Skype Files For IPO Worth Up To $100 Million


Skype on Monday filed a form S-1 with the U.S. Securities and Exchange Commission, the usual first step for a company readying an initial public offering. Skype said it plans to offer $100 million in shares, and expects to be traded on the Nasdaq.

In its filing, Skype did not mention the number of expected shares or an expected price range for the shares. The picture illustrated by the S-1 filing indicates a company whose subscribers and revenue are way up, but whose profits are sluggish.

According to Skype, which is based in Luxembourg, its number of registered users hit 560 million by the end of June, up from 396 million at the end of June 2009. Its revenue for the first half of 2010 is $406.2 million, up 25 percent from $324.8 million in the first half of 2010.

Its first-half profits, however, are $13.1 million, down from $22.5 million in the first half of 2009.

Skype has also seen losses four times in the past five years. Only about 8.1 million of the users it counted at the end of June -- some six percent of the 124 million users Skype describes as "average monthly connected users" -- are paying customers. That number is up from the 7.3 million paid users Skype said it had at the end of December 2009, however.

"Although we have achieved significant global scale and user growth to date," writes the company in the S-1, "the penetration of our connected and paying users is low relative to our market opportunity."

Other notable numbers from Skype's filing included that it had $71 million in sales and marketing expenses in the first half of 2010, up 24 percent from the year-ago period. It also has $85.5 million in cash and cash equivalents on hand as of the end of June, and 839 employees and contractors.

Launched in 2004, Skype was originally acquired by eBay in 2005, and eBay had mentioned spinning off Skype as an IPO in early 2009. Things got messier between eBay and Skype later in 2009; in September, eBay confirmed plans to unload its majority stake in the VoIP service to private investors for $1.9 million. eBay holds a 35 percent stake in Skype today, while an investor group led by Silver Lake Partners is the majority owner.

The IPO's underwriters include Goldman Sachs, JP Morgan Chase and Morgan Stanley.

Skype's relationship to the channel has been complicated.

Last fall, the company told CRN it had begun inviting potential reseller partners for enterprise sales of its VoIP software application, and Skype Chief Strategy Officer Christopher Dean has continued to mention the channel's role in Skype's expansion plans in appearances around the world.

Dominant vendors in the video conferencing and collaboration channels have continued to regard Skype as both a partner and a potential threat, especially as Skype integration for a host of UC and telephony platforms becomes more common.

In May, Skype said it would adjust its subscription plans for how often customers use the service, and a group video chat feature was also mentioned as being in test pilots. At the time, TeleGeography Research noted that Skype calls account for 12 percent of all international calls, and that number was expected to grow.