Cisco Exec To Head Skype

Continuing its pre-IPO makeover, Skype said today it has appointed Cisco executive Tony Bates as CEO. Bates will replace outgoing CEO Josh Silverman at the end of this month, the company said in a statement.

Luxembourg-based Skype, the worlds largest VoIP provider, now accounts for 12 percent of all international voice traffic, according to research outfit TeleGeography Research. A year ago Skype was sold by eBay, which acquired it in 2005, to a group of private investors that includes Silicon Valley investment firm Silver Lake Partners. The company filed in August for a public offering, but has not announced the date of the IPO.

Bates, 43, was a rising star at Cisco, often mentioned as a possible successor to CEO John Chambers. He headed the networking giants enterprise, commercial and small business division in effect leading Ciscos voice initiatives while overseeing 12,500 employees and business worth $20 billion annually.

Silverman, a long-time eBay executive, led Skype through a period of explosive growth the company now has about 560 million registered users but never figured out how to successfully integrate Skypes voice service with eBays core online auction business, or how to generate more revenue from the free VoIP service. This year Skype said it earned $13 million on revenue of $406 million through June.

In an effort to drive more enterprise business, Skype has announced a series of partnerships including one last week with enterprise telecom vendor Avaya. In preparation for the IPO, Skype has now added several new executives including general counsel and chief of marketing. Late last year Jonathan Rosenberg, another Cisco exec, was named CTO at Skype.

Before the Silver Lake sale, Cisco was mentioned as a potential acquirer of Skype. Now, Bates will be faced with taking the company public in a dicey stock market while building new, revenue-generating services at Skype.

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