Last week Skype and eBay announced that the Voice Over IP company would be go its own way. eBay Purchased Skype in September 2005 for approximately $2.6 billion, and now a small group of venture capital funds have agreed to acquire a majority stake in Skype in a deal worth $2.75 billion.
This isn’t a surprise that eBay is divesting its stake in Skype. While eBay and PayPal have worked well together, allowing buyers and sellers to seamlessly pay for goods bought and sold in online auctions, Skype was a strange fit. The thought for eBay at the time was that this would allow buyers and sellers to have another level of communication. But instead, Skype kept doing its thing, which was to provide affordable long distance phone calls via the Internet.
This isn’t to say that Skype was a money loser. In fact, Skype has been a major revenue stream, and one that shows no sign of drying up. According to reports, Skype has brought in $323 million so far this year, and revenue has increased by 44 percent from 2007. The company has been on track to break $1 billion yearly revenue by 2011.
So the question this brings up is what it means to VOIP on mobile phones? At this point I can only speculate, but it seems that the investors could have big things in mind. It was announced that the buyers include private equity firm Silver Lake Partners, venture capital firms Index Venture and Andreessen Horowitz and the Canada Pension Plan Investment Board. It is worth noting that Andreessen Horowitz is a new firm headed by Netscape co-founder Marc Andreessen. These groups wouldn’t be investing if they didn’t have big plans, and it probably includes more than just calls between computers, and likely could be an even greater emphasis on mobile devices.
Of course the flip side is how the carriers will react. Already some carriers have balked at VOIP, or at least made it difficult to use on some phones. This is, of course, is because cheap or at least cheaper calls cut into the core business.
So one possible future could be VOIP phones that work anywhere Wi-Fi and eventually WiMAX is available. The question in this case would be whether direct calls between users would remain free. But given that Skype has still made a lot of money, while calls between users are free is proof that this is a good way to get people to use the service—with the profits being driven through sales of handsets and other devices, as well as Skype to mobile and Skype to landline calls.
And if Skype doesn’t jump on the mobile VOIP handset, it seems likely that others will. While there have been a few handsets out there, the biggest hurdle is overcoming the current level of network infrastructure. But with folks like Marc Andreessen in this arena, it seems only more likely that VOIP mobile handsets could give cellular mobile handsets some competition.