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Rumor: Cisco May Be Looking To Buy Skype

by Sean P. Aune | August 30, 2010August 30, 2010 8:00 am PDT

If rumors are to be believed, network equipment manufacturer Cisco is sniffing around the popular Skype VoIP (Voice over Internet Protocol) service for a possible acquisition. While this is certainly possible, it seems a bit odd seeing as the company just fought to free itself from several years under the heel of online auction company eBay. Would a company that just worked so hard for its freedom really be willing to give it up again so quickly to another large company?

cisco skypeAs we reported to you earlier this month, Skype has filed the paperwork for an IPO (Initial Public Offering) of its stock.  While this is still in the process of being approved by the governing bodies of the stock market, it seems that Cisco has come courting.  According to a rumor reported by TechCrunch, which admits it comes from an unknown, yet proven source, Skype is aiming for a $5 billion dollar valuation prior to its stock launch, and it is quite possible this is the number Cisco is discussing with them.

Skype was purchased by eBay back in 2005, much to the puzzlement of just about everyone,  After launching a bid to take the company back, the original founders of the company just got it back from the auction power house earlier this year.  In the end eBay got to hold on to 30 percent of the company, but the remaining 70 percent went to the original founders along with some venture capital companies they brought in to help with financing.  This is why it seems a bit odd to us that Skype would even be entertaining this deal.

Apparently Cisco would like to complete the deal before the IPO goes to market, and that almost seems like a step back for the company.  They worked for a long time to be able to buy the company back, and on the eve of their accomplishing what every Internet startup dreams of, they would just throw themselves back in with a large corporation?  It doesn’t make any sense to us.

Of course, this is only rumor at this point, and no matter how reliable TechCrunch may think their source is, there is no guarantee that their information was as reliable when it was passed to them.  Until we see some solid information on this we’re going to take it with a generous helping of salt.

What say you?  Is Cisco really aiming to buy Skype?  And if so, why would the company be agreeing to it this close to achieving their dream of going public?


Sean P. Aune

Sean P. Aune has been a professional technology blogger since July 2007, but his love of tech dates back to at least 1976 when his parents bought...

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