Posted on 05/10/2011 6:42:35 AM PDT by SeekAndFind
Microsoft announced on Tuesday that it would buy Skype Global for $8.5 billion in cash, in its largest acquisition ever.
The deal will give Microsoft a boost in voice and video communications, allowing the company to leverage Skype’s technology on platforms including Xbox 360, Kinect and Outlook. It may also help Microsoft’s fledging mobile telephone offering, which lags far behind Apple’s iOS and Google’s Android operating systems. In 2010, Skype users had 207 billion minutes of voice and video conversations.
“Skype is a phenomenal service that is loved by millions of people around the world,” Microsoft’s chief executive, Steven Ballmer, said in a statement. “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.”
Despite its popularity, the service has struggled to maintain profitability. Since most of its services are free, Skype makes much of its income from a small group of users who pay for long distance calls to telephone numbers. In 2010, Skype recorded $859.8 million in revenue but reported a net loss of $7 million, according to a filing.
Microsoft’s deal-making history is mixed. The company has often been an smart acquirer of start-ups and smaller companies, analysts say, picking off technical teams that are then folded into products likes Windows, Office and Internet Explorer. But during Mr. Ballmer’s tenure as chief executive, beginning in 2000, the company has also made far larger, riskier bids, most of which have been viewed as unsuccessful.
In 2004, Microsoft entered into talks to buy the big business software company SAP, for about $50 billion, according to testimony that came out in a court case. In 2007, Microsoft acquired aQuantive, an online advertising company, for about $6 billion, a sizable premium, and some suggested it overpaid.
(Excerpt) Read more at dealbook.nytimes.com ...
Then, they repeated the Skype plug halfway through the discussion. The discussion was error-free, no delay, nothing remarkable about it -- there was no need to "explain" the nature of the connection.
It seemed very odd. I also note that the Bill and Melinda Gates Foundation seems to donate to NPR quite a lot. The media is just bought and paid for and they say what their backers want them to say. The only Truth I recognize now comes from the Bible.
I’ll be surprised if this isn’t the beginning of the end of the Skype we know and (mostly) love. Microsoft isn’t going to spend this much money on something that people mostly use for free.
Microsoft may as well spend it’s money on a longshot like this. But my guess is while they will acquire the customer base, other VoIP service providers will ultimately take many of them away, since there’s not a lot of differentiation. Many people use Skype because it was the first such service they tried, but if something that does the same job comes bundled on their new Android device, I can’t see many of them peeling it off just to use the Microsoft version.
And how, exactly, is Microsoft thinking they’ll make money from this???
Yep. Too bad, too. Skype is very useful and convenient. Once Microsoft gets through raping it, it will be neither.
Anyone remember when Hotmail was the No. 1 free email service?
As a heavy skype user, this blows. I hope they do not screw it up.
I’m not surprised I know the man that financed Skype............he is one ruthless s.o.b. but he always turns a profit.
MS and Skype have a lot of overlap in their products and in that overlap, MS had crushed Skype - having around 2/3 more customers.
What MS really doesn’t have is the true “phone” service that Skype’s developed.
Which MS will likely ruin.
That is odd. A Freeper listens to NPR.
The Windows & Office francishe is slowly dying. So, its important that Microsoft transform itself into something else. Unfortunately, it has a lot of diverse technologies with no central theme.
There is an alternative to Skype, called Telcentris Voxox,
that exceeds Skype in many ways, and is also interopeable with the Skype APIs,
It also allows very cheap international calls, or free calls to other Voxox users. TOo many features to name, but I’ve switched over recently. Occassional problem with echos in the sound quality, but not often.
I hate NPR. They drive me up a wall. Still, as I commute, I listen to NPR for as long as I can stand it, so that I can see what the enemy is thinking.
“As a heavy skype user, this blows. I hope they do not screw it up.”
I agree. I’m also a heavy Skype user. Skype really is an amazing program. Microsoft can do one of two things: make it better or mutilate it. Let’s hope for the former.
It’s awesome to talk to people all over the world (free if they are a Skype user or at very low rates if you are calling a landline or mobile).
And you can’t beat the unlimited USA & Canada subscription: $3 per month!
The one really good thing that Microsoft could bring to Skype is BANDWIDTH. They have the capital to do it and pushing the bit rate way up to HD levels would be a very big deal. I really don't think there is anything holding them back except a huge investment in servers and some software development.
So I'm betting they will do it, charge a premium for it and people will buy it if the price is right. Maybe give away 20 minutes a month for free and then it's premium if you want more. Let them get a taste of it.
Time to start looking for a replacement. I imagine that in a year or two, Skype will be a Windows-only app.
Does that mean Skype is going to become even less stable and more of a resource hog? It’s amazing to me that software is so popular, it’s so bad.
They spend a lot of money on IE and give it away free. It all depends on how well they can leverage it as a destination for development.
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