Why doesn’t any one want to buy Skype?

It’s kind of hard to fathom that the only way for eBay to get rid of Skype is to go the IPO route. After all nobody is going IPO right now because the market is in such a hole, and while its not talking of doing anything until 2010, even then its unlikely that the market would be all that shapely for an IPO like Skype.

Surely you might think there would be a host of companies lining up to take Skype off eBay’s hands.

Skype is a clear leader in the VoIP stakes and thats going to be a key battleground for online dominance in the future. It seems clear that technologies like IM/VoiP/video conferencing and mobile will converge and whoever has Skype would have a dramatic advantage on this front.

I was one of the millions who downloaded the Skype iPhone application and I have no doubt its a game-changer. I now use Skype on the iPhone more than I use our landline. Indeed, I’m now seriously considering a move to naked DSL. Once the 3.0 version of iPhone comes out and Skype makes use of the push functionality to enable you to receive Skype calls on your mobile without having the app open, then thats going to increase its value measurably again.

eBay thinks Skype can make it as a stand-alone business but I’m sure its value could be increased dramatically if one of the big IM vendors had ownership of it and integrated it into their IM client. So what’s stopping them?

For me Google would be the natural fit – they haven’t had a huge amount of success getting GTalk to catch up with Yahoo and Microsoft’s messenger but if you combined their base with the Skype base you’d certainly have a much bigger number and one that would be pretty dominant in the business space. If you tied in the cool technology that Google acquired through Grandcentral then Google would pretty much overnight be a commanding leader in this consumer converged IP communications space.

But it appears Google thinks it can go it alone in this space. It probably thinks Grancentral, now Google Voice, is a home-run and that it doesn’t need to fork out a couple of billion for Skype. However, I think this is such an important space – and one that is generating immediate returns – that I’d certainly be tempted to get as much critical mass as quickly as I could if I was running Google. I’m guessing though the technology integration issues here would be massive and that might be the real killer on this potential deal.

Skype would be a great buy for Microsoft. Microsoft IM does much better with the youth market while Skype is more of a business tool so there wouldn’t be much overlap. And if you could turn even a small proportion of that Microsoft IM into paying Skype users, you’d very quickly increase Skypes revenues. But Microsoft probably can’t go down that path due to the very tight-knit relationships it has built with telcos all over the world. Here in Australia, for example, it has a very close relationship with our dominant telco, Telstra, who I’m sure would get very worried if Microsoft was to buy Skype.

Which leaves Yahoo! Again, I reckon its a good fit for many of the same reasons as I described with Microsoft and there’s no obvious conflict there. Indeed, it would be a good non-advertising revenue stream which Yahoo! could really do with to make it less susceptible to the ups and downs of the advertising market. There was a lot of talk about a Yahoo! and Skype merger prior to them ending up with eBay. But that was when Yahoo! was a lot stronger than it is today and Yahoo! has quite sensibly tried to get back to concentrating on its core business. Mind you, you might argue that Yahoo!IM is a key element of its core business. I somehow doubt Wall Street would appreciate the play and there is more news of Yahoo! cutbacks over at the New York Times.

Whatever the case, its clear that there are significant road blocks stopping Google, Yahoo! or Microsoft from making a play for Skype.

Which doesn’t leave a lot of buyers, does it? Outside of these three its hard to see where there are any obvious synergies and you’d think anyone else acquiring the company would just lead to the eBay situation all over again. The WSJ expressed some scepticism that Skype would make it to IPO and that this was just a cover for eBay to push up the price. But when you look at it, eBay just doesn’t have that many options.

Personally, I don’t think Skype will make it as a stand-alone in the same way that ICQ never made it despite being the dominant IM client at one time. In the end, the marketing might of those same companies that are shunning it right now will probably overwhelm it. Skype has competitors coming at it from all angles as well, with telcos and VoIP companies all battling for this same market share. These dangers are pretty obvious and I really can’t see the market coughing up the multi-million dollar valuations that have been splashed around in the past 24 hours.

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