News began to circulate last week about a preliminary meeting between Skype and BSkyB, a News Corp satellite unit, to discuss an acquisition by News Corp. News Corp, which includes holdings such as the Fox media outlets, is seeking to expand itself into the online world, but the estimated $3+ billion price tag for the Luxembourg based company may have been too high.

Since then, Skype has hired Morgan Stanley to help facilitate a transaction or take the company public. While Skype has raised more than $20 million in funding from private investors Howard Hartenbaum, Draper Fisher Jurvetson, Index Ventures, Bessemer Venture Partners and Mangrove Capital Partners, it simply needs more money to keep pace with its competitors. As an example, Vonage raised $200 million from investors earlier this year.

Of Skype’s advantages is that most consumers do not need additional hardware to run VOIP. Most VOIP providers use digital phones to connect to broadband networks. Skype, on the other hand, can run entirely as a web-based service where members use the microphones and speakers attached to their PCs or embedded in their laptops. With more than 147 million downloads of its software (free and premium), the interest from consumers and businesses is clearly there.

Business models for the company include charges for the ability to call landline and wireless phone number, in addition to opportunities for advertising, marketing and media distribution.