Skype Files for Flotation in a Bid to Capitalise on its Success

What is the difference between Skyrock, SKYY, and Skype? The answer is that only one of them represents a serious threat to the creator of Sky Television, Rupert Murdoch, and is a sure source of brand confusion. Apparently. Furthermore, it just so happens that the company in question has recently filed for flotation on the US stock market with hopes of raising some $100 million.

As someone who is well aware of the benefits of Skype, and the growing implementation and usage of the resource within a business and home environment, the level of coverage it receives seems unfair. While Facebook and Google invariably dominate the technology headlines on a day-to day basis, the achievements of Skype have been overlooked until the company's recent offering on the US stock market.

The rising usage of the technology on commercial and retail websites demonstrates Skype's trusted reputation on a global scale. It seems that before long, the ability to “Skype” companies online will be standard procedure worldwide.

The continued success of internet telephone company has seen its registered member numbers reach approximately 560 million. Despite its relatively low-key media presence, it is statistically more popular than Facebook, whose over-exposure and self-obsession renders it the hyper-active, attention seeking cousin to the discreet, reserved, yet resourceful uncle Skype.

Since its foundation in 2003 by Swedish entrepreneur Niklas Zennstrom and Janus Friis from Denmark, users have clocked up 250 billion minutes of airtime. With its cost-effective infrastructure and remarkably simple set-up, Skype are able to offer free calls for Skype members, with a small charge incurred for calling landlines or mobile phones. The latter however, may form an integral part of their future expansion, with the ambition to embed their service within television and mobile devices.

With 738,000,000 results from a Google search for “skype”, and almost 71 million backlinks according to Yahoo Site Explorer, the popularity of the VoIP (Voice over Internet Protocol) device is plain to see. So successful has the brand become, that the term “to skype” has entered into our collective lexicon. It is a universally known and accepted brand, holding a position of authority within the cultural psyche as well as in search engine rankings.

Skype's success is further confirmed by the pursuit of the rights to the company brand by Rupert Murdoch, media mogul. Murdoch is currently embroiled in legal proceedings with the internet communications firm (and has been for the last five years), claiming that his BSkyB company own the “Sky” segment of the Skype name, while also suggesting the potential for confusion between the two brands in their current states.

Whether it does or does not create such confusion is not the key factor here. It appears to be a ruse for the legal paralysis of the new found success of the under-represented Skype innovation. Furthermore, there have been allegations of plagiarism emanating from the BSkyB camp in terms of the similarity of the Skype logo to that of Sky Television (a similarity which is tedious at best, at worst non-existent).

The use of a blue and white colour scheme and cloud-like stylisation is entirely appropriate to the brand-name, and the services it provides. Rupert Murdoch cannot dictate the use of meteorological characteristics.

The Initial Public Offering of Skype will likely involve the sale of American Depositary Shares by various holders. Currently, the company is 56% owned by a consortium of Silver Lake, a Canadian pension fund, and $300 million venture fund Andreesson Horowitz, with eBay retaining a 30% share of its prior purchase of the internet telecoms provider in 2005. The original founders of Skype account for the remaining 14% via their Joltid firm.

The IPO will allow Skype to access investment for its future expansion programmes, and will provide much needed capital at a time when the company reported a loss of $417.5 million in 2009, largely due to legal costs incurred during a dispute over technology ownership. In the filing, Skype cited an uncertain financial future as a force behind their flotation ambitions.