Cisco Planning To Acquire Skype

rexjoec writes "Cisco is making a bid for Skype. The deal, if successful, would derail a planned initial public offering from Skype and redraw the battle lines in the lucrative market of video communications." The rumored price is $5B.

Comments

iPhone by Cisco?

[omglolbah]

I'd love to see them release a new iPhone just for the hell of it :p

Re:iPhone by Cisco?

[Luckyo]

Skype already had a working implementation on the world's biggest mobile plarform, as symbian application called fring allowed you to essentially tunnel into your skype account and make phone to pc, pc to phone and phone to phone video calls on any symbian mobile phone with front facing camera (which is pretty much any decent nokia made in the last 4 years).

At some point, folks at skype decided that they didn't want to be a source for free video calls over 3g and blocked fring. But to actually need to make a phone when all you need is to allow integration into already existing phones for money... why?
Video calls already worked for mobile phones over skype for a while (and apparently work again over fring itself as it added the functionality recently, but fring still seems to lack PC endpoint application). They could probably set up a small charge for every time you video call a phone with data connection, though I suspect that they have to hurry before one of the small start ups like fring grabs enough of the market and becomes skype of the mobile world.

Re:iPhone by Cisco?

[mlts]

How about a Skype application that does end to end encryption from the VoIP server to the cellphone? This would definitely be the killer app. This way, management can talk plans to a sales guy making a deal in Latveria without the Elbonians listening in.

Re:iPhone by Cisco?

[camperslo]

I'd love to see them release a new iPhone just for the hell of it :p

A Linksys router with a VoIP phone jack, built-in camera, and monitor out might be a possibility.

Re:iPhone by Cisco?

[Anonymous Coward]

At some point, folks at skype decided that they didn't want to be a source for free video calls over 3g and blocked fring.

I think this had more to do with the fact that Fring was a 3rd party, and so they felt threatened by third party clients connecting to their network.

I've only used it once and only for voice, but I'm pretty sure my Nokia N900 can make Skype calls over 3G. In box, without any third party add-ons. It can also do video calls over Google Chat.

Re:iPhone by Cisco?

[rrossman2]

how about the carriers blocks the access, and not skype per say. Most carriers block ANY type of VoIP/SIP client period

Re:iPhone by Cisco?

[Anonymous Coward]

Sorry to go off topic, but if you want a bit of change, check out the video of this girl playing piano on youtube:

http://www.youtube.com/watch?v=mFUldIMmcwg

George

Re:iPhone by Cisco?

[Cyberax]

Skype is notoriously difficult to block. It uses all kinds of evasion tactics (culminating in HTTPS tunneling).

Re:iPhone by Cisco?

[robot256]

You mean you can talk to extremists on the other side of the world without the government listening in...nope, not happening.

Re:iPhone by Cisco?

[crossmr]

I've got the CIT400 iPhone which I use all the time. It's fantastic. I bought a couple a few years ago and gave one to my parents. Living overseas with an unlimited calling plan on skype is great, but having this phone is even better. Especially since it's DECT, which means no standard interference from 2.4Ghz things.

Cisco really should have pushed their skype phone lines more. They're great, and decent quality. They're now impossible to find. So I really hope it doesn't die anytime soon on me.

Re:iPhone by Cisco?

[justthinkit]

I think that set an off-topic record.

Re:iPhone by Cisco?

[badkarmadayaccount]

If it's a WRT54GL inheritor, I'm so buying one!

Not sure how I feel

[Windows Breaker G4]

I am not sure how I feel about this, we could see sweet void phones from cisco, on the other hand they could really killy Skype. Oh well I guess we have google voice now right?

Re:Not sure how I feel

[jgagnon]

At least it wasn't Oracle... :p

Re:Not sure how I feel

[Locke2005]

we could see sweet void phones from cisco Maybe a few VoIP phones from Cisco too!

Re:Not sure how I feel

[Windows Breaker G4]

Well if it was at least we'd know what would happen to them :P

Re:Not sure how I feel

[Locke2005]

By the way, I have a VoIP phone from Cisco sitting on my desk right now: CISCO IP PHONE 7941 SERIES.

Re:Not sure how I feel

[alphax45]

I have the same one

Re:Not sure how I feel

[davester666]

Is the company you work for that cheap that you have to share a desk and phone?

Or are you at home?

Re:Not sure how I feel

[erroneus]

I know how I feel about it. It is beyond time for some enterprising individuals to team up to create an open video chat specification complete with the ability to conference in multiple people at once like this oovoo thing. (No Linux client! Bastards!) People could then put up their own servers and install clients on all OSes, not just the ones companies want to support and then Skype is less relevant.

All I see at the moment is that in spite of the existence of F/OSS projects that do exactly what I suggest, none of them are in wide enough use to be considered a peer with Skype and definitely Cisco. That, more or less, needs to change. Once Cisco gets Skype, there will be radical change and people will want to move on to something else.

Re:Not sure how I feel

[bobdotorg]

At least it wasn't Oracle... :p

... or eBay.

Re:Not sure how I feel

[JeffSpudrinski]

Wow...all two of you posting in the same thread?

What are the odds?

-JJS

Re:Not sure how I feel

[Captain Splendid]

100% of Cisco VOIP phone users are Slashdot readers! Amazing!

Re:Not sure how I feel

[tangelogee]

I have the 7921 wireless, as well as the 7940 :)

Re:Not sure how I feel

[Anonymous Coward]

uh...yes

Re:Not sure how I feel

[peteinok]

7945 FTW!

Re:Not sure how I feel

[MikeFM]

Maybe Skype will actually stop sucking if Cisco buys them.

Re:Not sure how I feel

[Anonymous Coward]

you are kidding right?

cisco haven't made any decent kit in years, especially bad are their ios-rewritten-in-java-and-slapped-on-a-linux-box products.

here's me hoping google voice moves outside of just the usa pretty quickly, otherwise its back to ekiga.

Re:Not sure how I feel

[marycc]

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Re:Not sure how I feel

[(Score.5, Interestin]

Maybe Skype will actually stop sucking if Cisco buys them.

Nope, you'll just get Cisco's mega-suckage added to the existing Skype suckage.

Actually, this whole mess is my fault. Some years ago I bought a nice Linksys router/AP. Shortly afterwards, Cisco adsorbed Linksys, and turned its suckage-ray of doom on them.

Last week, I bought a Skype phone. Looks like history is about to repeat itself.

Re:Not sure how I feel

[Anonymous Coward]

At least it wasn't Oracle... :p

What makes you think Cisco will be better? $1500.00 for a stick of memory? Yea they'll make a phone that will cost more them you house and still SUCK!

Cisco Planning to Squash Another Competitor

[wshs]

They do this with pretty much every company they buy. Psionic and Riverhead come to mind quickly for me. The only reason they kept the Linksys brand was because they had no competing product at the time.

Re:Cisco Planning to Squash Another Competitor

[bsDaemon]

I recently bought an E1000 802.11n wifi ap/router, which is ostensibly a Linksys product, but unlike other Linksys products I've used in the past, this one has the Cisco logo on it in a fairly conspicuous manner, and linksys.com now redirects you to home.cisco.com. I don't know if that's an indicator that they might be planning on phasing out the Linksys brand or not though. Probably not. I think the best parallel I can come up with would be the 'Squire' brand of musical instruments, which is produced by Fender but are basically cheap pieces of crap that they don't want to sully their main-line brand name with.

Re:Cisco Planning to Squash Another Competitor

[Moridin42]

I wish this was my area of expertise.. I'd make something just so they'd come buy it from me. And then I'd make a new one.

Re:Cisco Planning to Squash Another Competitor

[Kepesk]

Buying up companies at a frantic pace seems to be the hot trend among powerful corporations.

Soon there will only be two corporations: Microsoft-Cisco-Skype-NBC-Pepsi-McDonnalds-Halliburton-Friskies Corp and Apple-AOL-Time-Warner-CBS-CocaCola-BurgerKing-BP-FancyFeast Corp.

Then you'll start getting weird messages on your computer... "You better not buy Fancy Feast." "We saw you drink that Pepsi."

Re:Cisco Planning to Squash Another Competitor

[Idiomatick]

:( your future includes AOL. I can't subscribe to your beliefs.

Re:Cisco Planning to Squash Another Competitor

[mlts]

The reason companies do the buying is that R&D is so heavily penalized in the US, due to tax breaks, liability, and other things. If a small company puts out a product, it is better to wait to see if they face lawsuits, then buy them if nothing happens as opposed to creating a product for a new market.

Plus, American companies are shackled to the fact that they have to make a profit quarter per quarter, or shareholders can sue the company in the ground. Buying a company is a lot easier to explain to the accountants and board members as opposed to charging off some chunk of change for a R&D facility for new products that won't have an ROI for 5-10 years.

Re:Cisco Planning to Squash Another Competitor

[Mongoose Disciple]

I thought only Taco Bell would survive the restaurant wars...

Re:Cisco Planning to Squash Another Competitor

[TooMuchToDo]

The problem is cash sitting around doing nothing. NPR was running a story yesterday talking about how the top 120 companies have over $1 trillion of cash sitting around, and investors are demanding they either distribute it to them via dividends or invest it via mergers and acquisitions. So, yeah, if it's either earning 0.5 percent in a money market account or buying up a ton of relatively cheap companies with the potential for a much larger return, you go on a spending spree and buy up whatever you think is going to have a decent ROI.

Re:Cisco Planning to Squash Another Competitor

[Anonymous Coward]

I seem to remember a short story a few years ago that talked about a Corporation of Ultimate Evil that ended up owning the planet: MicroDiz

(Robotic and genetically engineered fuzzy animals, an inane tune playing at all times in the background - something about a "small world".)

Wish I could remember where I found the story. Chilling, but funny!

Re:Cisco Planning to Squash Another Competitor

[DMiax]

With Google where? It seems an important omission...

Besides, good point, I did not think of it as a trend, but it looks reasonable. If I can do a bit of armchair economics analysis I suspect they could be scared of Chinese competition that is emerging?

I am not speaking of outsourcing because these are the guys that practice outsourcing. Does anyone here know what powers chinese networks? If it is a single company with unpronounceable name that is unknown to people in this side of the world I think Cisco is rightly scared.

The same could be true for other companies if they discovered that there is a chinese homologous they may be trying to grow big before their would-be competitor wakes up.

Re:Cisco Planning to Squash Another Competitor

[Anonymous Coward]

American companies are shackled to the fact that they have to make a profit quarter per quarter

They don't, it's just that the market has convinced itself that they must. What a horribly farcical state of affairs.

Re:Cisco Planning to Squash Another Competitor

[TheCycoONE]

You've been watching too much demolition man.

Re:Cisco Planning to Squash Another Competitor

[GameboyRMH]

Hahaha you should read Jennifer Government by Max Barry...

Re:Cisco Planning to Squash Another Competitor

[Anonymous Coward]

ROI? How about space tourism? $20B goes a long way towards getting people there and would only be 2% of that $1Tn.

Re:Cisco Planning to Squash Another Competitor

[tokul]

The only reason they kept the Linksys brand

Not sure what they kept, but their marketing department definitely destroyed blue Linksys boxes and replaced them with something Cisco-branded. In next generation routers features were removed.

Re:Cisco Planning to Squash Another Competitor

[Kepesk]

Actually, another part of the reason (and I've seen this first-hand in the monster corporation I work for) is that they want to buy up little companies with good ideas before their competitors do. Sometimes all they do is buy it up and shut it down; they don't want to use the company's assets, they just want to prevent competitors from using those assets.

Re:Cisco Planning to Squash Another Competitor

[Anonymous Coward]

Soon there will only be two corporations:

Nope. Look up the words antitrust regulations. And ./ jerks, spare your remarks about MS monopoly -- Microsoft didn't create their monopoly by acquiring companies but by slow build up using their own resources (even though they may have STARTED with some acquisitions).

Re:Cisco Planning to Squash Another Competitor

[h4rr4r]

Or here in reality; Mergers and Acquisitions mean big deal closing payouts to C level execs and paying dividends to investors don't.

Re:Cisco Planning to Squash Another Competitor

[TooMuchToDo]

All depends on the C level folks. Some are downright fucking morons (I'm looking at you Mark Hurd. Who screws with their expense account records when you make an 8 figure salary?). Some (like Warren Buffet) have a knack for picking out value and growing it in an ethical manner. As always, YMMV.

Re:Cisco Planning to Squash Another Competitor

[Gordo_1]

Your nightmare already exists. it's called Proctor and Gamble: http://www.pg.com/en_US/brands/index.shtml/

Re:Cisco Planning to Squash Another Competitor

[fast turtle]

thanks for reminding me about a TNG Borg/MS story that I read a while back. Seems that the Borg hadn't paid their MS Tax and were using Pirated Copies. The MS Lawyers disassembled them in a hurry.

Re:Cisco Planning to Squash Another Competitor

[tjb]

Plus, American companies are shackled to the fact that they have to make a profit quarter per quarter, or shareholders can sue the company in the ground.

When has that ever happened? Real citations, from places other than your ass, please.

Re:Cisco Planning to Squash Another Competitor

[afidel]

Meh, warchests are fine if you eventually do something with them, think what would have happened if Apple had liquidated and distributed it's ~$3B in cash (more than the market cap at the time) instead of investing in OSX and the ipod.

Re:Cisco Planning to Squash Another Competitor

[Archangel Michael]

Google Voice (aka Grand Central),
Google Chat, now with phone dialing (PC to PC, PC to Phone VOIP)
Gizmo5 (Acquired last year)Voip Telephony Company
Adroid Phone

Google has ALL the pieces needed to make a serious run at SKYPE, which is why SKYPE is running to Wall Street now looking for IPO or White Knight, IMHO. SKYPE ought to be scared, because they don't have the bulk and push Google does.

And Google doesn't have to sit on Gizmo5 much longer, if they are working towards integration of the four. The pieces are almost there for the first and complete VOIP end to end network, with Cell as backup.

THAT is just how I see it.

Re:Cisco Planning to Squash Another Competitor

[Jahf]

Cisco's current plan for the Linksys brand is to keep it on the "Expert" routers but put the Cisco brand on the more consumer-focused "Valet" line. Both share hardware, the main difference is packaging. This sort of kills your Squire argument, as Cisco already has the Cisco brand on the exact same hardware. It is a product marketing decision. Technogeeks like us know the Linksys line. Everyone else is much more familiar with the Cisco brand.

Disclaimer: I work for Cisco Consumer Products.

Re:Cisco Planning to Squash Another Competitor

[pclminion]

Plus, American companies are shackled to the fact that they have to make a profit quarter per quarter, or shareholders can sue the company in the ground.

And I have to make monthly mortgage payments or the bank will take my house away. See me complaining?

If you don't want to be shackled by shareholders, don't trade your shares publicly. As a public company you are subject to the investing acumen and superstitions of the general public -- you're basically taking a loan from thousands of "John Smiths." And of course these people just want to see profitability in the short term.

If I came in here bitching about losing my house because I couldn't keep my creditors happy, you'd tell me to grow up, and if I didn't want to be subject to their whims, maybe I should finance my home myself. But when the same thing happens to a corporation you pity the poor little corporation. Weird.

Re:Cisco Planning to Squash Another Competitor

[gtall]

It depends upon how many cockroaches are running the company. Beyond the Cockroach Horizon, the company cannot be killed....think Microsoft, Bank O' America, Citibank, etc.

Re:Cisco Planning to Squash Another Competitor

[gtall]

A whole trillion, eh? So if the U.S. government took it all this year, they'd still be $400 Billion in the hole...and $1.4 Trillion next year. Me thinks that's not an enormous amount of money in the relative scheme of things.

Re:Cisco Planning to Squash Another Competitor

[Capt.DrumkenBum]

There is a simple way to turn it into an enormous amount of money.
Just give it all to me. That way they are giving an enormous amount of money to one person. :)

Re:Cisco Planning to Squash Another Competitor

[kamochan]

The same applies also in Europe, even if for slightly different reasons (labor costs and liabilities). R&D is expensive for big corps, and growth is expensive for small corps.

This leads to most start-ups having a business strategy of doing R&D with a skeleton crew, then getting bought by big corp X. Where X is often known from the moment the start-up is launched. Any business done before the exit stage is purely to prove the validity of the developed solution. A tech start-up without an exit strategy in the 21st century = doomed to fail.

This of course will lead to the MegaCorp world the GP envisioned. It's unavoidable.

Re:Cisco Planning to Squash Another Competitor

[bsDaemon]

That just really seems completely backwards to me. Would not the "everyone else" who has never been in a DC cage be familiar with Linksys since that's what's been on the shelves at CompUSA and Best Buy all this time? I mean, Cisco is a big-name player in networking and technology, but you can't really accidentally buy their products.

Re:Cisco Planning to Squash Another Competitor

[Galestar]

This is also the plan of most venture capitalists. VCs are not looking to watch a company grow long-term. They are looking to buy into a company at the startup, and sell it for several times the original price in just one or two years.

Re:Cisco Planning to Squash Another Competitor

[complete loony]

And with a Batphone you can use a local adhoc wifi mesh network for peer-to-peer call routing. Eliminating the need to a telco controlled cell network as well.

Re:Cisco Planning to Squash Another Competitor

[beanpoppa]

Some companies that Cisco acquired off the top of my head: 1. Crescendo - became Cisco's Catalyst line which they continued to develop and sell for 15+ years 2. Altiga - Became the basis for Cisco's VPN concentrators 3. Airespace - Cisco's dropped their existing SWAN products in favor of the Airespace product line 4. WebEx - Not exactly squashed 5. Selsius - Became Cisco's VoIP product. 6. Linksys - Not squashed

Re:Cisco Planning to Squash Another Competitor

[tehcyder]

With Squire, you get a Fender lookalike guitar with the Fender brand association for 100 GBP instead of 400+ GBP. You get what you pay for, they're fine for beginners/amateurs.

Re:Cisco Planning to Squash Another Competitor

[Anonymous Coward]

I recently bought an E1000 802.11n wifi ap/router, which is ostensibly a Linksys product, but unlike other Linksys products I've used in the past, this one has the Cisco logo on it in a fairly conspicuous manner, and linksys.com now redirects you to home.cisco.com. I don't know if that's an indicator that they might be planning on phasing out the Linksys brand or not though. Probably not. I think the best parallel I can come up with would be the 'Squire' brand of musical instruments, which is produced by Fender but are basically cheap pieces of crap that they don't want to sully their main-line brand name with.

Actually, Cisco is phasing out the Linksys brand.

Did Google see this coming...

[onionman]

Certainly seems like Google saw this coming from a long way off given that they have been working hard to integrate Skype-like features into gmail.

It makes me wonder how many Cisco/Skype executives were using gmail accounts...

Re:Did Google see this coming...

[Anonymous Coward]

http://www.google.com/gizmo5/

Re:Did Google see this coming...

[BrokenHalo]

Given that I'm not that keen on participating in Google's data-mining projects, I am underwhelmed by Google Voice offerings. Skype (despite its various failings) offers a comprehensive voice (and video if you want it) or chat connection that is independent of your browser, and thus is to an extent more or less insulated from your other online habits. Skype can be swallowed up by pretty much anyone other than Google (so long as those services remain intact) and I'll be content.

Re:Did Google see this coming...

[peteinok]

D'oh! or daaaayyyyyyyummmmmmmm your choice.

Probably a good fit

[i_want_you_to_throw_]

Anyone wanna revisit why eBay bought 'em in the first place? Did ya just wanna say WTF? Cisco is probably a good fit though. I just hope my home service still works as needed. I bought a GE router with the Skype software in it, bought a SkypeIn number and haven't paid Verizon a bill in 2 years.

Re:Probably a good fit

[whisper_jeff]

Anyone wanna revisit why eBay bought 'em in the first place?

eBay bought Skype for $2.6 billion and is now rumored to be on the verge of selling it for $5 billion.

I would imagine the reason eBay bought Skype is something along the lines of "to make $2.4 billion dollars profit" though I could be mistaken.

Re:Probably a good fit

[pesho]

Here is the eBay reasoning:

1. Buy Skype

2. ???

3. Profit!

Re:Probably a good fit

[Anonymous Coward]

Anyone wanna revisit why eBay bought 'em in the first place?

eBay bought Skype for $2.6 billion and is now rumored to be on the verge of selling it for $5 billion.

I would imagine the reason eBay bought Skype is something along the lines of "to make $2.4 billion dollars profit" though I could be mistaken.

Wonder if it will be an ebay auction :D

Re:Probably a good fit

[Wumpus]

Somebody is going to make around $3 billion on this, but it isn't going to be eBay, who sold Skype last year for $2 billion, which was less than what they paid for the company when they bought it.

Re:Probably a good fit

[Abcd1234]

Uhhh, acquiring a billion dollar company isn't like buying and selling stocks. Organizations like eBay don't drop that kind of dough just to buy low and sell high. Those kinds of acquisitions are done because they're either strategic (lock up related markets, deprive competitors, etc), or because it adds value to existing business.

eBay buying Skype seemingly fit neither of those molds (unlike, say, the Oracle purchase of Sun), and so its absolutely valid to question why they made the original purchase.

Did it turn out well for them, monetarily? Sure. But it was still a strange acquisition, rendered stranger by their decision to now sell it off.

Re:Probably a good fit

[Anonymous Coward]

Ebay sold skype last year to Silverlake Group for $1.9b http://www.bloomberg.com/apps/news?pid=newsarchive&sid=agy971cWGyZc
Interestingly, Silverlake is ALSO the majority owner of Avaya, and Nortel Enterprise, two of Cisco's largest competitors in voice and data.

Ebay will not profit from this in any way, they have already lost.

Re:Probably a good fit

[DrgnDancer]

Except it turns out that "2" was "sell it to someone else for nearly twice as much".

Re:Probably a good fit

[tyrione]

Somebody is going to make around $3 billion on this, but it isn't going to be eBay, who sold Skype last year for $2 billion, which was less than what they paid for the company when they bought it.

eBay didn't sell Skype outright. They will be making a profit in this transaction.

Re:Probably a good fit

[Sulphur]

Is that their buy it now price?

Re:Probably a good fit

[afidel]

eBay sold skype in 2009 for $1.9B, a $125M note, and a 35% stake in the new company.

Re:Probably a good fit

[Anonymous Coward]

Don't worry, the mastermind behind that deal will be bringing back fiscal responsibility to the great state of California :)

Re:Probably a good fit

[Wumpus]

OK, you're right - they still hold about 30% of Skype. They sold 65% at a loss, although figuring how much they lost is giving me a headache. Skype has been profitable while it was owned by eBay, making the math even more headache inducing. And eBay never paid the full purchase price of $4 billion, either.

At this point, I'm glad I'm not an accountant.

Re:Probably a good fit

[jonbryce]

They could have just as easily lost $2.6bn, or even more than that given that Skype is a loss making company.

My view is, if ebay shareholders want to make money out of viop companies, they can do so by buying shares in them. For ebay to justify buying them, they need to show why they can make more money out of it than skype on their own could. They said it was because they could integrate the skype service into their auctions so bidders could talk to the people selling the stuff. That didn't really happen, and anyway, they could provide the facilities for people to put their skype id on the auction listings without them needing to own the company.

I can better understand what Cisco could do with Skype that might not be so easy otherwise. Cisco sell VOIP phones and other networking kit, which currently isn't designed to work with Skype, and Skype is the most popular VOIP service, so Cisco could do things like have a Skype line coming into the company switchboard so that consumers who generally use Skype can communicate with corporations who generally use SIP lines.

Re:Probably a good fit

[mattack2]

They sold 70% for $2.025 billion (http://www.ebayinc.com/content/press_release/20091119006361), and had bought 100% for $2.5 billion (http://investor.ebay.com/ReleaseDetail.cfm?ReleaseID=176402). That seems to be a profit to me, on the 70%. How is it a loss?

Re:Probably a good fit

[Wumpus]

I believe they also paid some of the performance-based earn-out, which if paid in full ($1.4 billion) would have made it a loss. They would have had to pay less than $300 million or so to make the recent transaction a profit, ignoring Skype's profits. I don't know how much they actually paid, but I know it wasn't the full amount.

I welcome this.

[jellomizer]

Skype is rather Nasty to deal with if you have problems. If it is urgent there is no Voice support, And the email links to ask for a problem are vague and will lead you to the wrong path, and with horible auto replies that will just make you mad.

While with Cisco sure you will be on hold for 3 hours but at least you can talk to someone and get it resolved.

Re:I welcome this.

[oogoliegoogolie]

If it is urgent there is no Voice support,
If it's urgent then use your telephone! Or Windows Messenger. Or how about email?

I rather enjoy Skype the way it is right now. Cisco is going to destroy Skype intentionally or accidentally by doing one of two things:
1) Add Skype's technology into their products, stick a "Powered by Skype" sticker on the box, and kill off any consumer-level access Skype as we enjoy it now. Looking back at Cisco's purchases in the last decade and you'll see this is very likely.
2) As an attempt to make Skype profitable, they'll quadruple the prices and charge for the ones that are currently free. Coming soon:unused Skype credits that expire in 30 days.

Re:I welcome this.

[Ironhandx]

Really? I'm hoping they add built in Skype functionality to their routers. Cordless phones with the router as the base. Shit they could even bundle it. The market potential is HUGE.

Re:I welcome this.

[serbanp]

I can only hope that once they're acquired by Cisco their CS will improve (it's not hard to do, given the abysmal level they're at right now). Maybe then I could use them again for SkypeOut services, knowing that if I have issues (such as fraudulent charges on my account), there is someone I can talk to instead of replying to useless mail-based "CS"

OTOH, google voice is comparable in quality and slightly cheaper...

Re:I welcome this.

[wshs]

With Cisco, you'll be on hold for 3 hours, until you read off your product serial number. Then they tell you you've reached EOL for the product in question, and offer to sell you an identical product whose only difference is the product number, at a vastly increased price. However, they won't tell you what the price is until you sign an NDA, because the gouge each customer differently.

Re:I welcome this.

[Ephemeriis]

While with Cisco sure you will be on hold for 3 hours but at least you can talk to someone and get it resolved.

Depends on the level of support you need...

If you've got a SmartNet contract with them, and your network is down, they get back to you fast.

Re:I welcome this.

[ophix]

Obviously your company's experiences differ quite a bit from ours. Our experiences with Cisco's support for IOS bugs has left a rather bad taste in our mouths for any Cisco branded hardware. So bad that we switched all of our core routers over to another vendor and haven't looked back.

Re:I welcome this.

[adolf]

Really? I'm hoping they add built in Skype functionality to their routers. Cordless phones with the router as the base. Shit they could even bundle it. The market potential is HUGE.

And this is better than an 802.11 wireless Skype handset and random router... how, exactly?

Re:I welcome this.

[Ironhandx]

Its not necessarily any /better/ but it can be made easier to use. Put in skype uname/pwd in router setup wizard and never have to touch anything else, plug in the phone, push in the wireless network password and presto, done. Makes the skype phones cheaper since most everything could be handled router side and you can easily bundle it with 3 or 4 handsets like a lot of cordless phone sets come bundled now.

Plus people are familiar with routers. Someone that might be a bit scared of wasting money on a skype phone might not be as afraid of something that more or less functions exactly as the phone set they already have.

The reasons for the market potential are many and varied but they are there, you just have to think about it for a minute and realize that most of the market is outside of the slashdot readership.

However I for one would buy a bundled, easy to configure setup that costs a lot less than skype phones do nowadays.

Re:I welcome this.

[hesaigo999ca]

Cordless phones with the routers, is like handheld palm devices with skype on them, free....as long as you can do it on your ISPs network without being blocked, rumor has it, when any cell phone within my network tries using skype from a handheld, they block it, and it does not work, but you still have internet, go figure....
wonder if this will apply to those routers that have this too?

Re:I welcome this.

[adolf]

I really think that it'd not that big of a deal.

I say this having never configured an existing Skype handset, but, honestly -- really. Folks these days who are accustomed to handling 802.11-ish stuff are also accustomed to handling passkeys and entering them into random devices.

The only other bit of info needed is a Skype username and password.

Does it really make a marketable difference if this stuff is entered in a web browser or on a handset?

And do folks who are already familiar with Wifi really want to buy a new router with their handset just because it is, at best, a few minutes easier than just buying the handset separately?

And does Cisco owning Skype somehow make this any easier for them to implement than it has been for their own Linksys brand?

Re:I welcome this.

[Ironhandx]

You have no idea how many people that use 802.11 stuff never actually configured it themselves do you? I know at least 5 people off the top of my head that can't/won't configure their routers even with the wizard on the cd.

The whole point of this is that you can streamline it. They can buy skype service right from that wizard and use the cordless phone that came with the router right away. Skype has a good user base yes, but I'm banking on the fact that a lot more people would use it a lot more for telephony service if it was all streamlined.

In response to the Cisco thing, they were looking at doing this awhile ago but couldn't get a deal wherein they had access to the Skype source code to do a custom implementation which was a deal breaker for them. Since they bought Skype thats really not an issue anymore.

Good for eBay!

[brunes69]

eBay buys Skype for 2.6 billion, loses a ton of money on it over a span of 5 years, now offload sit to Cisco at a profit. Genius!

Re:Good for eBay!

[Anonymous Coward]

except that, if you read TFA:
eBay (EBAY - Analyst Report) sold Skype to a group of private investors, led by Silver Lake Partners, for about $1.9 billion

Re:Good for eBay!

[NetNed]

Yeah?

Skype has eluded profitability in four of the last five years and cash-rich e-Bay, which still retains a considerable stake in the firm

Again from TFA......

They dont own them now?

[nurb432]

I really thought they did and was waiting for the 'free' to go poof totally.

Privacy Concerns?

[Froggels]

Will this now give the US government unfettered access to encrypted Skype data? Does anything like Carnivore come into play here?

Re:Privacy Concerns?

[wshs]

This is where CALEA comes into play.

Lucrative? Really?

[Swarley]

"the lucrative market of video communications" This seems wrong to me, but I guess I don't actually know. Skype's profits are actually pretty small, Face time is considered a fun gimmick rather than a major selling point for iPhone4. Aside from major commercial installations, like for web based university classes, I don't really see anybody who is interested in paying actual money for video communications over what they pay for voice communications. Who's actually paying to make this market so lucrative?

This just in...

[countSudoku()]

Reports are surfacing that Oracle and Cisco attempted to purchase each other this morning and were destroyed in the clash. A very perturbed Larry Ellison had this to say; "When I saw they tried to purchase US I fell over into my zen rock garden and bumped my head pretty bad on a large decorative boulder." A spokeswoman for Cisco remarked; "They got database software all up in my router!" to which Larry replied; "Well, you got router all over my new Sun hardware biz!" Film at 11... AM, then lunch.

Re:This just in...

[Archangel Michael]

Plot sounds eerily like the end of Secret of My Success.

Cisco denies it?

[HockeyPuck]

Odd that all the articles cite TechCrunch as the source of the rumor yet this guy from Barrons, says it's untrue.

Re:Cisco denies it?

[dave562]

It is very true.

Re:Lucrative? Really?

[Anonymous Coward]

"the lucrative market of video communications" This seems wrong to me, but I guess I don't actually know. Skype's profits are actually pretty small, Face time is considered a fun gimmick rather than a major selling point for iPhone4. Aside from major commercial installations, like for web based university classes, I don't really see anybody who is interested in paying actual money for video communications over what they pay for voice communications. Who's actually paying to make this market so lucrative?

Gotta think outside the box, Cisco probably doesn't need this from a Skype makes money perspective they want to buy this to grow the video calling. I was at a presentation with Cisco's Chief Futurist (freaking awesome title) and he talked about the Flip acquisition, the reason they bought them was to be almost a lost leader. People buy cheap HD video camera and then end up sending and transferring more HD movies and clips, ISP need more bandwidth and end up buying more Cisco routers/switches/etc which is where they really make money.

very smart move cisco!

[M. Kristopeit]

putting a standard phone jack on the back of their home routers, and building skype in would greatly increase their value to most people.

Consider This.....

[Atomm]

Cisco has a huge install base for business VoIP. Most of those businesses connect to land lines via traditional T-1 circuits. If Cisco integrated the Skype infrastructure with all those business customers, they could route calls over the Skype network bypassing the Telco's. From what I have seen, the average business long distance rate is 2-3 cents a minute. Cisco could charge 1 cent a minute and still make a fortune because they have such a large base of customers.

Now, what if they did the same for International calling?

I think it's going to move Skype away from Consumers and into the Business world where the real money is.

Re:Consider This.....

[RobinEggs]

I think it's going to move Skype away from Consumers and into the Business world where the real money is.

Not necessarily. Cisco certainly does more business with the corporate world, but look at Linksys: WRT-54 routers have been the Cadillac of home and small enterprise wifi for a decade, and Linksys is nothing more or less than the consumer brand-name for Cisco.

If they treat Skype the way they treat Linksys, there's no reason to assume they'll do anything deleterious to private user's experience.

Re:Consider This.....

[Atomm]

Linksys extended to business cannibalizes existing business and costs Cisco money. Skype extended to business generates a huge amount of cash flow that didn't exist previously and they can keep the consumer business as is.

Re:Consider This.....

[Anonymous Coward]

It's called SS7. Cisco can route calls outside PSTN anyway, eg. via SIP. And yes, "regular folk" can buy a SIP phone, connect it to a SIP provider and pay cheap-as-borsch calls. 0.5 cents per minute (15 cents/h) for US/Canada are here *now*. 1c/min to most of Europe, etc..

There are providers that don't charge monthly fees. You can get phone numbers in different places routed to you. etc. etc... The old phone is dead and the new phone is not Skype - these companies are way behind the curveball anyway.. They just have name recognition.

Anyway, Skype is a shit company to acquire. If anyone does it, it's mostly for userbase not the application.

Re:Consider This.....

[peteinok]

You mean become a SIP trunking provider? That would push them into de-facto telco status.

Re:Lucrative? Really?

[Anonymous Coward]

Businesses. If you can add video to every desktop, businesses will love it and pay you millions. Drive network traffic through the roof and you've got to buy a whole bunch of new Cisco gear :)

The death of Skype

[Scareduck]

Cisco's hardware business will kill Skype, mainly because overpriced, state-run foreign telecom companies will demand it as a condition of buying Cisco hardware, just as they've successfully weaseled in spying kits into all their routers.

Oh great...

[geminidomino]

If it competes with their enterprise-level megabuck gear, I guess we can expect usability, features, and especially reliability, to spiral down the crapper.

They did it to Linksys, after all.

Are we sure?

[RebootKid]

There are other articles like this: http://localtechwire.com/business/local_tech_wire/news/blogpost/8228715/ floating around
Basically they say that Cisco is really looking at Smart Grid stuff, not Skype.

Anyone got a contact at any of the companies in question to actually confirm/deny/etc?

Re:Are we sure?

[Anonymous Coward]

Anyone got a contact at any of the companies in question to actually confirm/deny/etc?

It is very legit. Posting anonymously for obvious reasons.

Maybe not

[Mike Van Pelt]

This is a rumor from TechCrunch. Maybe there's something to it, maybe not. All the other news items reporting this seem to be quoting the one TechCrunch source. Another news item said "A Source Close to Cisco" said there was nothing to the rumor.

http://blogs.barrons.com/techtraderdaily/2010/08/31/cisco-has-not-had-talks-about-acquiring-skype-source-says/

Re:Maybe not

[JSBiff]

Didn't TechCrunch put out another widely repeated rumor a month or two ago that turned out to be completely false? Seems like it was something else Slashdot reported (based on the TechCrunch source), but it was bogus. But, now I can't remember what it was. Racking my brain, but drawing a blank.

Re:Maybe not

[JSBiff]

Man, I just did a Google search for 'techcrunch rumor false', and got a lot of hits on different rumors. TechCrunch appears to be the high-tech industry equivalent of a supermarket tabloid?

Makes that tablet a little more interesting...

[metrometro]

Remember that head-scratcher about Cisco going after the iPad with a "business tablet"?

And then remember the ask-Slashdot about how to do a Skype-dedicated device, and the answer was they all kind of blow?

Perhaps that $200 Cisco 7900 phone on your desk might get a little more sexy.

http://tech.slashdot.org/index2.pl?fhfilter=cisco+tablet

Obvious business fit

[monoi]

Skype leeches a little bit of bandwidth from a lot of organisations, which causes them all to need slightly more/bigger routers than they would otherwise.

Cisco sells routers.

What's the betting that the Skype protocol will get a bit less efficient each year from now on?

Re:Obvious business fit

[metrometro]

By this logic, Cisco also plans to buy The Internet.

Re:Obvious business fit

[Anonymous Coward]

Skype leeches a little bit of bandwidth from a lot of organisations, which causes them all to need slightly more/bigger routers than they would otherwise.

Cisco sells routers.

What's the betting that the Skype protocol will get a bit less efficient each year from now on?

Skype is not really big enough to be that evil. Besides, with HD cameras shipping with more and more devices they can get the bandwidth usage up enormously just by promoting HD calls.

too late, gmail calling

[farble1670]

google semi-silently released their gmail call feature last week. *free* IP calling from your desktop to the US / canada. browser-based, simple, and just works. no mobile client, but hey, skype took it in rear w/ respect to android by only releasing a client for verizon, and then at an added cost.

Re:too late, gmail calling

[demonbug]

google semi-silently released their gmail call feature last week. *free* IP calling from your desktop to the US / canada. browser-based, simple, and just works.

Free for 2010 anyway, according to the notice I got when I was checking my email. The fact that they specifically said "Free for 2010" strongly suggests that come 2011, it won't be.

Re:too late, gmail calling

[rrossman2]

and it only works for international calls....

Re:too late, gmail calling

[farble1670]

and it only works for international calls

no, it works for domestic and international calls. it's only free to US and canada though.

Still looking for p2p Video Conferencing

[CranberryKing]

We are still in the hosted communications world and I haven't found an application as easy to use as Skype that is p2p.

I want secure p2p video conferencing that I can control and know there is no middle man involved. Cisco might sell it to me for thousands of dollars. I like free better. I looked at Qnext yesterday, which wasn't bad..

Any ideas?

Anonymous Coward

[Anonymous Coward]

heard last on slashdot.

RETURN On Investment

[sjbe]

ROI? How about space tourism? $20B goes a long way towards getting people there and would only be 2% of that $1Tn.

Are you aware that ROI stands for RETURN On Investment? $20B might get some neat technology but it's no guarantee that whatever is developed will RETURN a profit. Space tourism is an industry with huge fixed costs, unknown demand, and finicky technology. Add in the risk of a significant drop in business when the first tourist dies in an accident (which will happen sooner or later) and the return on that $20B better be pretty high to justify the risk.

So, does this mean that Robert Murdoch...

[forkfail]

... is now lin litigation with Cisco? After all, he claims to be the one to "own the sky in Skype..."

Price seems too high

[sjbe]

eBay bought Skype for $2.6 billion...

And took a writeoff on the investment of $1.4 billion making their investment worth considerably less.

To be honest I think $2.6 billion would be too high a price even now. Skype reported net income of $13.2 million on about $400 million in revenue. It's growing but $5B would be a very high price. A typical "fair" price is between 1-2X revenue to use the simplest possible analysis. (5-7X EBITDA is also used but profits aren't high enough here to make that useful). M&A folks typically use some multiple to arrive at a ballpark price. $5B would be hard to justify even with skype growing as fast as it apparently is.

I think Cisco is probably the right fit for Skype. (eBay never made a damn bit of sense) Cisco has been pushing to get into the VOIP market. They'll have to be careful however because they'll be competing with some of their biggest customers, namely the telecom companies (AT&T, Verizon, etc).

Sweet, Will I be able to use Skype on my iPhone?

[goldarg]

I've really been enjoying my Yahoo! Messenger but hey now maybe I could have Skype too? Wow!

And here people have been saying I should have held out for the Apple model over my Linksys one.

IPO = "I'm Privately Owned"

[PinchDuck]

Ok, Skype, kiss & make up with Fring so I can make video calls on my Evo again. Or release your own client for the same purpose. Get with the program, guys.

Yay! Now Skype can switch to an open protocol

[MCRocker]

Wahoo! Now Skype can be moved off of their proprietary protocol on to an open standards compliant... oh, wait you said Cicso... never mind.

Likely won't happen

[Anonymous Coward]

Skype is the power player of the consumer VoI* world (Voice over Internet, not Voice over IP). They are a market along with Cisco and others. Any anti-competition judgment will clearly identify this and quash the merger.

Are you sure?

[Anonymous Coward]

This seems to indicate it's all smoke and mirrors for now

http://blogs.barrons.com/techtraderdaily/2010/08/31/cisco-has-not-had-talks-about-acquiring-skype-source-says/?mod=yahoobarrons

I don't like it, it smells bad

[BlueCoder]

Cisco already sells telecom equipment... now it's going to become a telecom company? Sorry I vote no. Better to have a separate company and spin a ten year or more deal to be a major producer of corporate equipment.

But thinking again about it I have to wonder maybe... but only if they do keep it a separate entity... they have enough money and clout to grow the company to later sell it off later for a profit... a successful Skype would mean a greater demand for tcp/ip telecom equipment... problem would be they would face antitrust problems if no one else were able to produce Skype specific/compatible equipment.

The signs of economic recovery are all around... companies are buying low and planning to sell high...

i really loathe these mergers.

[unity100]

rich shareholders and their ceo lackeys deciding and initiating takeovers, mergers etc. they dont even worry about customers and what they think.

what if i ditch skype after this takeover ? what if millions do the same ?

5B$ with a "B"?

[DarthVain]

lucrative market of video communications

Has Skype ever made any actual real money? What is with the valuation?

Now that Apple has thrown in as competition you pick now to take over this company.

Enjoy Crack Much?

Re:5B$ with a "B"?

[DarthVain]

Oh yes and Google, how could I forget Google.

So yeah. Overpay, for a company that doesn't make any money that competes now directly with both Apple and Google.

Let me know how that turns out for you.