€164m invested in Skype's Irish arm

INTERNET PHONE call provider Skype injected €164.6 million in new funding last year to a loss-making Irish subsidiary that holds the intellectual property rights to its technology.

Accounts just filed for Skype Limited, whose registered office is listed as the Arthur Cox Building in Earlsfort Terrace, show that it received a “contribution from shareholder” of €100 million in 2009.

This compared with a contribution of €140 million in 2008.

In addition, new shares worth €64.6 million were also issued in 2009.

This injection of money into the business boosted the Irish company’s shareholder funds to €207.3 million by the end of last year.

Skype Ltd is owned ultimately by Skype Global, a company registered in Luxembourg. The Irish entity licenses Skype’s technology to others firms within the group.

It also provides technical support, maintenance and repair services to other Skype companies.

A note to the accounts on its status as a going concern states that the parent company has “pledged to provide continued funding if required to enable the company discharge its liabilities as required”.

The Irish company made a loss for 2009 of €34.8 million, compared with a loss of €36.3 million in the previous year. By the end of 2009, Skype Ltd had accumulated losses of €142.4 million.

Its turnover was just €2.4 million in 2009, up from €1.6 million in the previous year.

Research and development costs amounted to €30.6 million last year while it spent €5.8 million on legal and professional fees.

It also took a charge of €976,630 relating to the amortisation of intangible assets and made a loss on foreign exchange of €172,807.

The accounts show that a dispute was settled during the year with Joltid, a shareholder in the business, “over the use of certain peer-to-peer communications technology”. As part of the settlement, ownership of the Joltid software was transferred to Skype Ltd for €58 million.

“In 2010, the business is expected to continue to grow and will require further investment in intellectual property rights to improve the software,” the directors’ report states.

No comment was available from Skype yesterday.