Taking a couple of minutes to catch up on some email and blog backlog. Louis Philip has posed the question of who's going to buy Skype. It's a timely question, given all the recent blogospheric attempts to value the company, and even moreso because I have just recently heard two stories from completely different (though I think credible and well-connected) sources on two continents about approaches being made.
Interestingly, both stories involve the same figure (over nine digits), though they differ in some respects. One version has a named bidder (a very well-known internet brand) expressing an interest and then walking away, stating that the ten-figure price was too high. The other version has an unnamed party tabling an outright offer in the same amount, but being rejected.
These are, however, only stories, though I think it's reasonable to expect that Skype is generating a lot of interest. I also think the company is probably most focused on building the user base and getting Skype embedded in all sorts of places to solidify its presence. Anyone inclined to do so could make a lot of the fact that Draper backed, built up, and then sold Hotmail, though I would argue that Skype is evolving in much richer and perhaps more unpredictable ways than email ever could/will, which I would guess makes timing a sale exceptionally difficult. All in all, I'm not at all sure that Skype would even be thinking about selling out at this stage in its development. I think there is much, much more to come, which any short-term valuation might not encompass.
For what it's worth, I would throw out two names, neither of which is the company involved in the rumor I cite above. My money has always been on Google, for obvious reasons, many of which have been touched on previously, either by me or many others:
- Distributed computing - imagine the quality of a Skype service powered by Google supernodes around the world. The recent dark fiber hoopla and the Web Accelerator announcement demonstrate that Google is aiming at an evermore robust, stickier service, and I find few services in the world which are stickier than Skype, particularly now with centralized contacts making it more flexible.
- Google is already arguably the world's largest directory, so why shouldn't it encompass a high quality tool for connecting people and businesses directly from its own pages?
- Notable absence from the IM major league, and we know that Skype kicks serious butt in this regard.
The other name we have to consider is Microsoft, though I have previously been less willing to accept this scenario. Then again, the company has $37.6bn in cash, cash equivalents and marketable securities, and is known for making sizeable acquisitions. Skype's push into mobility is pretty well aligned with Microsoft's own ambitions, and the Groove Networks acquisition seems to demonstrate an appetite for things P2P. On the downside, we obviously have to question cannibalization of its investments in things like RTC and obviously its own MSN Messenger platform. [A Diamond Class mega-value reader tells me that his data shows an average of 70m concurrent MSN Messenger users online through a 24-hour cycle, vs. 2 - 2.5m for Skype, which is a lot of potential cannibalization]. [UPDATE: A helpful reader chimes in to remind me of what I have pointed out before - Microsoft could achieve many of the same aims by acquiring Paradial, which would be much cheaper and straightforward.]
I've got a beer riding on this one, so come on Sergei and Larry! Seriously, I would be surprised if this discussion is even relevant over the next 12 months, but no doubt speculation will intensify as Skype grows and evolves.