Skype going public on NASDAQ.

Seven year old Internet phone and video provider soon debuting on NASDAQ. 

  • Many of you may have used it. Not everyone is aware that Skype was the brainchild of Danish Janus Friis and Swede Niklas Zennström.

  • Founded in 2003 by two Scandinavian entrepreneurs, Niklas Zennström and Janus Friis, the Internet communications giant Skype will be offered on the NASDAQ stock exchange for the first time on a day coming very soon. Their application for an Initial Public Offering (IPO), placed last week with the US Securities and Exchange Commission (SEC), is being underwritten by Goldman Sachs, J P Morgan Chase and Morgan Stanley.

  • After a few years of being part of eBay, Internet communications giant Skype will be offered on the NASDAQ stock exchange soon.

  • According to sources including the New York Times, Skype hopes to raise up to 100 million dollars from selling an unspecified number of American depository shares on the technology stock exchange. However, the Luxembourg-based firm - which markets services via the Internet that allow users to have online phone, video and text conversations without using traditional phone lines - did not indicate when or at what opening price their shares would be floated.

  • Although bypassing the standard telephone network, Skype not only allows users to call others free of charge but now also provides the ability to connect with fixed land lines numbers or mobile devices at low rates.

  • Skype was sold to eBay for $2.6 billion in 2005. eBay's plan was to offer customers the ability to discuss their transactions in real time. Observers have said that eBay seemed perplexed as how to handle the service, and subsequently sold close to 70% of its shares in the fall of 2009. "Skype is a strong standalone business, but it does not have synergies with our e-commerce and online payments businesses," eBay President and CEO John Donahoe said in a statement when the new majority owners were introduced.

  • Skype had revenues of $406 million in the first half this year from some 560 million registered users (a 40% increase), with some 124 million users monthly.
    However, only 8.1 million of these are "paying" customers, which was one cause for turnaround dropping by 40% in the first half of this year. Skype has booked losses in four of the last five years.

  • Zennström and Friis eventually became minority owners again at Skype after the major portion was sold by eBay to an investment consortium consisting of Silver Lake Partners, CPPIB, and Netscape founder Marc Andreessen's venture capital group Andreessen Horowitz. Niklas Zennström has now re-joined the Skype board. The investors paid around $two billion for 65% of the company, at the time valued at around about $2.75 billion. Expert analysts hope that the Skype IPO will revive interest in technology markets, much the same as when Google went public in 2004 and raised $1.67 billion.

  • For more info, see www.skype.com