Skype CEO On Qik Deal

Skype announced a $100 million acquisition of the company Qik, which developed smart streaming technology to opitimize video transmission over wireless networks. Skype CEO Tony Bates discusses what this partnership means for Skype's future.

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MELISSA BLOCK, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

And it's time now for All Tech Considered.

(Soundbite of music)

BLOCK: Take a deep breath. Those four words are the first thing you see when you launch the desktop application for Skype, the company that helped pioneer a marriage between the telephone and the Internet. Skype was founded in 2003 as an alternative to expensive phone plans. With the program you can use your Internet connection to make voice calls, video calls, as well send instant messages.

Today Skype has about 560 million registered users and most of them don't pay a dime for their service. Well, joining us from London to talk about his company is Skype's CEO Tony Bates. Welcome to the program.

Mr. TONY BATES (CEO, Skype): Thank you, Melissa, it's great to be here.

BLOCK: What about that message, take a deep breath, what does that mean?

Mr. BATES: I think that's a great metaphor for Skype, actually, because what Skype really tries to stand for and what we've been doing, as you mentioned, from the advent of when we were really just focused on audio and taking it to video is really create something that we think is both universal, but also wonderful in terms of experiences that we enable.

BLOCK: So, take a deep breath meaning this is going to take your breath away or where is that metaphor heading?

Mr. BATES: Yeah. I think if you think about what Skype has done, and you mentioned some great numbers, but just to give you a couple of other data points, we on average per month have about - in the last three months we were hitting 145 million connected users who use the service in one way or another. And about 40 percent of those now are doing that with video. You don't have to imagine anymore what's possible.

We hear these great use cases, you know, the Army ranger who's serving in Afghanistan who's watching the birth of their daughter back in the U.S. Folks who are watching real time what's - maybe in Tulsa, watching what's happening, you know, in current events just like we've seen over the last few days in Tunisia. So people are using it for both magical sort of wonderful moments, but more importantly, also useful moments.

BLOCK: Let's talk a bit about the company that Skype recently acquired for $100 million and that's Qik. It lets users stream video from their smartphones. How does acquiring Qik help Skype? Is that a new model?

Mr. BATES: Well, I would says two parts about that. Firstly, as I mentioned, we think the next great sort of place to go is really sharing these magical moments that we talked about in a mobile context. And Qik does two things for us. One, it allows us to reach a broad set of mobile devices. Qik is actually available in over 200 different mobile phones running across all of the major operating systems, Android, iOS, Symbian and so on.

But, also, Qik is also about capturing these moments that I talked about earlier. And so you can now capture the video, provide a link to a live feed up to say, 20 people, as well as then come back and look at that later in an archive sense. Qik really adds strength to our mobile video platform overall. Mobile video is the next great area frontier for Skype.

BLOCK: Do you think that you might be a little bit late to the mobile party? I mean, how do you rank among those competitors who are already really active in that?

Mr. BATES: We launched our two-way video iPhone app. So that's an upgrade from what we had before in the marketplace. And we did it on New Year's Eve 'cause it's one of the most important video calling days of the year, maybe the most important day. And just to share with you some statistics, in the first 24 hours, we had 4 million downloads and 1 million Skype video calls.

And I think what differentiates us is that universal nature of Skype. Skype's available on television. Skype's available on desktops. Skype's available on a myriad of mobile phones. The reach is just the thing that I think is long-term differentiated for us.

BLOCK: Tony Bates, you're a relative newcomer to Skype. You started as CEO just a few months ago. And you came from an established powerhouse in the tech industry, from Cisco Systems, which is pretty much a traditional company with a really sturdy business model, making money from the sale of hardware and software. Why would you leave something like that, something that's known for a company where most of its users, as we said, get something for nothing they don't pay a cent?

Mr. BATES: Yeah, I think, firstly, Cisco's a wonderful company. And I was lucky enough to be there when it was a much smaller company and see it go from kind of the revenues that Skype is approaching through to obviously tens of billions of dollars a year. But what I would tell you is that it's a software company that can iterate and move very quickly with the market. We can enter mobile, we can enter the next generation living room.

But what I love about it is that we're providing more than just an established business model. We're looking at ways that we really shape and change the world. We really could bring education into classrooms. And that's important to me as well. We did a project with the U.N. HDR, in terms of how do we connect refugee camps together in very remote locations where the telecommunications infrastructure is not very strong? And maybe the refugee worker only got to spend, you know, literally 10 minutes a month just having the ability to even communicate by phone, let alone video. And we enabled that solution.

So for me that's very important. And I think we're just at the beginning of that. You know, these are big numbers, 145 million. But there's a lot of the planet that isn't there yet. And so, you know, the vision at the end of the day is to really link the planet in more, instead hundreds of millions using our service every month, more like billions.

BLOCK: Well, Tony Bates, thanks for talking with us today.

Mr. BATES: You're very welcome.

BLOCK: Tony Bates is the CEO of Skype.

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