Cisco makes run at Skype: report

Robert Clark | August 31, 2010

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In yet another apparent deal in the current M&A binge, Cisco has made an offer to buy Skype, according to the influential Tech Crunch blog.

VoIP specialist Skype is planning for an IPO by the end of the year, aiming to raise $100 million.

Skype was seeking a valuation of the company of around $5 billion, Tech Crunch reported. It said Google also was interested in buying the business, but decided it would attract the interest of anti-trust enforcers.

Google last week started a VoIP service for the 176 million users of Gmail in direct competition to Skype.

Skype was founded by Kazaa pioneers Niklas Zennström and Janus Friis in 2004. They sold it to eBay in 2005 in a much-questioned deal, and the auction firm unloaded 65% of the company to private equity firms in a 2009 deal that valued it at $2.75 billion.

Skype has 560 million registered users, of whom 8.1 million are fee-paying, and is the world’s largest carrier of international voice minutes.

It’s not clear what a Skype deal would deliver to Cisco, as it would put them in competition with their telco customers.

Originally an IP networking specialist, Cisco has diversified extensively in recent years into video, home networking and data centers.

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Robert Clark

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