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Microsoft explains Skype deal

by Scott Bicheno on 10 May 2011, 17:45

Tags: Microsoft (NASDAQ:MSFT)

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Microskype

The acquisition of Internet communications company Skype for $8.5 billion dollars marks Microsoft's biggest acquisition ever, topping the purchase for digital marketing agency aQantive back in 2007.

Microsoft hosted a live web conference earlier today to present the deal and answer questions. We'll get onto how Microsoft might incorporate Skype shortly, but given that Skype was valued by its owners at $2.7 billion less than two years ago, we were looking forward to how CEO Steve Ballmer would deal with the question of the price, which we assumed would be the first.

But not only was it not the first question asked, it didn't come up at all in a room full of analysts and journalists. Odd. Now we're not saying this isn't a good deal for Microsoft, and you would expect an unsolicited offer to have some kind of premium, but it's hard to believe the value of Skype has more than tripled in two years, even though stock markets have risen a fair bit in that time.

Anyway, "Think about every day experiences and how they can become more connected," said Ballmer to set the scene for the acquisition. He went on to stress how ‘engaged' Skype users are - in other words they actually use it - and how video chat now accounts for over 40 percent of Skype use.

There were a lot of references to one of Microsoft's key strategies: three screens, which aims for Microsoft ubiquity on the PC, TV and mobile phone. Skype calling, and especially video calling, could occur in the office, the living room and on the go, with Ballmer referring to Kinect as potentially "a home video conferencing system."

The Q&A session was cagy, both from a Microsoft and audience perspective. There didn't seem to be many tough questions asked, just queries about how Skype will be utilized by Microsoft, which led to reasonably generic statements about how excited everyone is, the sky's the limit, etc. Ballmer was challenged about Skype on rival mobile platforms, but he insisted they would still be supported and pointed to Office on the Mac as evidence of Microsoft's track record on that sort of thing.

Here are a few shots of slides shown during the presentation.

 

 

 

 

 



HEXUS Forums :: 9 Comments

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There goes free audio/video calls over Skype…

This is gonna be next hotmail I think.
Its a very very clever move for Microsoft and their cloud strategy.

Skype has the infrastructure in place for VOIP over the world - tie that into their online Lync offering within Office365 and you have a use anywhere softphone/ instant messaging / conference calling platform. All that can be controlled from your laptop while slurping your double caramel macchiato in Starbucks™
There's definitely an interesting way forward for Microsoft, could it be that they're planning on offering a version of Skype that ties more directly into their corporate plans? Offering VoIP messaging for business users in a secure fashion is something that would appeal, particularly with the ability to get a client on your smartphone.
Who knows what Steve Ballmer is thinking, but hearing all of this while talking about lots of cloudy things at MS Scotland's offices made the speaker speculate what Microsoft's purchase was all about.

Lync 2010 online already ties (Federates) into Live Messenger, AOL and connectivty to XMPP gateways is coming. Adding Skype into this mix just fortifies their position within the IM market. Also, if everyone has client software on their PC to do IM also just imagine that as an advertising platform and the revenue through that.
Lucio
There's definitely an interesting way forward for Microsoft, could it be that they're planning on offering a version of Skype that ties more directly into their corporate plans? Offering VoIP messaging for business users in a secure fashion is something that would appeal, particularly with the ability to get a client on your smartphone.

They already have the corporate offering in Lync server (Which I'm about to start having a play with at work with a view to setting up video/audio/web conferencing) which is available as a hosted solution or can be deployed inside the corporate firewall, as well as the ability to federate with other partners (for example to video conference with customers/suppliers).