Skype files for $100M IPO
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Highlights
- The internet calling service Skype is finally gearing up for an Initial Public Offering. In a registration statement with the SEC, the company announced that intends to raise a maximum of $100 million through the offering, and that it will list the stock
Skype, the popular Internet telephone service, said Monday that it hoped to raise $100 million in an initial public offering of stock.
The announcement -- which came a few days after news of the initial offering by another Internet company, Demand Media -- could help revive the market for technology offerings. Analysts have speculated that Skype's sale, planned for the Nasdaq market, could be the biggest initial offering in the technology sector since Google went public in 2004 and raised $1.67 billion.
Skype, which offers free or low-cost voice and video calls over the Internet, has grown rapidly since it was founded in 2003 by two entrepreneurs, Niklas Zennstrom and Janus Friis.
In a regulatory filing, the company, which is based in Luxembourg, said it had an average of 124 million users a month worldwide. In the first six months of this year, those users made 95 billion minutes worth of calls, the company said. But only 8.1 million Skype users are paying customers, who are charged for calls when they are made to conventional landlines or mobile phone numbers, rather than to other Skype accounts.
"They are a company that has, in terms of the product, executed extremely well for a number of years," said Ian Fogg, an analyst at Forrester Research. "The challenge for Skype in the future is how to develop new business models for video and other new technologies."
Video calling already represents 40 percent of total calling time on Skype, and analysts say this could grow further as the proliferation of smartphones enables more people to place such calls while on the go.
Skype, which is mostly used by private individuals, has also been trying to move into the corporate market, where potential customers have had security concerns.
The changes of ownership have been a distraction. Skype was acquired by eBay for $2.6 billion in 2005. But eBay struggled to integrate Skype, and last year it sold a controlling stake to an investor group led by the private equity firm Silver Lake, in a deal that valued Skype at $2.7 billion.
Mr. Zennstrom and Mr. Friis have regained a 14 percent stake in Skype, acquired when they settled a lawsuit against eBay and the investor group.
Unlike some technology companies that turn to the market to raise money, Skype is profitable, reporting net income of $13 million, on revenue of $406 million, in the first six months.
The offering will be underwritten by Goldman Sachs, JPMorgan Chase and Morgan Stanley.
The announcement -- which came a few days after news of the initial offering by another Internet company, Demand Media -- could help revive the market for technology offerings. Analysts have speculated that Skype's sale, planned for the Nasdaq market, could be the biggest initial offering in the technology sector since Google went public in 2004 and raised $1.67 billion.
Skype, which offers free or low-cost voice and video calls over the Internet, has grown rapidly since it was founded in 2003 by two entrepreneurs, Niklas Zennstrom and Janus Friis.
In a regulatory filing, the company, which is based in Luxembourg, said it had an average of 124 million users a month worldwide. In the first six months of this year, those users made 95 billion minutes worth of calls, the company said. But only 8.1 million Skype users are paying customers, who are charged for calls when they are made to conventional landlines or mobile phone numbers, rather than to other Skype accounts.
"They are a company that has, in terms of the product, executed extremely well for a number of years," said Ian Fogg, an analyst at Forrester Research. "The challenge for Skype in the future is how to develop new business models for video and other new technologies."
Video calling already represents 40 percent of total calling time on Skype, and analysts say this could grow further as the proliferation of smartphones enables more people to place such calls while on the go.
Skype, which is mostly used by private individuals, has also been trying to move into the corporate market, where potential customers have had security concerns.
The changes of ownership have been a distraction. Skype was acquired by eBay for $2.6 billion in 2005. But eBay struggled to integrate Skype, and last year it sold a controlling stake to an investor group led by the private equity firm Silver Lake, in a deal that valued Skype at $2.7 billion.
Mr. Zennstrom and Mr. Friis have regained a 14 percent stake in Skype, acquired when they settled a lawsuit against eBay and the investor group.
Unlike some technology companies that turn to the market to raise money, Skype is profitable, reporting net income of $13 million, on revenue of $406 million, in the first six months.
The offering will be underwritten by Goldman Sachs, JPMorgan Chase and Morgan Stanley.
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