September 09, 2005

Feels like a Dot Com

Posted by Scott at 06:17 AM

I was just reviewing my morning email and I saw this in my inbox from the Wall Street Journal:

EBay is in talks to buy Skype Technologies, a Luxembourg firm that offers free global phone service on the Internet to about 52 million subscribers. The New York Post, which first reported the talks, said the price tag could be $5 billion. The Wall Street Journal said it could be $2 billion or $3 billion.

That's billion with a 'b' folks. As in thousands of millions. Let's review Skype's history (via Wikipedia)

  • April 23, 2003: Skype.com and Skype.net domain names registered
  • August 29, 2003: First public beta version released
  • June 15, 2004: Beta release of version 0.98.0.28 with first support for SkypeOut. Credits by voucher only.
  • June 27, 2004: SkypeOut credits first available for purchase on Skype website.
  • July 27, 2004: Release of Version 1.0 for Windows.
  • October 20, 2004: First time 1 million Skype users are online at once.
  • February 14, 2005: First reached 2 million online.
  • March 10, 2005: SkypeIn Public Beta starts.
  • March 11, 2005: Skype press release reports 1 million Skype-out users and 29 million registered users.
  • March 11, 2005: Software has been downloaded 84 million times and 5.98 billion talk minutes served.
  • April 15, 2005: Downloaded more than 100 million times.
  • May 18, 2005: Three million online at once.
  • June 19, 2005: Ten billion minutes of voice conversation served.
  • August 31, 2005: Skype launches the new "1.4 beta" containing improved sound and call forwarding.

Less than 2 1/2 years from domain registration to being bought for billions. A company roughly the age of Timothy. Whoa! I'm feeling whoozy! It's enough to make Google's catapulting into a household name look tame by comparison.

A company that allows people to talk to each other for free over the internet. How do they make money?

"Volume!"

(a little reference to the old Saturday Night Live skit about First Citiwide Change Bank — all they do is make change). Yes, I know that Skype has fee based services as well...

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Comments

Nice Reference to SNL

Posted by: Chris at September 9, 2005 07:57 PM

According to this story, it looks like the price tag would be around $4.1 billion. Move over Dr. Evil! Your little "one miiiillion dollars!" is chump change! You threatened destruction. Skype offers voice calls over the internet. No "Laaaasers" or satellites involved.

http://news.designtechnica.com/article8293.html

Posted by: Scott at September 12, 2005 06:35 AM

No sooner to I pass on that rumor when the WSJ emails me the following revised number: $2.6 billion. Here's the excerpt:
"EBay announced the acquisition of Skype Technologies, the Internet-telephony company, for $2.6 billion in cash and stock. As The Wall Street Journal reported last week, the deal represents a dramatic shift in strategy for the world's largest online auction site. Skype has been the most popular provider of Internet-based phone-service, known as Voice over Internet Protocol, or VOIP. Its basic service is free -- it makes money by offering premium services -- and the privately held company has only about $50 million in revenue. But the VOIP market is exploding, and giants like Microsoft, Google and Yahoo are hoping to dominate it. The emergence of eBay as a suitor revealed a lot about the auction leader's growth prospects and strategy, the Journal said. While still dominating its field, eBay's core business is maturing, and the company has been searching for new product categories and international markets."

Heck! Even $50 million in annual revenues for a ~3 year old company is still pretty impressive! -- Scott

Posted by: Scott at September 12, 2005 06:47 AM