Now that eBay has set a tentative timetable for spinning off Skype, the question becomes whether the Internet phone company can become a legitimate force as a voice service provider.
Some analysts say that Skype has been somewhat stifled while it has been a part of eBay because its business model hasn't gelled well with eBay's online auction business. Indeed, eBay CEO John Donahoe acknowledged as much last week when he said that Skype was "a great stand-alone business" but that it had "limited synergies" with eBay.
But despite these limitations, Skype has still been remarkably successful over the past few years, as the company's number of registered users worldwide has grown by nearly eight-fold since being purchased by eBay in 2008. Additionally, the its revenues are projected to nearly double over the next two years, reaching an estimated US$1 billion in 2011.
Gartner analyst Elroy Jopling says that once Skype is officially spun off next year, it will be free to concentrate exclusively on its voice business and to expand its services more toward the mobile area. The company has started moving in this direction this year and unveiled applications for iPhones and BlackBerry devices that are aimed at giving smartphone users alternatives to making voice calls over traditional cellular networks. Moving forward, Jopling thinks that how well Skype penetrates the mobile market will be the "biggest factor" in its potential success.
Irwin Lazar, an analyst at Nemertes Research, also thinks that Skype's success in the mobile voice market will determine its future and says that its addition to the smartphone market is the first step in making the company a household name. More significantly, he thinks that if Skype catches on with more popular consumer devices it could eventually put pressure on cellular carriers to change how they do business.
Although Skype iPhone applications only run over Wi-Fi, Lazar thinks that Skype will likely start running more over carriers' data networks once they start building more 4G networks based on technologies as Long Term Evolution and WiMAX.
"Skype's iPhone client was really the first shot across the bow of cellular carriers," he says. "As they build out higher speed data networks it becomes easier to do voice over data services."
This could spell trouble for carriers, Lazar explains, because they will inevitably lose revenue if users simply subscribe to flat-rate data plans and then use Skype exclusively for their voice services. Should Skype succeed in becoming a widely used VoIP technology that rides on top of carriers' data networks, Lazar thinks they have a few options to preserve their revenue streams: they can block Skype outright on their data services, they can implement their own metered data plans that charge per bit consumed or they can offer their own flat-rate VoIP service that is priced competitively with Skype's service.