Why Is Skype Moving to the Web? Hiring Binge Explained

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Skype is hiring a whole lot of engineers. Many of them will work on the company’s mobile applications, as we reported earlier this week, and many will work on cloud-based implementations of Skype that would include working with third parties such as LinkedIn. This hiring binge is part of Skype’s big expansion in Silicon Valley, something I wrote about in July 2010.

The company has leased 90,000 square feet of office space in the Stanford Research Park at 3210 Porter Drive in Palo Alto, with Jonathan Christensen, Skype’s media platform chief, heading company’s operations in Silicon Valley. A Skype spokeswoman recently told me:

We’ve gone from just a few engineers here this time last year to nearly 80 engineers, and they are coming from all over, including from the big name Valley companies too.  Times are tough with the talent wars, but we’re determined, and we’re only just at the beginning with plans to significantly scale up our engineer workforce in Silicon Valley. And, while the perk of a 10 percent raise or spot bonus sounds good, it’s also about getting a great opportunity on the ground floor, working on really cool stuff that can make a huge impact.

The hiring binge is mostly because of two distinct reasons:

Skype for Business. Skype is trying to compete with Microsoft’s Lynca set of technologies that allow you to communicate, collaborate and socialize with others, especially in business environments.

Skype hasn’t been shy about its own business ambitions, and in previous interviews, had indicated it’s going down this line, where it would become the hub for such collaboration.

Skype understands today’s work goes beyond just desktops, which is why it needs to support browsers along with mobile platforms. Andy Abramson, a well-known VoIP blogger, points out he has gotten similar indications from Dr. Jonathan Rosenberg (Father of SIP) and Skype’s GM for Skype for Business David Gurle (ex-Microsoft), two respected names in the voice-over-Internet community.

Skype for Business has the potential to transform the enterprise telephony landscape, especially if Skype doesn’t fall prey to old thinking. It would need to think beyond PBX to have a lasting impact. Sure, some of the traditional companies are going to ignore Skype – they will any way – but it would be a good way for Skype to grow-up with the customer base which has made them so successful: little businesses of today.

Thousands of startups that use them for communication will be more open to Skype’s presence and IM services, video services, its collaboration platform and possible scheduling features. Folks at Facebook recently showed us how to re-invent the email inbox by transforming the tool (the email inbox) to fit the user behavior. I hope Skype does precisely that.

Skype as a Platform for growth. Taking a page from Netflix platform strategy, Skype is looking to transform itself into a platform. In a conversation before he left the company, former CEO Josh Silverman told me the main reason why Skype was expanding in Silicon Valley: It saw an opportunity to expand its footprint, in other devices and consumer electronics, for example. “There is a huge demand for us to build Skype into other people’s experiences,” Silverman said.

Just like Netflix, Skype needs to embed itself in many places for people to start using its dialtone to make calls to non-Skype numbers and thus bring in the dollars. This is an area where the company is looking at an uphill climb.

Graphic by Phil Wolff via Flickr.

Phil Wolff, in a recent blog post over on Skype Journal raised some potential questions about Skype’s growth when Skype announced that 25 million users connected to the Skype network on a recent Monday. Wolff pointed out it took seven months for the service to show 9.1 percent gain in daily online users.

In other words, it’s likely Skype is hitting a ceiling of usage of sorts, mostly because it’s now competing with many different communication-centric Internet services like Facebook and Twitter. Perhaps in order to overcome these issues, Skype needs to go partner up with different web players – like LinkedIn and Facebook (already in place) — to find new growth opportunities.

So perhaps now you know why Skype is on a hiring binge.

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