Skype outlines plans for US$100 million IPO

Internet VoIP call provider Skype will seek to raise US$100 million through an initial public offering (IPO) in the US, as it looks to diversify and boost its user base and revenue.

In a filing with the US Securities and Exchange Commission this week, Skype said it plans to use the money it raises from the IPO for “general business purposes” as it pursues a strategy to grow both its base of free users and paid subscribers, increase its marketing and advertising revenue and expand its services for businesses.

Most of Skype’s revenue currently come from fees its charges for its SkypeOut service, which allows users to make calls outside of the Skype domain to regular phone lines and mobile devices.

In the first half of 2010, Skype increased its net revenue 25 per cent to US$406.1 million from US$324.8 million in the same period in 2009. However, net income dropped to US$13.1 million from US$22.5 million.

Skype, founded in 2003, was acquired by eBay in 2005 for US$2.6 billion. Last November eBay sold 70 per cent of the company for US$1.9 billion in cash and a note from the buyers in the principal amount of US$125 million.

An investor consortium led by Silver Lake and including Andreessen Horowitz and the Canada Pension Plan Investment Board bought a 56 per cent stake, while Skype co-founders Janus Friis and Niklas Zennstrom acquired 14 per cent. The deal put Skype’s value at US$2.75 billion.

As of June 30, Skype had a monthly average of 124 million free users and 8.1 million paying users, up from 91 million free users and 6.6 million paying users respectively in the second quarter of 2009. Total registered users grew from 397 million in 2009’s second quarter to 560 million in 2010’s second quarter.