New CEO Has Big Plans for Skype

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Bates is ready for the challenge. Before joining Skype, Bates ran Cisco's enterprise, commercial and small-business division. "I was brought in to take Skype to the next level," said Bates, who joined the company in October after serving as a senior vice president at Cisco Systems. "I was surprised at how much opportunity we have."

Skype earned $13 million on $406 million in sales in the first six months of this year. But more than 90 percent of that revenue came from charging users to make calls from its software to mobile and landline phones, evidence of the narrowness of its revenue base. And only 8.1 million of its 124 million monthly users actually pay to use the service.

In addition to attracting companies and big corporations to use Skype, he also hopes to charge consumers for unspecified "premium services." Skype aims to attract new users and keep existing ones by extending its service to TV and mobile devices. Already about 40 percent of calls made using Skype are video calls, Bates said, indicating a potentially big market for allowing consumers to make and receive such calls on their big-screen TVs.

To help it reach its goals, Skype is hiring staff in the Bay Area. The company employs 830 people globally, 110 of whom work in its Palo Alto office. It plans to hire 300 to 400 workers over the next year, 80 percent of whom will work in Palo Alto, Bates said. Skype already has a global presence, thanks to its European roots, and that the company feels a need to bulk up here in the valley.

That hiring locally is one of the bigger differences between Skype and other area Internet companies. Many of those -- particularly the startups -- are outsourcing much of their development efforts to Asia.

To help fund that expansion, Skype has plans to raise as much as $100 million in a still-unscheduled initial public stock offering. The company hasn't yet said how many shares it plans to sell or at what price.