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Yipe! Cisco might buy Skype? :-(

Oh, I’m sorry. Did I let my feelings show in the title? :-)

CNET cites a TechCrunch report that:

“Cisco has made an offer to acquire Skype before they complete their IPO process, says one of our more reliable sources. We have not been able to confirm this rumor one way or another via other sources, which isn’t surprising. A company in lock down during the IPO process is usually even more tight lipped than normal.”

Skype hopes for a valuation of around $5 billion in its IPO, according to TechCrunch, so Cisco would have to offer at least this price to make the offer attractive. Although Cisco typically makes smaller purchases, it spent, for example, $6.5 billion on the cable set-top box maker Scientific Atlanta in 2005. Skype has 560 million registered users, with 124 million active users who use it every month.

Cisco would likely want to incorporate Skype’s voice over IP (VoIP) and video technology into its existing products, such as its Unified Communications suite of products or its collaboration service from WebEX (Cisco bought WebEX for $3.2 billion in 2007). Yes, I cried at the WebEX acquisition, too. :-) But it looks as though they may be doing OK….

(Note added September 3, 2010: Of course, the rumor that Cisco might buy Skype is ANOTHER reason why being able to make phone calls through Google’s Gmail is a “good thing.”)

I often rode my motorcycle along Tasman Drive through “CiscoLand” when I worked at Sun Micro’s Santa Clara campus (at the site of the former Agnews Developmental Center, a psychiatric and medical care facility now located in San Jose).

I have seen firsthand what happens to small, brilliantly creative companies when they are acquired by larger companies. It’s usually not pretty.

Sometimes, I even feel sorry for the staff of stodgy, mind-numbingly regimented companies that get acquired. After all, it’s not the fault of the staff….

-Bill at

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