UPDATED 18:47 EDT / APRIL 14 2009

Cisco should buy Skype before the IPO

image The blogosphere is a buzz the past couple of hours regarding the news that eBay will finally cut the cord with Skype in the form of a planned IPO in 2010.  This is a very smart move on eBay’s part and you can see why the rumors of the original founders drumming up some private equity to purchase it.  They continue their move towards a more focused eBay after announcing yesterday they will be setting StumbleUpon free.  The move should also garner much interest from suitors who have been eyeing Skype over the past couple years with periodic banter on a potential split off from parent eBay.

So now let the speculation begin on either when and how much will Skype IPO for, OR, who and for how much will someone by the company before then?  My  is on the latter.

image With its roughly $30 billion in stockpiled cash, I like Cisco as pretty good candidate.  They are pushing hard into the consumer/home market with their own products and the purchase of Flip Video as well as into the data center with the acquisition of CDN company Tidal last week.

With its massive reach of 400 million+ users worldwide and around $550 million in revenue for 2008 it seems like a nice fit for Cisco’s consumer push.  They could be responsible for delivering both the service/hardware of the most widely used voice infrastructure, especially if Skype on WiFi enabled handsets continues to increase.

There is also some historical connections between the two companies.  Former strategy chief Mike Volpi at Cisco joined Skype’s board back in ’04, also Cisco has a history of making Skype related devices in the past (remember the Cisco/Applie iPhone suit).


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