With everybody from Google (Nasdaq: GOOG) to Apple (Nasdaq: AAPL) to Vonage (NYSE: VG) trying to horn in on its free-phone calls-over-the-computer business, Skype's IPO would never be an easy sell. But give the company credit: Skype's making an honest effort at getting this thing off the ground.

Yesterday, Skype announced that it's poached a key VP from rival Cisco (Nasdaq: CSCO) to run the company en route to its IPO -- and not a moment too soon. The exec in question, Tony Bates, has been running Cisco's enterprise, commercial, and small business unit (and he was reportedly being groomed as a potential successor to CEO John Chambers).

Importantly, Bates has been recruited on the eve of Cisco's own announcement of a major move into home telephony. In its own press release yesterday, Cisco announced that it will hold a webcast tomorrow to reveal a "new Cisco consumer experience." The company played coy on the details, but word has it that Cisco will be laying out its latest effort to bring Internet-based video to Joe Public

According to the Wall Street Journal, Cisco will price its new system -- a video camera that connects to your hi-def television -- for $600, plus a $30-a-month subscription fee. That may seem a bit much to pay for a higher-end version of something Skype gives away for free. Either way, though, Cisco seems to be breaking new ground here, offering the toiling masses of home-office workers a high-end videoconferencing capability that only well-heeled corporate muckety-mucks could previously afford.

Clash of the Titans?
Is this a battle royale for the hearts and minds of would be video-phoners? Is free video-chatter Skype trying to cut the legs out from under premium-video purveyor Cisco, just days before its big announcement?

Maybe. But from where I sit, Cisco wins this battle either way. To me, Cisco's grand plan extends well beyond bringing cheap-and-easy consumer electronics to the masses. Cisco wants to accelerate and broaden the consumption of bandwidth, so that companies such as Verizon (NYSE: VZ) and AT&T (NYSE: T) need to buy more routers, switches, and related Inter-widgets to support all that new traffic.

Under that scenario, it doesn't really matter whether consumers choose low-end or high-end videotelephony. All roads lead to a brighter future for Cisco.

Fool contributor Rich Smith owns shares of Google. The Motley Fool has a disclosure policy.

Google is a Motley Fool Inside Value choice. Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor pick. The Fool has written a bull call spread on Cisco Systems. The Fool owns shares of Apple and Google.

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