Skype Calls for IPO
Each day, Inc.'s reporters scour the Web for the most important and interesting news to entrepreneurs. Here's what we found today:
Skype's $100 million IPO. After a rough, dispute-laden spin-off from eBay last year that cost the company more than $300 million, Skype is going for an independent public offering in hopes of raising up to $100 million, the Financial Times reports. According to an SEC filling, shares should be listed on Nasdaq later this year. Before then, the company hopes to continue to grow its base of 560 million registered users (though only 8.1 million of them actually pay to use the online calling service). One key is converting more customers who use free Skype services to using premium services. But overall growth for the company has been brisk: Last year it became the largest carrier of international calls. TechCrunch reports that 37 percent of Skype users surveyed utilize make video and voice calls for business and, in that vein, Skype is planning to roll out some enterprise products in the near future.
Demand Media tests the waters. In other IPO news, Demand Media, the controversial company that pays writers absurdly low rates to create search-engine friendly websites, has filed with the SEC to go public. AllThingsDigital's Peter Kafka reads the filing, and reports that the company plans to raise $125 million, has annual revenues of $114 million, and lost $22 million last year. "First things first: Running a content farm, or factory, or whatever you'd like to call it is a big business," he writes. "But it's not profitable yet." Over at Search Engine Land, Danny Sullivan, outlines the risk that Demand Media presents to investors - namely that it is heavily dependent on search engine optimization.
Starting up in small-town U.S.A. Some investors looked askance and Geoff Cook's choice to locate myYearbook, the social networking site he co-founded, in New Hope, Pennsylvania. Didn't he know that New York, Boston, and the Valley were the places to be? Cook feels that there have been a number of advantages to running his 80-person start-up from a town of 2,200. One particular advantage was avoiding Silicon Valley groupthink. "Our early decisions to stay put made us natural contrarians on topics we may have viewed differently had we been in the Valley," Cook writes. He's referring to the company's choices to be cost-conscious and make revenue central from the start at a time when that wasn't what many tech and social-networking companies were expected to do. Cook also feels that this small town environment gives him access to an untapped talent pool and gives the company a more familial close-knit culture. For more on the challenges of entrepreneurship in a small town, see our feature on Youngstown, Ohio, attempting to turn itself into a tech hub.
A row on Savile Row. The Wall Street Journal reports on a tussle between high-end clothier that pits an upstart maker of bespoke suits against his former employer, Ede & Ravenscroft, a 312-year-old shop that has made clothes for Queen Elizabeth and Prince Charles. Matthew Farnes is a former "star fabric cutter," who "has gone rogue," according to the Journal. Farnes, to the horror of his old bosses, has been working out of his home, paying house calls to clients, and - gasp - blogging about it. Ede & Ravenscroft is suing Farnes for breach of contract, contending that he secretly made suits for a rugby team and stole client data. Farnes denies the allegations, telling the Journal, "Those comments about the Queen's inside leg measurements...I've never even met her."
Jobs, jobs everywhere. Sort of. Despite a 9.5 percent nationwide unemployment rate, the Wall Street Journal reports that many employers are finding it impossible to fill high-skilled jobs. Applications are pouring in, but since the recession forced most companies to cut mid-level jobs, employers are left with a massive amount of unqualified applicants. As one hiring manager put it, "We've always been looking for a needle in a haystack...There's still only one needle, but the haystack has gotten a lot bigger than it was before." According to the Labor Department, there have been twice as many job openings as hires since 2009, particularly in manufacturing. If these jobs were being filled, the Journal reports, it could bring the jobless rate down to 6.8 percent. Also in the Journal, Michael Fleischer writes from a hiring perspective why job growth is an expensive prospect for small business owners.
Foursquare opens a store. Now you can show everyone you're mayor, all the time. How? By wearing a Mayor t-shirt, of course. Or how about a button (or five) printed with badges, such as Groupie, Photogenic, or Jetsetter. The online storefront offers a fairly narrow selection at this point, and the company has said it will give away some swag to users who earn certain badge, so it doesn't appear to be a potentially big revenue stream. One neat tidbit: Foursquare used Sigler Companies, a small creative services firm based in Ames, Iowa, to create its store. On the company's blog, Foursquare writes of Sigler: "They're so into foursquare, they even sent us a photo of the day they had a company-wide swarm!"
Why some coffee shops are unplugging the Wi-Fi. It's hard to imagine a scenario in which a business takes away a perk to increase sales, but many independent coffee houses have decided to stop offering free Wi-Fi, at least during certain days and hours, the Los Angeles Times reports. The Times explains that although these coffee shops were some of the first retail businesses to offer free Wi-Fi in an effort to lure customers away from major chains like Starbucks, many are finding -perhaps not unsurprisingly to anyone who's jockeyed for a table in an independent coffee shop - "that Wi-Fi freeloaders who camp out all day nursing a single cup of coffee are a drain on the bottom line," the Times writes. "Others want to preserve a friendly vibe and keep their establishments from turning into 'Matrix'-like zombie shacks where people type and don't talk." One expert points out that there is now a market niche for not having Wi-Fi, especially after Starbucks stopped charging for it last month.
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CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.