9 ms·

Cisco May Be Making A Run For Skype

31 points by mjfern 16y ago

terryjsmith 16y ago
Okay, so here's the new plan for startups: develop your product and execute it to near its full potential, then sell it to someone for $2B. But keep the core technology (just tell them it isn't important and/or you're just licensing it from this other corporation you just happen to own). Continue to collect licensing fees on said core tech. Then, when that person can't put enough time/effort/etc. into it, buy it back from them at 20% of the original price (after they've taken a huge write down of course). Next, raise a ron of VC money cause you're the shit, and then plan to IPO a very small portion of the company. Finally, while you're in the process of doing your IPO, get bought AGAIN, except for $5B this time. /rant
- bvi 16y ago
  This would make for an interesting movie script.
- dcurtis 16y ago
  This is almost exactly what actually happened with WebShots (only with smaller amounts of cash). http://en.wikipedia.org/wiki/Webshots http://en.wikipedia.org/wiki/Webshots
- rwmj 16y ago
  After doing a bit of contracting for Skype and eBay quite a few years ago, the problem was that eBay's management are a bunch of clueless goons. That they would get taken for a ride like this is no surprise to me at all.
riffic 16y ago
Cisco owns Jabber, inc. Maybe they'll turn Skype into an xmpp-based service, allow federation with other service providers, and lose the proprietary protocols. or maybe not.
- rwmj 16y ago
  What possible benefit would this be to Cisco or Skype or even to Skype's current users?
  - riffic 16y ago
    Federation would allow interoperability with other services. A user on Skype could communicate with users on other networks, such as Google Talk/Voice. Basically, freedom from being locked into a single service provider.
    - rwmj 16y ago
      You're saying that Skype should take a year or two off, rewrite all their software, and come back, safe in the knowledge they'll now be able to interoperate with a bunch of broken VoIP services that have no users. I can't see the killer business plan yet, sorry.
      - riffic 16y ago
        I think they should be bought and shut down, simply for non-compliance with any written standard. Buildings that don't meet building codes get shut down and condemned.
        rwmj 16y ago
        So you want government intervention to ensure user-hostile technology is forced on the marketplace.
        riffic 16y ago
        okay now this is heading into ridiculous territory. standards-based is user-hostile? If you truly believe this, the IETF and IEEE would like a word with you.
  - mdasen 16y ago
mahmud 16y ago
The article should mention Webex, instead of leaving that for the fluff in the bottom. http://en.wikipedia.org/wiki/WebEx http://en.wikipedia.org/wiki/WebEx CISCO might want Skype just for the brand and userbase, since it already has a VOIP platform, far richer than Skype's (except maybe for the P2P stuff)
- signa11 16y ago
  > CISCO might want Skype just for the brand and userbase, since it already has a VOIP platform hmm, with at&t as well as verizon legally allowing skype on their networks, i think it is much more than that. also, with 4g (sic) lte networks ims voice seems to be a long way away... edit: at least one (high profile) cisco exec has moved into skype too.
- rwmj 16y ago
  WebEx is the most horrible user-hostile piece of software out there, so hopefully they'll kill it in favour of Skype.
  - nailer 16y ago
    One a remote desktop control tool, the other's a phone call app.
    - nuclear_eclipse 16y ago
      WebEx Connect is still a frustrating piece of "Enterprise" software that I wish I wasn't forced to use on a daily basis.
Osiris 16y ago
This acquisition certainly makes a hell of a lot more sense than the lame eBay purchase. Seriously, how did anyone convince the board at eBay that purchasing Skype would be a good thing? At least Cisco is in the telecommunications business and could roll the Skype brand and tech into real products.
- huhtenberg 16y ago
  I was in the same state of WTF until I asked about it a friend of mine, who was the CEO of one of larger Boston startups. It took him a couple of minutes to crunch the numbers in his MBA head and to show that eBay's purchase price was reasonable. Apparently it was a viable business transaction when it was conducted (excluding the not-purchasing-the-core-technology part).
  - arethuza 16y ago
    Of course another possible explanation for this is that MBAs are all taught to value things the same (crazy) way and he is simply running the same valuation calculation as the MBAs at eBay and coming up with an equally crazy answer.

31 points by mjfern 16y ago

Okay, so here's the new plan for startups: develop your product and execute it to near its full potential, then sell it to someone for $2B. But keep the core technology (just tell them it isn't important and/or you're just licensing it from this other corporation you just happen to own). Continue to collect licensing fees on said core tech. Then, when that person can't put enough time/effort/etc. into it, buy it back from them at 20% of the original price (after they've taken a huge write down of course). Next, raise a ron of VC money cause you're the shit, and then plan to IPO a very small portion of the company. Finally, while you're in the process of doing your IPO, get bought AGAIN, except for $5B this time. /rant

bvi 16y ago
This would make for an interesting movie script.
dcurtis 16y ago
This is almost exactly what actually happened with WebShots (only with smaller amounts of cash). http://en.wikipedia.org/wiki/Webshots http://en.wikipedia.org/wiki/Webshots
rwmj 16y ago
After doing a bit of contracting for Skype and eBay quite a few years ago, the problem was that eBay's management are a bunch of clueless goons. That they would get taken for a ride like this is no surprise to me at all.

riffic 16y ago

Cisco owns Jabber, inc. Maybe they'll turn Skype into an xmpp-based service, allow federation with other service providers, and lose the proprietary protocols. or maybe not.

rwmj 16y ago
What possible benefit would this be to Cisco or Skype or even to Skype's current users?
- riffic 16y ago
  Federation would allow interoperability with other services. A user on Skype could communicate with users on other networks, such as Google Talk/Voice. Basically, freedom from being locked into a single service provider.
  - rwmj 16y ago
    You're saying that Skype should take a year or two off, rewrite all their software, and come back, safe in the knowledge they'll now be able to interoperate with a bunch of broken VoIP services that have no users. I can't see the killer business plan yet, sorry.
    - riffic 16y ago
      I think they should be bought and shut down, simply for non-compliance with any written standard. Buildings that don't meet building codes get shut down and condemned.
      - rwmj 16y ago
        So you want government intervention to ensure user-hostile technology is forced on the marketplace.
        riffic 16y ago
        okay now this is heading into ridiculous territory. standards-based is user-hostile? If you truly believe this, the IETF and IEEE would like a word with you.
- mdasen 16y ago

mahmud 16y ago

The article should mention Webex, instead of leaving that for the fluff in the bottom. http://en.wikipedia.org/wiki/WebEx http://en.wikipedia.org/wiki/WebEx CISCO might want Skype just for the brand and userbase, since it already has a VOIP platform, far richer than Skype's (except maybe for the P2P stuff)

signa11 16y ago
> CISCO might want Skype just for the brand and userbase, since it already has a VOIP platform hmm, with at&t as well as verizon legally allowing skype on their networks, i think it is much more than that. also, with 4g (sic) lte networks ims voice seems to be a long way away... edit: at least one (high profile) cisco exec has moved into skype too.
rwmj 16y ago
WebEx is the most horrible user-hostile piece of software out there, so hopefully they'll kill it in favour of Skype.
- nailer 16y ago
  One a remote desktop control tool, the other's a phone call app.
  - nuclear_eclipse 16y ago
    WebEx Connect is still a frustrating piece of "Enterprise" software that I wish I wasn't forced to use on a daily basis.

Osiris 16y ago

This acquisition certainly makes a hell of a lot more sense than the lame eBay purchase. Seriously, how did anyone convince the board at eBay that purchasing Skype would be a good thing? At least Cisco is in the telecommunications business and could roll the Skype brand and tech into real products.

huhtenberg 16y ago
I was in the same state of WTF until I asked about it a friend of mine, who was the CEO of one of larger Boston startups. It took him a couple of minutes to crunch the numbers in his MBA head and to show that eBay's purchase price was reasonable. Apparently it was a viable business transaction when it was conducted (excluding the not-purchasing-the-core-technology part).
- arethuza 16y ago
  Of course another possible explanation for this is that MBAs are all taught to value things the same (crazy) way and he is simply running the same valuation calculation as the MBAs at eBay and coming up with an equally crazy answer.