Entrepreneurs Success Story: SKYPE and the Billion $ Pay Day
December 11, 2014
Skype has today become a staple of how we live, work and play. We use it to keep in touch with friends and family, it integrates into our social networks and, in the main, it doesn’t cost anything to use!
For entrepreneurs it is a great tool to connect with business partners and clients across the globe – especially if you still run on the smell of an oily rag.
As SKYPE turned ten, new owners Microsoft decided to look back. Jennifer Warnick took a look at the first decade of SKYPE and boy has it been a journey. Around every large successful entrepreneurial endeavour lies a supply chain of small companies and start-ups that are activated as a result of the success of the larger player.
Just like Microsoft, Google and Apple have been successful think about the hundreds of thousands of smaller and larger companies that have produced everything from hardware and infrastructure to accessories and software. Each of these entities in their own right has become large successful businesses.
In Omar’s own words: “When the iPhone came out, to me, that was the phone we were waiting for”
Just as Omar and many others started off in business so did SKYPE – an idea of how they could revolutionise the way we live, work and play.
After the formal founding of the company in 2003 by two entrepreneurs, Swedish-born Niklas Zennström and Janus Friis from Denmark, Skype witnessed astonishing growth. In three years, Skype had 115 million customers, making it the fastest growing internet community at that time.
The new technology opened up an extremely cost-effective business model with almost complete elimination of expensive infrastructure investments, Credit Suisse wrote in a note.We are launching Skype as the telecoms company of the future, said founder Zennström at the launch.
Co-founder Friis put it this way: We hope that one day, instead of saying 'I'll call you', people will say 'I'll skype you'.In 2005, Skype was taken over by the American online auction house eBay for $2.6 billion but eBay sold 70 percent of the stake to Silver Lake Partners.Skype had announced its plan to go public in August 2010, but it was delayed after a management change at the top level.
On 10 May 2011, Microsoft Corporation acquired Skype Communications, S.à r.l for US$8.5 billion. The company was incorporated as a division of Microsoft, and Microsoft acquired all of the company's technologies with the purchase.
This was completed on 13 October 2011Microsoft phased out its long-standing Windows Live Messenger instant messaging service in favour of Skype, although Messenger continues in mainland China.
Microsoft began this transition on 8 April 2013, and completed the move by 30 April.And well the rest is now history.But of course, this is not the only start-up Zennstrom and Friss had been involved in – remember Kazaa?
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