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Should Cisco acquire Skype?
This is as a big a news item as you're going to hear - what a way to start the week? Is $5 billion a fair price? Will Avaya counter-offer? What will Google do? So many angles - let's go...
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2 Answers
This should prove very interesting, Jon.
On the surface, this is one of the more rational acquisition rumors in the multi-billion dollar range that we've had all year. There are many ways that Cisco could use Skype and Skype-based technology in their Unified Communications offerings.
Hard to say if $5B is appropriate one way or another, but the trick for Cisco is to offer enough to forestall another buyer coming into the picture, or the Skype folks just waiting for the IPO -- but they don't want to overpay.
Still, given the much better synergy available to them than many other potential suitors, they can afford to spend a little more than some other vendors might.
Let's see what Google does. :)
-ASB: http://Xeesm.com/AndrewBaker
Normally I would discount a rumor like this, but it looks like VentureBeat is now saying the offer is real from one of their sources.
On the market side, there's one big reason Cisco should not buy Skype: over 60% of Cisco's revenues come from carriers. The strategy and corporate development teams at Cisco are some of the best in the business, so if they are considering a Skype acquisition it signals that Cisco thinks the traditional telecom business is dying. That will make for some interesting conversations between John Chambers and the carrier CEOs.
So this seems like a long shot. Then again, I bet Scott McNealy wishes he had bought RedHat back in 2000.
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