Microsoft has Skype flakes for breakfast
By now you must have heard of Microsoft’s takeover of Skype. If not then leave your cave and get some vitamin D.
What’s got everybody buzzing was that the takeover came with a hefty price tag of $8.5 billion. Its the largest cash buy Microsoft has ever done. The truth of the matter is that Microsoft has been having a tough time with Apple and Google kicking their butt all over the place so what a better way to scare off other investors and scoop up Skype while they can. Facebook and Google were potential buyers too as Skype has been on the market for a while. Microsoft aims to integrate its own business and better itself with the internet telephone service. Skype has up to 700million users and is respected as a great network for people who want to stay in touch with friends and family all over the globe.
Steve Ballmer, CEO of Microsoft, took the ballsy move and made the deal with Tony Bates, CEO of Skype. After the big move everyone is anxious to know what will become of Skype and how beneficial will this deal be in the future. People are obviously skeptical. In 2010 alone Skype generated $860 million in revenue with a net loss of $7 million. A question that comes to mind: What is Microsoft’s plan for this 0.0% profit company…
Om Malik makes great arguments on this case, see – http://bit.ly/lTUQJu. These are Malik’s possible reasons for Microsoft’s gigantic purchase:
- Skype gives Microsoft a boost in the enterprise collaboration market, thanks to Skype’s voice, video and sharing capabilities, especially when competing with Cisco and Google.
- It gives Microsoft a working relationship with carriers, many of them looking to partner with Skype as they start to transition to LTE-based networks.
- It would give them a must-have application/service that can help with the adoption of the future versions of Windows Mobile operating system.
- However, the biggest reason for Microsoft to buy Skype is Windows Phone 7 (Mobile OS) and Nokia. The software giant needs a competitive offering to Google Voice and Apple’s emerging communication platform, Facetime.
Lets hear it from the words of Microsoft themselves, below are extracts from the press release on Microsoft’s News Center site. http://www.microsoft.com/Presspass/press/2011/may11/05-10CorpNewsPR.mspx
Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms.
“Skype is a phenomenal service that is loved by millions of people around the world,” said Microsoft CEO Steve Ballmer. “Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”
Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Ballmer.
“Microsoft and Skype share the vision of bringing software innovation and products to our customers,” said Tony Bates. “Together, we will be able to accelerate Skype’s plans to extend our global community and introduce new ways for everyone to communicate and collaborate,” Bates said.