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Skype Ready To Make IPO Call

Signaling a new chapter for Skype, the Internet telephony company just filed for an IPO worth $100 million. "The offering was widely viewed as in the cards, though I admit it came sooner than I thought," said GigaOm's Om Malik. Nonetheless, he said, the decision "is a result of the company turning into a cash machine."

Indeed, the company currently has 560 million registered users -- about 8.1 million of whom are monthly paying users who, on average, pay $96 a year for the service. As a result, for the first six months of the year, Skype reported revenue of $406 million, and net income of $13.2 million.

Still, "Skype's IPO has revealed some interesting nuggets about the voice network provider's intentions and fears as it looks to make an initial public offering of its shares," writes The Register. "Chief among them are its decision to ditch MySpace and expressions of concern about Google and Apple."

"We believe that users that have registered through MySpace are infrequent users of Skype products," the company said in an S-1 filing with the S.E.C. "We have notified MySpace that we do not intend to renew our contract arrangement with MySpace, through which users can register through MySpace, when it expires on November 27."

Skype also admits it needs to differentiate its product offers to lessen investor risk. "[W]e have historically derived a substantial portion of our net revenues from a single product-SkypeOut," the company said. "Due to this dependence on SkypeOut as our primary source of net revenues, we are subject to an elevated risk of reduced demand for our SkypeOut product."

The Wall Street Journal's Venture Capital Dispatch blog has a rundown of all the numbers, including the nearly 40% of surveyed users who said they use the platform occasionally or often for business-related purposes. "That's an area where Skype hopes to expand in a big way," the blog notes.

As CNet notes, Skype was thought to be gearing up for an IPO late last year "when online auction giant eBay, which had acquired Skype in 2006, sold off its controlling interest" in the company.

"From what I can tell, Skype has a complicated financial profile, due no doubt to its life inside eBay," remarks Federated Media founder and blogger John Battelle. "But once again, this is a company that, when you clear out the accounting gymnastics, looks to have a pretty interesting profit potential. And it clearly has scale."

Read the whole story at GigaOm et al. »

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