Still, when Whitman approached Zennstrom, Skype's CEO, about buying his company, their face-to-face talks had to take place outside the U.S. They started Skype using similar technology but without the piracy problems. Its founders, Niklas Zennstrom and Janus Friis, had previously started the music file-sharing service Kazaa, which famously drew the ire (and lawsuits) of the U.S. Its engineers were in Estonia, operations were in London, and its legal headquarters were in the tax haven of Luxembourg. Skype began its corporate life as a renegade. Meanwhile, this fall Donahoe has spent more than $1 billion on acquisitions and has announced layoffs of 1,600 workers.

eBay's new CEO, John Donahoe, who replaced Whitman in March 2008, has publicly suggested he'll sell Skype if he can.

The surprising thing is how well Skype is progressing even as eBay is evaluating whether to get rid of it. Josh Silverman, Skype's current president - the company's fourth since the eBay purchase - defines his mission grandly: 'Building out communication software that works anywhere on any device.' That's a huge improvement over the $7 million in total revenue it recorded in 2004, the year before eBay's purchase.

Skype is even profitable - it's earning about $100 million in 'direct contributions' (corporate jargon for cash flow) on $600 million or so in annualized revenue. Despite its tumultuous three years as a ward of the faltering eBay ( EBAY, Fortune 500), Skype continues to grow at a far faster rate than, which is being socked by competition and a slowing economy. On the other, Skype can't shake its rap as Meg Whitman's folly, the company that in 2005 snookered the former eBay chief executive into paying what ultimately became $3.1 billion for promised 'synergies' that never materialized, triggering a write-down of $1.4 billion only two years later.īoth takes on Skype are true. On one hand, Skype is a startup with more than 300 million users, many of whom actually pay for the phone calls they place across the globe using a computer and Skype's free software. (Fortune magazine) - In its mere five years of existence the word 'Skype' has taken on an unusual dual meaning in the Internet world - known equally as a stunningly successful example of consumer adoption and a dealmaking flop of multibillion-dollar proportions.

Skype international calls libya