Skype, the Luxemborg-based internet video phone service, filed for its initial public offering (IPO) on Monday (August 9) to list on the Nasdaq Stock Market. The value was tentatively set at $100 million, a number analysts suggest is merely a rough estimate set to help the Securities and Exchange Commission calculate a filing fee. They have yet to release a sales date or price.
The filings reported that in 2010, Skype has already generated more than $406 million from its over 560 million registered users, up 41% year-over-year. These numbers are staggering considering that only 6% of its users actually pay for the service and that Skype makes the majority of its money from users calling landlines or cellular phones. The report also states that users have collectively made more than 95 billion minutes of voice and video calls and have sent more than 84 million SMS messages so far in just half a year.
EBay bought Skype in 2005, selling 70% of its ownership four years later in September 2009 for $2.75 billion dollars to the private equity firm Silver Lake Partners. The firm currently owns 56% of that share; the remaining 14% is owned by the firm Joltid, controlled by Skype foudners Niklas Zennstrom and Janus Friis.
While free Skype-to-Skype calls are an enticing way to draw in customers, the company’s intentions moving forward are to build upon its stellar growth and concentrate on turning these users over into paying customers. New investment strategies include:
[INDENT]"Develop new monetization models, including advertising. Our users made over 152 billion minutes of Skype-to-Skype calls in the twelve months ended June 30, 2010. We believe this represents a meaningful opportunity to increase our revenue from alternative monetization models, including advertising, gaming and virtual gifts."[/INDENT]
Skype's biggest break came when it reached an agreement with Verizon Wireless back in March for data services charges. Mobile providers were extremely apprehensive of a service that would essentially allow their users to bypass voice minutes, until Verizon softened up to the idea after realizing just how lucrative an investment mobile data service charges truly are.
EBay estimates that Skype will reach over $1 billion in revenue by the end of the fiscal 2011.