Ever since Tuesday, when the Wall Street Journal announced Microsoft has acquired Skype, Skype-Microsoft is what everybody’s talking about. Or more precisely the obscene amount of money the software giant from Redmond has agreed to pay for a VoIP company with more than $850 million in revenue, 170 million active users around the world (That’s $50 a user), and… tons of competition.
Considering that Microsoft has just recently launched Lync, which offers – well – voice and video chat and instant messaging, the Skype deal may seem strange. But if you come to think of Microsoft’s lack of success in the mobile market, including the lack of popularity and availability of the Microsoft messenger on mobile platforms, things make a lot more sense.
Bill Gates Buys Skype by Ssoosay.
I’ve written here about Skype various times. In a nutshell I would say this: EVERYONE is using Skype (well, apart from Joel Stein); Skype has a big user base, but lacks in interoperability and platform support; Skype has been fighting with the rest of the VoIP community, and I hoped someone (I suspected Facebook) would bring them to their senses; and last but not least – I was betting (last year, but still…) that the consumer and enterprise worlds will merge sooner than we think.
My friend Dave Michels wrote just one day before the deal was announced that Microsoft should win the bidding war over Skype:
Skype’s chief asset is their user base. Their technology is not that special… In fact they don’t even own all their technology…
Another key asset is partnerships. Skype has plenty – with hardware vendors, but even more importantly with mobile vendors and carriers. Skype works on most carriers and most mobile devices – including iPhones, iPads, and Android devices.
Microsoft makes the most sense to me… Skype is an increasingly important tool that Microsoft does not have covered.
Supposedly Microsoft is “all in” on the cloud. If Microsoft owned Skype, they could connect the service to its mobile devices, Xbox platform, hosted offering, and Lync.
Nokia Phone 7 with Skype inside!
With Microsoft’s recent deal with Nokia to jointly create a market-leading mobile product line, acquiring Skype makes a lot of sense. On the other hand, Skype has been eyeing the enterprise world for a while, focusing mostly on SMBs, calling these types of services as a significant potential for growth in revenue.
Now merge the inspirations of Skype, headed by CEO and ex-Cisco exec Tony bates, and the comeback plans Microsoft is making for the mobile market, and you can almost smell Microsoft’s plan to rule the mobile world, as my friend Hillel Fuld calls it: a new mobile OS, distributed using Nokia’s channels, and featuring Skype, as the answer to Apple’s Facetime and Android’s Google Talk.
Still, there are many questions around this deal. The big question is how Microsoft will merge Skype into their organization – will it remain as a stand-alone business (much like Cisco’s Webex) or would it become MS-Skype (?), and lose some of it main features, especially the fact that it’s free, and some of it’s “coolness”. Other questions that come to mind: will Microsoft turn Skype into a more open, standardized service? Will Microsoft use Skype as a solution to federate successfully between the consumer and enterprise world, once and for all? Will Microsoft continue to “distract” Skype, causing it to lose focus and market share for the competition?
MS Skype, a first prototype. By Houbi.
The critics are very skeptic. (They always are, aren’t they?) It seems as they are sure Microsoft are about to “screw it up”, as Erick Schonfeld of Techcrunch defined it. Add that to the ongoing criticism of Nokia, significantly lagging behind the market, and you see how things are far from simple or clear.
Still it’s a very big day for the VoIP community when a company like Microsoft acquires a company like Skype for a sum of money like the one announced last week. Only time will tell whether this would be a game changing play or a grave digging one.