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Cisco to buy Skype, pre-IPO? (and lock out)

August 30, 2010 | Chris Payatagool
cisco_skype.jpgBy Richi Jennings.

Here's an interesting rumor. Apparently, Cisco wants to buy Skype, thus skipping the P2P VoIP company's initial public offering. In IT Blogwatch, bloggers ponder what it all means (and if it's true).

Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention Valérie Lemercier's strangely hirsute shoulders...

Michael Arrington crunches the rumors:

    Cisco has made an offer to acquire Skype ... says one of our more reliable sources. ... If true this would be one very big acquisition. Skype insiders are hoping for a ... valuation of $5 billion or so, we've heard.
    Google was also rumored to be sniffing around Skype, but antitrust concerns may have persuaded them not to make an actual offer. For M0RE

Brian Caulfield adds:

    A bid for Skype would head off a long-awaited initial public offering for the London-based company. It would also pit Cisco, a networking gear vendor, against Google, which has its own telephony offerings. For M0RE

Om Malik sees services -- and conflict:

    It would be the first time the router and switch maker would enter the world of services. ... [That] would put the company in competition with many of its customers, especially the telephone and cable companies.
    Cisco does have to face the harsh reality of finding revenue and profit growth to keep its shareholders happy. ... For the first six months of 2010, Skype reported revenue of $406 million, and net income of $13.2 million. For M0RE

Dean Takahashi thinks the rumor has legs:

    One of my own sources confirmed that Cisco has made the offer and it is serious about combining Skype's internet communications service with its own WebEx collaboration tools. ... [Skype] says it has 560 million registered users, with 124 million using it every month. 8.1 million of those users pay an average of $96 a year for the service.
    Cisco [has] ... plenty of presence in internet applications. So there is some reason for Cisco and Skype to be married. ... After the surprise acquisition of security firm McAfee by Intel ... just about any combination of tech companies is possible. For M0RE

Meanwhile, Krishnan Subramanian adds 2+2:

    This is interesting after the recent announcement by Cisco ... that they will soon be releasing a tablet based on Android OS to bring Telepresence to the market. ... Not surprising that they want to grab a VOIP provider with a huge following among the masses. If the rumor is true ... they are serious about making a run in the consumer market.
    If you look at the tools Google is bringing in to their Google Apps Suite, they are aiming towards a suite that will help members of an organization work, communicate and collaborate. ... A good alternative to Cisco's Webex Collaboration Suite. A tool like Skype ... will come handy for Cisco to target ... the world of SMB. For M0RE

And Finally...
Lock Out (Valérie Lemercier's strangely hirsute shoulders)

Richi Jennings is an independent analyst/consultant, specializing in blogging, email, and security. A cross-functional IT geek since 1985, you can follow him as @richi on Twitter, pretend to be richij's friend on Facebook, or just use good old email: [email protected].

You can also read Richi's full profile and disclosure of his industry affiliations.


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