Skype nabs Cisco exec for CEO slot

By Julianne Pepitone and David Goldman, staff writers


NEW YORK (CNNMoney.com) -- Internet phone service Skype has tapped Tony Bates as its new chief executive, the company announced Monday.

Bates was formerly a top executive at networking giant Cisco, where he managed the company's enterprise and service provider groups.

Bates holds nine patents and is "an expert on Internet technologies," Skype said in its announcement. Bates has served on the boards of several video and voice technology companies including YouTube, TokBox, BubbleMotion and LoveFilm.

Skype filed for a $100 million initial public offering in August. In that filing, Skype said it had generated more than $406 million in sales so far in 2010, from a customer pool that includes 560 million registered users -- up 41% from a year earlier.

But only 8 million of the 124 million customers who use Skype each month are paying customers.

Early last month, rumors swirled that Cisco (CSCO, Fortune 500) was looking to buy Skype. The blog TechCrunch, quoting a source it deemed reliable, reported that Cisco had submitted a bid to acquire Skype before the IPO was complete.

Cisco's not the only big tech company taking an interest in Skype. Google (GOOG, Fortune 500) was also rumored to be considering a bid, but antitrust concerns may have dissuaded the search giant from making an offer.

Skype's history has been a rocky one. EBay (EBAY, Fortune 500) bought the company for $2.6 billion in 2005. EBay planned to use Skype as a communication service between auction buyers and sellers, but that didn't work out as planned, and eBay sold Skype last year for for $2.75 billion to an investment group led by private equity firm Silver Lake Partners.

Skype has made headway recently in its bid for a bigger footprint in the communications market. Most notably, it landed a deal with Verizon Wireless (VZ, Fortune 500), letting Verizon customers use Skype -- instead of more-expensive Verizon minutes -- for some of their mobile voice calls. To top of page

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