Skype Looks for a Spot in Offices and Cellphones

By VERNE G. KOPYTOFF

SAN FRANCISCO — Skype has become one of the Internet’s most popular services — so much so that it is even used as a verb to describe a phone call over the Internet, as in “Skype me.”

The seven-year-old company, however, is still a work in progress on the financial front. It was sold to eBay, then taken private and now aims to complete the round trip with an initial public offering.

Under its new chief executive, Tony Bates, Skype is seeking new ways to make money from its 124 million users, most of whom do not pay a cent. In particular, Mr. Bates is looking at possible new markets like corporate phone systems and mobile devices, both highly competitive.

Skype, based in Luxembourg, recorded $406 million in revenue in the first six months of the year, up 25 percent from the period a year earlier, according to the company’s recent filing with the Securities and Exchange Commission. Net income was down 42 percent, to $13 million.

The increased revenue is coming from users making more paid calls. But that success is modest given Skype’s widespread adoption by consumers. Only 6.5 percent of Skype’s users pay to make calls from their computers to landline and mobile phones. The vast majority call only fellow Skype users, which is free.

Those free users have some value, said Charles Golvin, an analyst for Forrester Research. But converting them to paying customers has proved difficult, which, he said, will weigh on any public offering.

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