes it inevitable, IMHO.

Why was Skype successful?
“People like to talk.” — Niklas Zennstrom

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