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Skype tries to make a comeback due to financial crisis
By siliconindia
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Thursday, 23 December 2010, 02:00 IST |
1 Comments
SAN FRANCISCO: Skype, the seven-year-old company is counted amongst one of the Internet's most popular services where it's the cheapest mode of talking to someone far away. People use the term "Skype me" more than saying call me. Even with the extreme rate of popularity, the company does not have a very strong financial front. Its history states that after being sold to eBay, it was taken private but now, it's trying to make a comeback with an initial public offering.
Skype has almost 124 million users out of which Skype is trying out tricks to make a certain amount of money under the guidance of its new chief executive, Tony Bates. Bates is eying the possible new markets like corporate phone systems and mobile devices, both highly competitive.
In the first six months Skype had recorded $406 million in revenue which was 25 percent more from the period a year earlier as stated by the company's recent filing with the Securities and Exchange Commission. Net income was down 42 percent to $13 million. The revenue has been generated by the users who make paid calls although only 6.5 percent of Skype's users pay to make calls from their computers to landline and mobile phones. Most of the people don't even pay a few pennies to make calls through Skype.
Charles Golvin, an analyst for Forrester Research opined that it can cost Skype dearly to lose the free users and converting them to paid customers is going to be a difficult task. "I find it hard to understand why an investor would feel enthusiastic about owning that stock when the prospects for revenue growth are dim," he said. "They may be growing revenue, but it's not like its growing to billions of dollars."
Bates started with his services to Skype in October from Cisco Systems, where he led its enterprise, commercial and small business division. He explained his fondness of Skype's complex infrastructure in his interview as a Chief Executive, which handled 25 million users simultaneously last month, the most in its history. He used the service in Alaska where instead of waiting in the queue, he merely connected to the lodge's Wi-Fi and used the Skype app to check his messages. "Universal, and useful and wonderful, they're the things that Skype can do," Bates said. "They're not easy to do on a global scale."
Bates opines that Skype is capable of offering more than just a premium phone and video services. Possibilities of Skype embedding its service with other Web companies in order to grow fast were also mentioned by him. There is a feature available that permits the users to get their Facebook news feed directly in their computer monitor's Skype window and to call Facebook friends who are Skype users. This feature was introduced by Skype in October.
