Skype: The Sexier Story is Growth

Skype Logo-3
There’s lots of excitement today about Skype unveiling a new plan offering unlimited long-distance calls to 34 countries but the far more interesting story – at least from this corner’s perspective – is Skype’s strong growth, which has been chronically unreported.

Consider Skype’s first-quarter results: another 33 million users came on board, boosting the number of registered users to 309 million. Meanwhile, year-over-year revenue climbed 61% to $126-million and Skype-to-Skype minutes rose 30% to 14.2 billion. So, what you’ve got is a high-growth business that will likely have sales of $500-million in 2008.

The big question is what does eBay do with Skype given the strategic synergies envisioned when Skype was purchased for $4.1-billion have never materialized. iLocus suggests a logical option is spinning it off into a standalone company rather than selling it to a carrier such as BT, France Telecom, AT&T or Telefonica.

That makes the most sense given Skype has an increasingly sexy story to tell investors interested in gaining exposure to VoIP but unwilling to get anywhere near Vonage. If eBay decided to do a Skype IPO, there would be no lack of demand, and it could easily give eBay way to recoup its investment.

Let’s see if eBay is willing to swallow its strategic pride and do something dramatic with Skype this year.

Update: The Skype blog has an interview with CEO Josh Silverman. When asked about a Financial Times story that eBay could sell Skype this year, Silverman did a nice dance around the question:

“Skype is a strong, profitable business with 61% year-on-year revenue growth and 309 million registered users, with 33 million added in Q1 2008. eBay has just made a huge investment in Skype by removing the earn-out. We have new management in place, and with the earnout out of the way, we measure ourselves by our ability to delight our users. That’s our focus. That’s our test.”

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  • Livecrunch

    Finally they did something better, I mean if you look at it different way, you can do same with msn messenger or yahoo.

  • Erik

    I have to agree…I still see Skype as a souped up IM service rather than a stripped down telco…maybe that’s short-sighted but with all of the net neutrality (or lack thereof) issues, there will be a QoS issue for some time to come.

    Which is why I see one obvious buyer…the big G…whose own IM service leaves a lot to be desired. Would be a good leapfrog play for them…much like youtube was for Google Video.