Facebook, Google eyeing Skype

Internet calling wasn't a good fit at eBay, but Google or Facebook might find a way to make it work.

By TheStreet Staff May 5, 2011 12:21PM

By Scott Moritz, TheStreet

 

Skype's delayed journey toward an IPO has attracted interest from Facebook and Google (GOOG) as possible acquirers.

 

Facebook founder Mark Zuckerberg has discussed a takeover of the Luxembourg-based Net calling service, according to a Reuters report that hit late Wednesday. The story also says that Google has explored a joint venture deal with Skype.

 

Last month, Skype filed for a public stock offering, but a shakeup of top management caused the company postpone its IPO. With a little more time to consider its options in a shaky equities market, it's not too surprising to see some big players kicking Skype's tires.

 

For Facebook, Skype would primarily offer a source of revenue, something that has not been an obvious component of the Facebook business model. And with some luck, Skype would also complement the social networking experience by offering a calling and video chat feature to users.

For Google, Skype would seem to duplicate its own Google Voice and Google Talk services. But as one analyst points out, Skype's appeal is its widely used network, similar to what YouTube brought in video and what Android brought in mobile. This would fit Google's newly emphasized social ambitions and align with its ultimate aim, which is to get more ads in front of more users.

 

The news comes two years after Skype's founders moved to extract the business from eBay (EBAY), where dreams of symbiotic growth between Net calling and Web auctions never fully materialized.

 

According to its most recent filing, in 2009, Skype had an adjusted net loss of $417.5 million on sales of $343 million, excluding $376 million revenue costs, like payments to other telcos to complete Skype calls. Those numbers compare with a 2008 pro forma net loss of $269 million on sales of $328.1 million excluding $298.3 million in SkypeOut payments.

Skype said it had 663 million registered users and 8.8 million paying customers as of the end of 2010. That compares to 474 million registered users and 7.3 million people that paid for the service in 2009.

 

"Skype's a natural fit," said the analyst. "It's a social platform with a real revenue model."

 

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