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Skype Gathers Interest as Next Top Tech IPO

Skype looking for $100 million in an initial public offering

Skype, the Internet phone and video calling service company with its latest IPO announcement has generated a lot of interest as the high-tech industry's next major initial stock ($100 M) offering. After the IPO (Price range and date not set yet), Skype will be trading on the Nasdaq Global Market. The intention to go public certainly signals optimism on the part of this prominent VoIP company in market conditions for Q3 2010.

Skype was initially acquired by eBay in 2005 for $2.6 billion. But the online auctioneer struggled to integrate Skype, and admitted that it was not able to realize its original plans to utilize Skype as a real-time tool for its customers when sealing online deals. In 2007, eBay had to take a $900 million impairment writedown against Skype's value signifying that it had incurred a loss from this investment. Last year it decided to sell a controlling stake to an investor group led by the private equity firm Silver Lake, in a deal that valued Skype at $2.7 billion. The IT industry in general particularly open source vendors approved of the acquisition, hoping that it would open up the proprietary technology to more opportunities for developing applications and services compatible with the Skype platform.

The primary challenge for Skype in spite of its astounding popularity has been that many vendors like Google are increasingly offering consumer video chat, which is the core element of its business, as a free complementary service along with their products. Though Skype has been trying to monetize with paid services like SkypeOut and branch out with iPhone and blackberry applications , it is a long way off from capitalizing on its enormous user base for energizing its revenue opportunities.

Analysts currently peg Skype's worth at $1.5 billion to $2 billion as a publicly traded company. The IPO announcement has also given a fresh lease of life to buyout talks.There is no dearth of potential candidates who might be interested in Skype's prowess and global presence including Telecom companies trying to extend their VOIP reach or online companies looking to vitalize their social networking services with an exciting integration.