The rumors about Facebook buying Skype can be officially put to rest after Microsoft swooped in and pocketed the popular VOIP brand for a whopping 8.5 billion dollars. The deal also includes the absorption of Skype’s debt – all in all, not a bad deal for Skype CEO Tony Bates.
However, this isn’t Skype’s first marriage. Back in 2005 Skype was bought by eBay. A relationship that failed to live up to its promise to take the internet phoning platform to the next level of growth, resulting in a sale to a group of private investors for 2.75 billion dollars.
Skype will become a business unit within Microsoft and will still be run as Skype (as reported by The Next Web team). Steve Ballmer, Microsoft CEO, hasn’t talked about any branding changes but with that price tag, I wouldn’t be surprised if Microsoft was looking for opportunities to get some rub-off for the brand as Skype is integrated into the Microsoft stable of products.
This acquisition will see Microsoft take their real-time communications to the next level, especially on their current platforms like Outlook, the Windows Phone, Xbox, Xbox Live, Kinect and Lync.
The more I look at this deal, the more clear it becomes to me that Microsoft needed this acquisition more than Facebook. Firstly I saw it as a kind of ‘Fountain of Youth’ for Microsoft who have been experimenting with different ways in the past few years to once again become a “cool” brand in a tech space dominated by Facebook, Apple and Google.
Secondly, as a complimentary service to Microsoft Lync (Microsoft’s VOIP answer to Skype that is targeting corporations and businesses), Skype will be more appealing to consumers and enterprise users. Jamie Nelson, from GetItHere expects this latest move to have some positive effects on the Lync system, as well as the brand as a whole.
“With Microsoft’s growing strength in corporate communication tools the acquisition of Skype gives them a combination of specialist resources, brand recognition, and a massive consumer client base. I would expect to see them keep Skype’s name and brand, but also use the same technology within their product Lync, allowing businesses the ability to access and communicate with clients for little to no cost, without compromising on manageability or security.”
Thirdly, we can see Skype being integrated into Hotmail to add a Google G-talk like feature.
And lastly, as there are no other big mainstream products other than the PC and Xbox in Microsoft’s arsenal, Skype brings along it’s existing 500 users and a product that is used heavily and endorsed by Oprah and CNN as their main online video interview tool.
The only downside I see is Microsoft being tempted to neglect the other platform offerings that Skype has, like the Skype’s Mac version. We all know Microsoft likes to stay comfortable in it’s own sand box. Exploration was never it’s forte especially with Apple and we know the history between these two companies. But Microsoft has been cross marketing its products to Apple users in recent years.
Leslie Kossoff of The Kossoff Group shares the same concerns. “Microsoft’s problem over the last few years (since Steve Ballmer took over) is that they make large acquisitions, but they don’t integrate them successfully,” she said.
The pros definitely outweigh the cons in this case though. From an everyday user’s perspective, nothing much will change, other than an expected step up with communication on current Microsoft platforms. All Microsoft needs to do is stand back and let Skype play its role as the wingman that helps make Microsoft cool again.
I would like to hear your thoughts on what you see as the pros and cons of Skype going to Microsoft. Will you still continue to use Skype?