Skype appoints new CEO

Faith Merino · October 4, 2010 · Short URL:

Josh Silverman steps down and Tony Bates of Cisco becomes new Skype CEO

As Skype gears itself up to go public after its August SEC filing, it's taking inventory on who's in and who's out. On Monday the company appointed a new CEO, Tony Bates, a senior VP at Cisco.

Bates previously ran the enterprise, commercial and small business development group, and was GM of the service provider group at Cisco. Between the two groups, he was reportedly responsible for some 80% of Cisco's business and 50% of profits. With 12,500 employees at his command and $30 billion worth of Cisco revenue in his hands, Bates is leaving a pretty lucrative position to move to Skype, which says a lot about Skype (or Cisco, depending on how you look at it). 

Since its spin-off from eBay earlier this year, Skype has overhauled its leadership and now has a new CFO, general counsel, chief marketing officer, and head of engineering. Bates will join the crew at the Skype headquarters in Luxembourg at the end of October. Until then, Skype CFO Adrian Dillion will be acting as CEO.

Former Skype CEO Josh Silverman will be stepping down to make room for Bates. Silverman, a former eBay executive, joined Skype as CEO in 2008. Under his leadership, Skype became profitable, and the company is on track to generate $800 million in revenue this year. Next year, it is anticipated to break the $1 billion mark. 

Bates is the second Cisco executive to join Skype in the last year. In November 2009, Jonathan Rosenberg, a Cisco Fellow in Bates' Technology Group, left Cisco to become chief technology executive at Skype. Bates is expected to help Skype generate more revenue by upping the number of paid Skype users. Of Skype's 124 million monthly users, only 8.1 million are paid users. Currently, the service allows users to make free video and phone calls, while earning revenue on users who are charged per-minute on phone calls to those who don't use Skype.

The company filed for an initial public offering in August but many have been unclear about when the company would actually complete the IPO. The volume of IPOs that have been postponed this year has reached a record $69.7 billion. Many believe that Bates was brought on to lead the company through a multi-billion IPO.

Skype was acquired by eBay back in 2005 for $2.6 billion, but eBay never integrated the service into its online auction business. In November 2009, eBay announced that it would be selling Skype to a group of investors from Silver Lake Partners. Ebay has stayed on as a minority owner, though, retaining 30% of the company. Other minority owners include the Skype founders, who own 14% of the company, and entrepreneur Marc Andreessen of Andreessen Horowitz.

To fill the gap left by Bates, Cisco announced that CTO Padmasree Warrior would be taking over to head the enterprise, commercial and small business development group as SVP/MG. She will also be staying on as CTO. Padmasree joined Cisco in 2007.

There has been no word about Josh Silverman and where he will be going.

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