Buzz in the blogosphere today is all about Cisco buying Skype. It’s not confirmed, but the talk came out of TechCrunch, which stated that Cisco has made an offer prior to Skype’s high-dollar IPO.
The VoIP market is already superheated, and users are jumping up and down with excitement over the Google VoIP offering. The Cisco deal–if it’s on the level–would be a good thing for both parties, and for VoIP users as well. Skype of course, has a great service, a huge user base, and of course, incredible name recognition. It’s already become a verb–I regularly have people asking me to “Skype” them. My unofficial rule of thumb is that whenever a company name becomes a verb, they’re onto something and destined to make money. Cisco will add yet another dimension to the Skype juggernaut with their solid reputation for ultra-reliable networking equipment.
Another difference in operational theory may also come into play. Skype was started as a dotcom company, which means that when it launched, the founders followed the dotcom wisdom and offered a free service. And although they are making money, most of Skype’s registered users are still free users. Cisco is an old-line company that still believes in profits and bottom lines. At this point, I don’t think Cisco would axe the free bit, but they would certainly put a lot more emphasis on the paid end of the business. Especially since the Skype IPO is said to be worth about $5 billion, and Cisco would have to pony up some pretty big bucks to bring Skype into the Cisco fold. I’d look for many more business and professional-level services to be added to the Skype portfolio should the acquisition actually take place.
