Skype: How A Startup Harnessed The Hoopla
biz.yahoo.com
The buzz began building this summer. In June, reports surfaced that Yahoo! was in merger talks with Skype Technologies, the Internet-telephone company. Before long, rumors were circulating that News Corp. (NYSE:NWS - News) and Google, too, were interested in Skype. In the end, the acquirer was perhaps the least likely suitor of all: eBay Inc. (NasdaqNM:EBAY - News), which announced on Sept. 12 that it would pay $2.6 billion in cash and stock for the Luxembourg outfit, with a further $1.5 billion to come by 2009 if Skype hits key performance targets. How did Skype, founded just three years ago, manage to parlay itself into that kind of prize? Sure, it has 54 million users hooked on its free phone service. But with revenues expected to hit just $60 million this year and break-even not likely until late 2006 even should Skype's rapid subscriber growth continue, the price astonished many observers. Good timing is part of the answer, given the huge appetite among media and Web companies for an Internet-telephony play. |
