Skyping all over the world

Skype is a company that has fascinated me since I discovered its services. Being the technological luddite that I am, I have to admit that I wasn’t one of the first adopters of their services, more like user number 15 million and one – some four years after it launched!

It’s so simple; it enables people all over the world to connect with others, either in a personal or professional capacity, at a significantly cheaper rate – ie free – than other alternatives and has progressively entwined itself with the social networking medium My Space.

Looking at it with my M&A goggles on, the company has had a fascinating few years as well, which seems to have culminated this week with the announcement and filing for a listing on Nasdaq.

Since its inception in 2003, Skype has gone through the whole M&A cycle in a fairly short period of time. It started its M&A life with the mandatory rounds for all “technology” companies of development and venture capital funding. Then there was the inevitable rumour of a possible IPO in the summer of 2005, followed almost immediately by the acquisition of the company by Ebay for a dotcom era level consideration of $3.9 billion ($2.6bn in cash and $1.3bn in an earn out option). I have to say that at the time I personally never quite fully bought into the Ebay rationale of “combining ecommerce franchises with the leading internet voice communications” but that may be down to my limited use of Ebay more than anything else.

Skype was subject to yet another IPO rumour in 2008 as a possible exit for Ebay. However, the eventual exit came by way of a sale of 70% of the company via a private equity buyout in 2009. In fact, the 70% IBO was one of the few $2bn plus deals to actually successfully complete for the Private Equity industry in 2009.

And so now the next chapter begins with its listing on Nasdaq and it will be interesting watching how a company that has enabled us all, if we wish, to communicate in a much more convenient and cost effective manner communicate its messages for its future strategy to a technological savvy fan base.