The days of Skype as an independent force in the industry are over for the second time now, as Microsoft today closed the purchase of the one-time VoIP wunderkind from Silver Lake for $8.5B. Skype has now become a new business division within the software giant, with Tony Bates assuming the title of president of the division.
So now we get to see just what Microsoft has in mind with this purchase. At the moment of course, the talk remains quite general:
Steve Ballmer: “Skype is a phenomenal product and brand that is loved by hundreds of millions of people around the world. We look forward to working with the Skype team to create new ways for people to stay connected to family, friends, clients and colleagues — anytime, anywhere.”
Tony Bates: “By bringing together the best of Microsoft and the best of Skype, we are committed to empowering consumers and businesses around the globe to connect in new ways. Together, we will be able to accelerate Skype’s goal to reach 1 billion users daily.”
A billion users daily using Skype rather than traditional voice connections? That would certainly have an impact on the industry… Overpriced voice and SMS bits continue to hold a big place in the revenue structure of both fixed and mobile telecommunications companies. That’s something that will have to change one way or another, but will it be Microsoft that makes it happen?
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Categories: Mergers and Acquisitions · VoIP
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either Skype has some serious intellectual property that MSFT desperately wanted (and i mean desperately) or this will go down as one of the worst acquisitions of all time.
The 2005 Ebay purchase of Skype for $2.6b skype made no sense back then and was later written down by $900m before Skype was actually sold by EBAY in 9/2009 for roughly $1.9b with Ebay retaining a stake.
For MSFT’s sake, I hope the bigger fool theory still holds because it’s impossible to imagine this investment paying off.
Is Microsoft now the largest communications company in the world?
No, not by a long way.
i wouldn’t be so sure… perhaps you work for a PTT?
as of 09 skype had largest share of cross border minutes traffic. and was still growing faster than the rest of the industry combined. and now will be integrated into all MS desktops, corp exchange accounts and mobile devices. this is the best evidence yet that the data monster has swallowed yet another industry – this one is legacy Int’l LD telephony.. Not 20 years ago this was one of the largest for profit markets in existence.
The LD guys can share stories about how they didn’t expect to be de-throned by “low quality” VOIP. They can hang out with other IP-decapitated industries, e.g., book, music, newspaper, porn, games, video (happening) and other industries…