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Old 05-10-2011, 05:13 PM
Jason Dunn
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Default Microsoft Buys Skype: This is Good for Windows Phone 7 and Windows Tablets

<div class='os_post_top_link'><a href='http://www.microsoft.com/Presspass/press/2011/may11/05-10CorpNewsPR.mspx' target='_blank'>http://www.microsoft.com/Presspass/...CorpNewsPR.mspx</a><br /><br /></div><p><em>"Microsoft Corp. (Nasdaq: "MSFT") and Skype Global S.&agrave; r.l today announced that they have entered into a definitive agreement under which Microsoft will acquire Skype, the leading Internet communications company, for $8.5 billion in cash from the investor group led by Silver Lake. The agreement has been approved by the boards of directors of both Microsoft and Skype...With 170 million connected users and over 207 billion minutes of voice and video conversations in 2010, Skype has been a pioneer in creating rich, meaningful connections among friends, families and business colleagues globally...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."</em></p><p><img src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/wpt/auto/1305043671.usr1.jpeg" /></p><p>I was initially a bit skeptical of the Skype purchase - and boy, I'm impressed that Microsoft and Skype were able to keep this a secret until just before the announcement - but upon further reflection (and reading the thoughts of others) I think this is a good move. Windows Live Messenger already has voice and video capabilities, but it never attained the mindshare and usage patterns of Skype. Skype has become a verb, and owning a verb in our world is a powerful thing. The biggest news for Windows Phone users is that you can bet powerful and deep integration into Windows Phone is now on the map. Skype's huge user base is nothing to scoff at, and if Windows Phone becomes the premiere Skype platform - especially as VOIP usage continues to soar - that can only mean good things for Windows Phone, and for the future tablet-optimized version of Windows 8.</p>
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Old 05-10-2011, 06:33 PM
Michael Knutson
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Here are my thoughts from earlier today:

I guess that I don't understand today's economics: eBay bought Skype for $2.6 Billion in 2005 and are selling it to MS for $8.5 Billion. Skype continues to lose money. Debt of $544 Million. Lost $8 Million in 2010. MS to integrate with XBox, Outlook and Windows Phone (?). I don't see the upside for Microsoft (other than keeping it out of Facebook's hands).

And ...

Today video conferencing is a commodity. Users do NOT want to pay for video. Witness Cisco's problems with Umi and Cius.

Add Skype to Windows phone? pretty expensive purchase for integrating into a platform that has a tiny market share today ... Maybe when Nokia gets rolling it'll make more sense ...

Bandwidth. Not enough of it in North America. Video from a mobile device? Maybe in 10 years.

Microsoft bias: As with Apple, there is a large community of MS bashers who will probably hate (and possibly boycott) anything that MS does ...

Outlook? I just don't see it. Enterprise tool, and most enterprises don't want to roll-out desktop video conferencing, at least the large companies that I've been associated with (besides Cisco).

I hope that much larger brains than mine have thought about these things ...
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Old 05-10-2011, 07:28 PM
ptyork
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Michael, I agree with everything you said. Economically, a big partnership makes more sense. BUT, you do fail to take into account the Elephants in the room. Facebook and Google. They were both on the fence to purchase Skype if MS didn't act. And then they likely lose the potential for integration altogether. Certainly any potential for exclusivity. It also takes away the (political) problem of cannibalizing live messenger.

I also think perhaps the bigger deal here will be XBox integration. It fits the Kinect like a glove. Microsoft's been trying to make the living room TV the computing hub for a LONG time, and this is another step in that direction. Ubiquitous, ***universally compatible*** video conferencing.

I doubt this will ever generate substantial revenue for Microsoft, but it MIGHT be a decent net gain from an overall platform perspective.
 
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Old 05-10-2011, 08:31 PM
sundown
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I have a bad feeling about this acquisition. I'm not a Microsoft hater but in my observation, they have a bad tendency of screwing up good products. Plus, I'm concerned that this means Skype will only ever see support on MS devices. One step forward, two steps back?
 
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Old 05-10-2011, 08:43 PM
Jason Dunn
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Quote:
Originally Posted by sundown View Post
I have a bad feeling about this acquisition. I'm not a Microsoft hater but in my observation, they have a bad tendency of screwing up good products. Plus, I'm concerned that this means Skype will only ever see support on MS devices. One step forward, two steps back?
But if you look at Microsoft's recent efforts - Bing apps on iOS, Android, etc. - I think Microsoft has shown that when they want to build market share for a product, they'll support other platforms. I don't expect that to change.
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Old 05-11-2011, 08:42 AM
Fritzly
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I hope that this acquisition means that MS is ready to invest some more money to launch a MS branded phone, free of carriers nefarious influence.

I am sure that AT&T and Co. are not really happy to see Skype added to the next iteration of MS OSes.
 
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Old 05-11-2011, 01:01 PM
virain
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Once upon a time MS Messenger was very popular. Than came Skype with free phone calls naionwide and low international rates, MS answer was partnership with Verizon, $002 per minute nationwide and not so low, rather high, international rates. MS messenger lost it's market share, MS tried to fix the problem partnering with other, "cheap" VOIP companies, but.... Does anyone still uses MS messenger to make calls? Button line, Skype may not make money for MS directly, but it will add a great deal of value to existing, and profitable MS products, hence put them ahead of competition.
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Old 05-11-2011, 03:23 PM
Jason Dunn
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Quote:
Originally Posted by Fritzly View Post
I hope that this acquisition means that MS is ready to invest some more money to launch a MS branded phone, free of carriers nefarious influence.
Just my 2 cents, but I doubt that - Windows Phone is a platform for hardware partners, not a Zune-like model where Microsoft will do things themselves. Frankly I prefer the hardware partner approach - how many choices do you have with Zune now? Exactly one model. I want more choice than that.

Quote:
Originally Posted by Fritzly View Post
I am sure that AT&T and Co. are not really happy to see Skype added to the next iteration of MS OSes.
Voice is a rapidly vanishing usage scenario; people still make calls of course, but overall less often compared to a few years ago. Data is where the money is at, and as carriers move toward LTE, they have the capacity to shift voice to VOIP (that's my understanding at any rate)...so I'm guessing they won't mind. I guess we'll see!
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Old 05-11-2011, 03:57 PM
Fritzly
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Quote:
Originally Posted by Jason Dunn View Post
Just my 2 cents, but I doubt that -



Voice is a rapidly vanishing usage scenario; people still make calls of course, but overall less often compared to a few years ago. Data is where the money is at, and as carriers move toward LTE, they have the capacity to shift voice to VOIP (that's my understanding at any rate)...so I'm guessing they won't mind. I guess we'll see!
I doubt too, unfortunately I would add because MS has always made excellent hardware; the Zune was not really succesfull for unnumerous reasons, among them I think the most important is that MS never really pushed it. I abandoned it because of the stupid and artificial limitation that made the device unusable as a mass storage one......... and Wp7 has the same issue..... :-)

I am not very knowledgeable about Carriers crippled phones, I never bought or used one of these devices but my understanding is that they disallow VOIP and other features on the devices they give to customers. Time will tell although with all these caps popping up everywhere I am afraid that it will get worse before getting better........
 
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Old 05-11-2011, 04:47 PM
virain
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Well, I do agree that future is in VOIP and data, but I don't see why would carriers "cripple" devices to prevent users from using those features. Skype video call works very well on iPhone on AT&T network, there are no problems to make a VOIP calls on Android devices, if you reffer to Apple's FaceTime or whatever you call it, that has been made to make only Wi-Fi calls by Apple, not At&T. If carriers REALLY didn't want you to use VOIP services, they are more likely to raise prices and limit usage of data even more, it is more profitable for them, and they are in the business for mone, nothing else.
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