Cisco May Be Interested in Skype

Just when things were settling down for Skype and the newly-independent company was on its way towards an initial public offering, comes the rumor that Cisco may be interested in buying the VoIP company before the IPO goes through.

Cisco has made an offer to buy Skype, according to TechCrunch, though this comes from only one source and details are very scarce.

If the rumor is true, though, it would make for a very interesting deal for both companies.

Skype was spun-off from parent company eBay late last year as the service didn't really fit with the auctions site's other interests. The lawsuit with Skype's former owners didn't help either.

eBay had big plans for Skype when it acquired the company in 2005 for $2.6 billion. But it failed to integrate the voice services into its auctions site.

In 2009, eBay started considering an IPO for Skype as a way for the company to become more independent. The IPO plans were halted by a lawsuit from Skype's founders who still owned part of the core technology that powers the VoIP service.

The two founders eventually got their way and received stakes in a spun-off Skype. A number of investors also bought a majority stake in the company, with eBay still owning about a third of Skype.

The most recent plans were again for an IPO which would value Skype at about $5 billion. Despite the huge valuation, Skype only hoped to raise about $100 million in the IPO, according to the filing.

If Cisco is really interested, it must be offering at least that much to raise any interest. While Cisco made its name and fortune in the networking hardware business, it has been aggressively expanding into other areas and services is one of them.

With Skype, it would be able to offer a complete communications solution for enterprises and it's a path more and more companies, especially hardware companies, are adopting in a bid to stay relevant.