One year after eBay sold its majority stake in the company, Skype plans to float on the stock market later this year. Let's look under the hood and see what it's worth.
According to its filing with the Securities and Exchange Commission, Skype made a net profit of $13.1m in the first six months of this year. The interesting part is that the IPO filing shows that only 8.1 million of Skype's 560 million registered users, or just 1.4%, were actually paying customers and only about a quarter are connected.
And according to Skype, that's a modest number. "The actual number of registered users however is likely to be lower, potentially significantly, for two primary reasons,'' it says in the filing. "First, some legitimate users may register more than once and therefore have more than one account. For example, a user who has lost his or her original Skype Name or password may simply register again and create an additional account, or a user may create separate accounts for business and personal use. Second, we experience irregular registration activities, some of which we believe are the result of fraudulent activities that involve the creation of a significant number of spurious user accounts"
The average spend this year is expected to be $96m. But even that small number was able to generate a healthy profit which suggests the margins must be massive.
Skype says it plans to add a whole lot of new features which will turn it into a money making machine including platforms for users to communicate with up to five other users in a simultaneous video conversation.
The issue for Skype will be find some way to monetize those before the phone companies claim that space.
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