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Skype growing to eBay’s initial valuation
Skype’s Chief Strategy Officer Christopher S. Dean speaks candidly
by MeetTheBoss.TV
In the week that online retailer eBay has reported that their turnover is up by nine percent to $2.2bn, Skype’s Chief Strategy Officer Christopher S. Dean speaks candidly for MeetTheBoss.TV on how their recent break up was clearly the best thing for both parties.
eBay, which also owns the PayPal payments system, is in the second year of a three-year restructuring, part of which involves making its site easier and cheaper to use. Last year saw the online auctioneer sell its telephony business, Skype, at a $1.1billion loss, having acquired Skype four years earlier for $3.1 billion. At the time, this had massive ramifications for both companies, including a drawn out legal battle over just who had the rights to Skype’s innovative technology. What’s more, investors sparked rumours that Skype was not the ‘big money spinner’ that eBay had once lauded them as.
Christopher, however, in his interview for MeetTheBoss TV, soon put these concerns to rest: “I do think that the amount of money that eBay paid for Skype was very dear when they bought it, but Skype is on its growth trajectory today and is very much growing into the valuation that was ultimately paid for the company.”
Nonetheless with eBay sticking to revenue forecasts for the full year of $9bn, and with turnover growing by 18% since relinquishing Skype, its easy to see why the critics would come down hard on the Skype model.
“Actually Skype has been an incredibly successful business since we cut ties with eBay,” offers Christopher. “We have 560 million users globally at this stage. We did $713 million of revenue last year, which marks a 30 percent increase year-to-year, and the company's been profitable for the last 12 quarters.”
In the end, the split has been to the benefit of both parties, suggesting that maybe they just weren’t meant to be: But now, with Skype’s much publicised move into browser-based communication, perhaps the future relationship between such giants could get competitive.
To watch the interview with Christopher S. Dean in full, please go to http://www.meettheboss.tv. Still not sure? Read the exclusive excerpts below and decide for yourself.
Jon Spragg: I wanted to talk about, you mentioned at once eBay owned, and I know that they sold at the end of last year in November 2009. They sold for less than what they bought it for. So, I guess, that sparked a few rumors that, you know, was it a bigger money spender than people had thought or, you know, had it had its day? How did that impact the sort of strategy and the way that you look forward for Skype?
Christopher Dean: That's a good question. I think that Skype has been an incredibly successful business. You know, we have 560 million users globally at this stage. We did $713 million of revenue last year. It was a 30 percent increase year-to-year and the company's been profitable for the last 12 quarters. So, I do think that the amount of money that eBay paid for Skype was very dear when they did it. And when it was spun out, it was less than the original amount. But Skype on its growth trajectory today is very much growing into the valuation that was ultimately paid for the company.
So, in terms of the influence of the strategy, you know, I don't think that it actually impacted. What the company was valued at and what it had been spun out at did not impact, does not impact the strategy of the company. Our focus is on the markets at hand, the services we have, how we intend to compete in the market and how we intend to continue to grow and deliver voice and video communication services to millions of users on a global basis.
Jon Spragg: I wanted to talk about your team, the team that you lead at Skype and it's been described as the incubator and the strategic planning hub for new ideas and projects at Skype. How does the work your team is currently doing support Skype's technology vision?
Christopher Dean: one of the new and interesting areas that Skype is focusing on is taking voice and video calling and IM and presence to the Web and driving that into the fabric of the Web. So, that if you go to amazon.com at some point in the future, you may be actually be able to go co-shopping with your wife while you're in the United States and she's in England. You can go shop together over using – having a voice and video call.
So, driving voice and video into the fabric of the Web and enabling that and moving Skype from being purely a software download client into a browser-based communication is one of the key areas that we're focused on and is one of the key areas that my innovation team is helping deliver some technology around.
To watch the interview with Christopher S. Dean in full, please go to http://www.meettheboss.tv.
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