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Skype-hype reached a new peak over past seven days, led off by an inning opening salvo by Cringley, who in my opinion was blatantly chasing page views. The rumors must have Rupert Murdoch chortling. “We Report, You Decide,” is his line after all. Netscape’s tenth anniversary should have been a good reason for people to take a deep breath and assess what is what. Skype is not worth $3 billion. Or even $1 billion. This is not to say that Skype isn’t a lovely addition to the telecom world. Or that it is not nice to see incumbents squirm a tad. Or that it works for my lovely Mac. But $3 billion …. come on people! That’s a lot of 2 cent a minute calls, especially when you see that most of us love the free calling features of Skype. The fact that Wharton School of Business writes a piece on the company, and doesn’t even conduct a financial autopsy of the company, tells me that my reservations about business schools are justified. (My friends, call it sour grapes, for I lost out on my chance to get inside the box thinking that would have made me rich!)

“When I first heard the rumor that Rupert Murdoch was trying to buy Skype for $3 Billion, I couldn’t believe that Rupert would risk pissing off the carriers that carry his TV empire’s content,” says David Isenberg. Rupert Murdoch was even more blunt about these Skype-News Corp rumors. “I could make some wild predictions about that,” he said during an earnings conference call. He said that News Corp. made an offer for Skype is a “total invention.” PaidContent reports that Murdoch’s digital designs could lead to a search engine acquisition. Names like InfoSpace are cropping up, Staci says.

“We’ve had conversations with them. They have made it perfectly clear, the founders, that they do not want to sell and we respect that. We’d be very happy to work with them in some way,” Murdoch said. The grand old man of media is being polite – why be blunt, when others can read between the lines. The fact is that they have hired an investment banker, and are entertaining calls, tells me clearly, they want to sell. And now is as good as time as any – Sk(h)ype is at its fever pitch. Or how else can you explain a biggish feature in Vanity Fair, a tome more known for navel gazing, that for its intelligent discourse on telecom and voice-over-the-Internet technologies.

PS: SK(h)ype is an invention of Carlo Longino. Hat-tip

12 Responses to “Sk(h)ype”

  1. I should have went to b-school to make statements like this one: At this point, Dreze isn’t sure if Skype is a short-term phenomenon or the beginnings of the world’s largest communications service, but he predicts that it will keep growing as long as users keep encouraging friends to sign on.

  2. Thanks much for the attribution but want to be clear that what I was trying to do was sort through some of the usual and not-so-usual suspects and explain why I thought they might/might not be a fit. As I wrote, I think InfoSpace would be too expensive — possibly more than Intermix/ MySpace — to fit the “modest acquisition” standard Murdoch described.

  3. Jesse Kopelman

    I think what people are missing is that there are a lot of ways to make money from Skype that have nothing to do with per minute rates on phone calls. Just look to the PBX/Centrex world. People are not paying $30/seat/month just to do simple 1-to-1 voice. In this world where almost everyone has their own phone (thanks to mobiles), functions that were previously limited to the corporate world may become appealing to the residential consumer.

  4. I read the article at Wharton’s website, it is pretty conservative. The one thing that Skype would need to stay away from in order to keep continuing the business model that they have is “regulation”. One interesting thing that the Wharton article points out is that their cost of adding a new customer is “nil” which is the wonder of P2P. Also, their paid services like SkypeOut and Voice mail have been very well received from their subscriber bases. Another quote from the Business 2.0 magazine (August 2005) – The 29 best business ideas in the world – “Make a Free Product so good that customers will pay”. Skype fits that pretty darn well.But again, in order to take the next step, folks at Skype would need some coaching, similar to adding an experienced CEO to the Google team.Bottomline, Skype does have a lot of potential.

  5. I want to throw one out for a home run. Let’s say Skype is trying to determine their “market” value for an already known buyer. Let’s say that buyer is Cisco. Cisco sits on Skype’s board and is essentially the infrastructure that Skype runs on.

    Just a thought, not a rumor.

  6. The shallow nature of Wharton analysis can be exemplified with the following quote “More than 1.8 million people use SkypeOut …” We all know that this is the number of (including cancelled and otherwise unrealized) transactions.