Four years on, the two are set to part, with big question marks over Skype’s place in an increasingly competitive landscape.
Skype, which will become a separate company next year, is now worth just $1.7 billion on eBay’s books. The company has not prospered under the auction giant - the synergies have always been slight, and Skype has not always been seen as a priority.
The company has also been hit by a protracted legal tussle involving its founders. That lawsuit, which concerns the intellectual property underpining the service, has influenced the company’s restructure; the future Skype will be 14 per cent-owned by its founders, 30 per cent-owned by eBay, with the rest going to a group of new investors.
It is a good time for Skype to be taking control of its own destiny. Earlier this year Google launched Google Voice in the US to enter the VoIP (voice over internet protocol) market that Skype pioneered. Last month the search giant acquired VoIP network Gizmo5 to help build its presence in the market.
The mobile phone is the big market these players will want to crack. The prospect of marrying VoIP with mobile web connections is compelling, especially in Asia where mobile penetration is far higher than PC internet take-up. Given Google’s drive into mobile via its Android platform, Skype will need to be sure it can keep up.
The company is beginning to think seriously about its branding. It has appointed Rapp and Wolff Olins to develop a global branding campaign and CRM programme (it also hired TBWA, but the two have since parted company). It has also been hiring, bringing in Dan Neary as the vice-president and general manager for Asia-Pacific.
For all its issues, it remains a hugely popular service, with 521 million users in the third quarter. The question it faces is how loyal these users will be when alternative services come along.
Jonathan Bonsey, principal, creative and managing director, Bonsey Design Partnership
“I like the way the Skype guys sold the brand to eBay but retained the core code for which eBay pays a licence fee.
It will be tough to break the loyalty of Skype users, even though Skype never did and still does not do any marketing.
Being set free from eBay allows Skype the freedom to be itself. Skype can now raise money as it wishes for more R&D to make itself more reliable and innovative.
Have you seen the cost of roaming and international calls? Skype’s big opportunity lies here. You can already use Skype on many mobile phones, but it is still not as reliable as it is on a PC.
To keep its subscribers, Skype can improve its core functionalities. The IM functionality is lightweight, fast and robust, but higher call quality would be great.
To attract new subscribers, Skype could integrate with Facebook Connect to be the voice function that connects friends on Facebook. That would be hugely cool.
Skype and telcos have different agendas. Also, Skype is a global software product (which happens to provide VoIP). No telco has a compatible culture or breadth. Facebook, Plaxo or Twitter would be better bedfellows for Skype.”
Melvin Kee, senior VP, MobileBehavior
“This is a good move for Skype.The initial droolworthy scenario of pairing Skype’s communications platform with eBay’s auction marketplace didn’t benefit either buyer or seller in any tangible way. This sale by eBay returns power to Skype’s original co-founders to focus on building a new strategy that will enable Skype to move and react to the market in a smarter and quicker fashion.
Skype has long understood it needs to break out of telephony services and utilise its VoIP technology as an enabler for third-party services. The fact that the eBay acquisition did not include the rights to the enabling software has played a significant role in Skype’s stagnant growth in terms of product breadth and offering.
Now I think we will see many more true collaborative partnerships with handset makers, telcos and software developers. This will certainly open revenue streams.
I’m a huge fan of VoIP technology. My hope would be firstly that Skype is freed from a controlled and restrictive client software environment and that its software development is opened up so its VoIP technology can be viewed as a pure service for web developers or service providers to create win-win revenue scenarios.”
Got a view?
Email [email protected]
This article was originally published in 3 December 2009 issue of Media.
Skype, which will become a separate company next year, is now worth just $1.7 billion on eBay’s books. The company has not prospered under the auction giant - the synergies have always been slight, and Skype has not always been seen as a priority.
The company has also been hit by a protracted legal tussle involving its founders. That lawsuit, which concerns the intellectual property underpining the service, has influenced the company’s restructure; the future Skype will be 14 per cent-owned by its founders, 30 per cent-owned by eBay, with the rest going to a group of new investors.
It is a good time for Skype to be taking control of its own destiny. Earlier this year Google launched Google Voice in the US to enter the VoIP (voice over internet protocol) market that Skype pioneered. Last month the search giant acquired VoIP network Gizmo5 to help build its presence in the market.
The mobile phone is the big market these players will want to crack. The prospect of marrying VoIP with mobile web connections is compelling, especially in Asia where mobile penetration is far higher than PC internet take-up. Given Google’s drive into mobile via its Android platform, Skype will need to be sure it can keep up.
The company is beginning to think seriously about its branding. It has appointed Rapp and Wolff Olins to develop a global branding campaign and CRM programme (it also hired TBWA, but the two have since parted company). It has also been hiring, bringing in Dan Neary as the vice-president and general manager for Asia-Pacific.
For all its issues, it remains a hugely popular service, with 521 million users in the third quarter. The question it faces is how loyal these users will be when alternative services come along.
Jonathan Bonsey, principal, creative and managing director, Bonsey Design Partnership
“I like the way the Skype guys sold the brand to eBay but retained the core code for which eBay pays a licence fee.
It will be tough to break the loyalty of Skype users, even though Skype never did and still does not do any marketing.
Being set free from eBay allows Skype the freedom to be itself. Skype can now raise money as it wishes for more R&D to make itself more reliable and innovative.
Have you seen the cost of roaming and international calls? Skype’s big opportunity lies here. You can already use Skype on many mobile phones, but it is still not as reliable as it is on a PC.
To keep its subscribers, Skype can improve its core functionalities. The IM functionality is lightweight, fast and robust, but higher call quality would be great.
To attract new subscribers, Skype could integrate with Facebook Connect to be the voice function that connects friends on Facebook. That would be hugely cool.
Skype and telcos have different agendas. Also, Skype is a global software product (which happens to provide VoIP). No telco has a compatible culture or breadth. Facebook, Plaxo or Twitter would be better bedfellows for Skype.”
Melvin Kee, senior VP, MobileBehavior
“This is a good move for Skype.The initial droolworthy scenario of pairing Skype’s communications platform with eBay’s auction marketplace didn’t benefit either buyer or seller in any tangible way. This sale by eBay returns power to Skype’s original co-founders to focus on building a new strategy that will enable Skype to move and react to the market in a smarter and quicker fashion.
Skype has long understood it needs to break out of telephony services and utilise its VoIP technology as an enabler for third-party services. The fact that the eBay acquisition did not include the rights to the enabling software has played a significant role in Skype’s stagnant growth in terms of product breadth and offering.
Now I think we will see many more true collaborative partnerships with handset makers, telcos and software developers. This will certainly open revenue streams.
I’m a huge fan of VoIP technology. My hope would be firstly that Skype is freed from a controlled and restrictive client software environment and that its software development is opened up so its VoIP technology can be viewed as a pure service for web developers or service providers to create win-win revenue scenarios.”
Got a view?
Email [email protected]
This article was originally published in 3 December 2009 issue of Media.
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