I was going through an issue of the Economist from last year. I’d like to see what they got right. In an article about Skype, the VoIP pioneer, it highlights that their R&D department is located in Eastern Europe.
In a nondescript Soviet-era building in a suburb of Estonia’s capital, Tallinn, is one of the telecommunications world’s most important research outfits. It is the development centre for Skype, a software product that allows free, or very cheap, phone calls from any internet-connected computer.
I’m not sure if the correct term in this case is outsourcing. It’s not offshoring either. What happened is that Skype built their own team in a location where they felt the best talent is. Costs are probably low as well but keep in mind they could find much cheaper. After all, Estonia is part of the European Union now, as are Romania and Bulgaria.
The important point is that based on the strength of that team AND Skype’s established “distribution channels” (from their Kazaa days), Skype was acquired for close to three billion dollars. That’s about twice what Google paid for Youtube, the prodigy of the web 2.0 generation.
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