Update: Skype, the Internet telephony company that recently filed for an initial public offering, might be up for sale… again! After being sold to eBay and then spun out, a report suggests that Cisco Systems is looking to buy the company. The report adds that Google might been interested in Skype but has backed off because of anti-trust concerns.
The deal, if it indeed goes through is going to cost Cisco some serious chunk of change — upwards of $5 billion. If Cisco does indeed buy Skype, it would be the first time the router and switch maker would enter the world of services. (Update: Folks in comments correct me and point out that WebEx is a service, so Cisco already is in the services business.)An entry into telephony and messaging services would put the company in competition with many of its customers, especially the telephone and cable companies. But then, Cisco does have to face the harsh reality of finding revenue and profit growth to keep its shareholders happy.
It currently has 560 million registered users and about 124 million of them are active on monthly basis, while about 8.1 million of them are monthly paying users. For the first six months of 2010, Skype reported revenue of $406 million, and net income of $13.2 million.
Skype is one of the shining lights of technology sector right now and its IPO could spark the technology IPO demand. The thin-float alone is going to ensure that Skype would remain hot on the stock markets.
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