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Microsoft to buy Skype for $7 billion
- ashbrahma 15y agoThat's a pretty good return for the Horowitz + Original founders team who bought it for $2.75 Billion in November 2010..
- bobx11 15y agoI think a lot of people would try to use other services if this goes through.
- eropple 15y agoHilariously unlikely, unless your definition of "a lot" is small enough to cover the more neckbeardy sorts in the Linux community and maybe a few ABMers. Most people just don't care so long as the software works well. (Whether Skype does work well is debatable, but given its popularity, it seems to work better than the rest of the options available. EKIGA SOFTPHONE, EVERYONE!)
- joshzayin 15y agoIf this goes through, I wonder what would happen to Skype's Linux and Mac support. I'd hope MS would still support it, but I don't think they have any Linux software currently (I'm not positive about that, so please correct me if I'm wrong) and the Mac version of Office is always delayed compared to the Windows version. I hope Skype doesn't similarly languish.
- phlyingpenguin 15y agoSkype very nearly doesn't have Linux software either. The mac software is similarly less than focused on as well.
- william42 15y agoI've used the Linux version of Skype. It's rather bare-bones.
- damncabbage 15y agoWhich is great. It does pretty much everything the Windows client does (chat, voice, video, desktop sharing), without the big, gaudy, annoying interface. I fear that it'll just go away, or actively get shut down by compatibility changes. (My friends and I practically live on Skype. The one killer feature for us is persistent chatrooms; it's like IRC, except when I log in I get all the missing chat history I didn't get while I was logged out.)
- lurker19 15y agoWhat version of Skype and Linux do you have that doesn't have the giant interface and a dozen windows open at once to show a dozen chats?
- Dylan16807 15y agoThe linux client is missing a critical feature for me: joining an in-progress audio call. One call I'm in is almost always running, and the host is often not there to add me. I end up running windows skype in a VM when I'm on linux.
- navs 15y agoYes, I found this very annoying. I remember the previous OSX version was also missing this and I often got laughed at because I couldn't join a call. Apparently this was Steve Jobs fault or something along those lines.
- 13Psibies 15y agoSkype is demonstrably worse on Linux. Aside from it's tendency to lock up, its support for conference calls is wrong; for example, if you're in a call, and call out to a phone number it offers to add the new call to the conference after you've made the request.
- pyre 15y agoOne of Skype's major strengths is that you can use it to communicate with others regardless of operating system (for the most part... they don't have BeOS client, etc). Personally, I think there would be a large migration to something else if that changed: 1. Linux/Mac users would move because they had to. 2. Linux/Mac users that use Skype to communicate with long-distance friends and family would convince them to jump ship to another platform (if only to be able to do video conferencing). 3. People pissed off at MS would migrate on principle (though maybe only if there was a viable alternative to the way they currently use Skype).
- cookiecaper 15y agoThere really isn't anything better on Linux, sadly. I wrote a longer comment about this a few days ago, but the gist is that Skype is the only semi-reliable video chat/SIP client for Linux, even factoring in serious neglect from Skype Inc. for the platform. This acquisition probably is the final nail in the coffin for Skype's hypothetical open-source Linux client. I don't have high hopes at all that alternate versions of Skype will be kept up very long. Everything Microsoft does eventually leads back to Windows or Office.
- technomancy 15y agoHuh? There are plenty of better voice-only Linux clients. It's really only in video that Skype has the edge.
- cookiecaper 15y agoCan you clue me in? I just tried several a couple of weekends ago and it didn't work out. Twinkle was good but hasn't been updated for years and doesn't work with PulseAudio. Everything else barely ran.
- technomancy 15y agoEkiga, Wengo, and Pidgin are the ones I've used; they all performed fine.
- cookiecaper 15y agoEkiga doesn't pick up the other end of the call for me when I tried it a few weeks ago (the person is there but no sound output from their side of the call). I actually used Ekiga extensively for a while (I even wrote a partial patch for GCC 4.4 compatibility, this was ~early 2008) and could eventually get it to work most of the time, but it frequently had problems; it would crash, drop sound, leave the device busy from the last call, etc. Lots of problems with it. Went back to Skype. I tried Wengo (now QuteCom) and couldn't get it to pick up the sound device or something like that. Maybe another PA bug, but PA has been a default feature of Linux desktops for 3-4 years or more by now. I don't remember the exact issue I had with it. Pidgin isn't made for SIP/VoIP applications but I still haven't ever been able to get the gstreamer connector to respond correctly. The only IM client with which I've had success using video chat is Empathy, but it had a few issues too with closing devices/picking up subsequent calls. Maybe it's just because I use Arch, but Skype is the only mostly-reliable video conferencing/SIP-like app on Linux that has actually been usable for me.
- mahrain 15y agoMicrosoft is actually not too bad at Mac support, their Office is usually one year later than the Windows version (Office 2011 vs 2010 for PC, all the way back to Office 98 for Mac vs 97 for PC). And then they make the Expression suite, Microsoft Messenger (Windows Live client), Silverlight and Windows Media components.
- cfinke 15y agoMaybe I've missed something, but what has changed in the two years since eBay spun off Skype at a valuation of < $3B to make it worth more than $7 billion today?
- mgkimsal 15y agoThe value of the dollar's dropped. Not by that much, but it's certainly changed. That, and ebay never figured out how to monetize it. MS likely has some plans in place to aggressively make money from it. I'm a skype subscriber, and probably will continue to be one, assuming they keep at least the same level of support for Macs.
- cfinke 15y ago> The value of the dollar's dropped. Since the owners are almost all US-based (I think), fluctuation in the dollar against foreign markets shouldn't have much impact on Skype's pricing. Even so, the dollar's value against the Euro hasn't hardly changed at all: eBay announced their sale of Skype on September 1, when 1 USD = 0.7 EUR. Today. 1 USD = 0.6975 EUR.
- mgkimsal 15y agoI guess the sarcasm didn't come through - forgot my smiley face. Too many talk radio commercials telling me to buy gold were behind that knee-jerk observation. I think the higher price is partially because MS may have a strong monetization plan in place and they don't want anyone else to get it.
- prostoalex 15y ago> a group of technology investors including Silver Lake Partners, venture capital firms Index Ventures and Andreessen Horowitz, and the Canada Pension Plan Investment Board
- pyre 15y agoSept 1: 1 USD = 1.05 CAD Now: 1 USD = 0.96 CAD Not to mention that the valuation was done in US dollars, and the sale is being done in US dollars.
- shrikant 15y agoTFA talks about how this "could play a role in Microsoft's effort to turnaround its fortunes in the mobile phone market". Personally I feel this could be more about Microsoft strengthening its enterprise communications portfolio. Communicator/Lync is a giant turd, and this could be their play at Cisco's market, rather than Apple/Google's. (Incidentally, the Skype chief exec Tony Bates is ex-Cisco)
- Encosia 15y agoI must disagree. I've loathed Live Meeting for years, but Lync is stellar. I vastly prefer a Lync call/meeting to dealing with Skype.
- josephcooney 15y agoI haven't tried Lync since it was re-branded from communicator. Communicator is very special in that it is one of the few teams that the 'Live' team could look down on.
- dman 15y agoI hope all the IP is included in this deal.
- acqq 15y agoIt seems so, this time: http://about.skype.com/2009/11/joltid_settlement.html http://about.skype.com/2009/11/joltid_settlement.html "eBay Inc. and Silver Lake Investor Group Settle Skype Litigation with Joltid Limited"
- latch 15y agoWeren't we talking about Google or Facebook buying Skype a few days ago at $1-3 billion? What the heck happened? Insecurities?
- benologist 15y agoFaced with 3 awful choices they chose the one with most money.
- fredoliveira 15y agoI don't disagree with you as to what happened, but I'm genuinely curious as to why you think that Microsoft, Google and Facebook are all awful choices.
- benologist 15y agoGoogle has no support, Facebook is staging a war against privacy, and Microsoft has some pretty meh software outside of Windows (when they bother to have any version at all). I guess ultimately MS buying it was not the worst decision - a second-class client on non-Windows is better than Google not supporting it till the users give up and they can discontinue it, or Facebook defaulting to telling the whole frigging world every time you phone someone or sharing your Skype address with every scabby app developer out there. But it was really a lame lineup to choose from. I don't know who I'd actually have liked to buy Skype, but not these three.
- brianbreslin 15y agoYou are looking at this too much from your viewpoint as a consumer, not skype viewpoint as a Corp.
- benologist 15y agoOf course ... I've been a (paying) user of Skype for years, I don't care about what's best or least-bad for them as a corporation, I care about me!
- 1880 15y agoI guess the Linux client will stay beta forever... sigh
- natesm 15y agoThat's probably best, after what they did to the Mac one.
- lurker19 15y agoSkype 2.8 for Mac exists and is from better user experience than any Windows or Linux version.
- Duff 15y agoHuh? I understand that Microsoft is sitting on billions in cash, but couldn't they just pay a dividend?
- whakojacko 15y agoThey do, and a solid 2.5% at that. Not that Im saying this is a good idea, though...
- dstein 15y agoPaying a dividend will not save Microsoft. Even Microsoft realizes that.
- philwelch 15y agoIt will serve the long term interests of Microsoft shareholders; sadly, Microsoft doesn't realize that.
- dstein 15y agoDividends reward short term shareholders. Capital reinvestment rewards long term shareholders (if it's successful).
- Duff 15y ago10 years ago, Microsoft was $35. Today it is $25 and change. Not very rewarding. Microsoft is like the electric utility of the technology business -- they should embrace that or wake up and break up the company into manageable parts. Buying Skype? That's not creating shareholder value.
- dstein 15y agoWhen you look at Microsoft's acquisition history http://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Microsoft http://en.wikipedia.org/wiki/List_of_mergers_and_acquisition... There aren't many very large brand name "statement" acquisitions there. Most are small companies you've probably never heard of. I think this Skype acquisition is a clear message that Microsoft is playing hardball now.
- deleted 15y ago[deleted]
- mgkimsal 15y agoA few thoughts: When we see the mac version stagnate, we won't be able to say MS has sabotaged it - skype did that before on their own. The linux version has never been on parity with the others - will it be officially killed? Might MS actually put resources in to it to make it work as well as the others? Overall, good on MS for doing this. I'm assuming this may bring on some more interesting dynamics to the google voice / skype party.
- w1ntermute 15y agoDon't forget about the Android and iOS apps. No doubt those will be killed off as well.
- zbowling 15y agoNot so fast. Have you seen the Bing and Microsoft research apps? Bing also is being used on Chinese versions of the Dell Android phones instead of Google.
- mikecarlucci 15y agoInterestingly, if Microsoft does buy Skype and make it Windows only, they would be opening a huge door for GChat as [EDIT: the obvious] cross-platform client. FaceTime too, I guess, if Apple decides to move in that direction. If Skype isn't the default, verbed, system, doesn't it lose some value?
- windsurfer 15y agoGChat is already totally cross platform since it's just XMPP. There are tons of clients out there. You can run your own jabber server and connect to @gmail.com addresses, even.
- Sidnicious 15y agoOn that node, didn’t Apple say, via Steve Jobs at the presentation where it was announced, that FaceTime was to become an open standard? What ever happened to that?
- jpwagner 15y agojust remember that skype's product was already starting to suck before microsoft bought them...
- dstein 15y agoInteresting to note that the market cap of Vonage is only 1.04B. They might have been able to buy up every single other VOIP company on the planet with the remaining $6 Billion.
- Steko 15y agoI'm sure integrating a truckload of companies all with wildly incompatible systems and personnel would work out more horribly then we could possibly imagine.
- teyc 15y agoThere is always a persistent threat of Apple bringing Facetime to the PC desktop so that people on iPhones could call people with PC. By purchasing Skype, MS could bring Skype to WP7 and offer it preloaded. There used to be a time when MS could get traction simply by bundling their product everywhere. A competitor like Skype would be abandoned simply because they couldn't outspend MS. Imagine, $7b is a lot of money. You can give away $1b of free calls to get Live Messenger kick started, or run Lync for free. MS has lost that swagger that used to create their own reality.
- daimyoyo 15y agoThat's already happened. When Apple introduced Lion, one of the things they mentioned was they'd ported FaceTime to the Mac. You get it preloaded with a new Mac, or it's $0.99 in the Mac app store.
- lurker19 15y agoMac is not a PC. Apple will hesitate a long while before bringing Facetime to the PC, because Facetime promotes all-important lock-in to the Apple ecosystem and sells Apple hardware.
- raganwald 15y agoI will bet a bottle of single malt that Apple will bring FaceTime to the PC. I agree that FaceTime sells Apple hardware, but I think the hardware they want to sell is the iOS product line. Weigh how many Mac sales the will lose if people can get FaceTime on a PC against how many iPhone and iPad sales they will make to people who can now chat with Grandma on her PC? Ubiquity on the desktop and exclusivity on the mobile device are wins for FaceTime just as they are wins for iTunes.
- teyc 15y agoExactly, especially if the PC Facetime is crippled so that it can only chat to iOS devices.
- stevenj 15y agoThe headline on the article's page says "nearly $8 billion".
- pjy04 15y agoSkype is losing tons of money and needed to get out with whatever users it had. Microsoft can then sync this up with their own communication clients for a joint play.
- jmjerlecki 15y agoMicrosoft finally gets back in the game? I'm as big a fan of Google as anyone, but it's nice to see Microsoft win one.
- ChrisNorstrom 15y agoGoodbye "Skype®", hello "Microsoft Windows Live Connect for Windows Live®"
- boyter 15y agoI doubt it. I would hazard a guess that a this is a mindshare acquisition not technology. It might be branded as "Microsoft Skype" but to drop the name Skype would be a seriously stupid move, and Microsoft is anything but stupid. Bureaucratic yes, but not stupid.
- ChrisArchitect 15y agoThey'll keep it for sure, maybe just sneak an MS logo in there. It's one of those brands that's achieved 'verb' status for god sakes.
- savrajsingh 15y agoFoldershare was a good name. What happened to that? :)
- pedalpete 15y agoYup, it became 'Microsoft live sync', oh... what does that do? Lets you share your folders!
- r00fus 15y agoA bit hyperbolic, but amusing. Why doesn't Microsoft adopt meaningful brands that aren't 4 words long (Microsoft Windows for Workgroups) or vapid and diluted (ie, live)?
- smackfu 15y agoBecause it's so hard to come up with distinct unused names that work worldwide. Look at Apple, they aren't really any better (Thunderbolt, Air, Apple TV).
- trout 15y agoMicrosoft owns the desktop - that's their cash cow. For large businesses they (basically) have to buy outlook / exchange. They throw powerpoint, visio, word, excel on top of that, plus the operating system, and they own it. From an operating system standpoint, there's not any real threat. From a productivity suites perspective, there's a bit more threat from cloud, but it's still comparatively small. Same can be said for email - gmail is a much larger threat but for corporate security, calendaring, integration, it's still not really there. This will probably be different in 5 years as the proprietary protocols and integrations move towards open standards. I find it ridiculous that I can't find another desktop email client that will natively work with exchange/MAPI, and Microsoft knows it. Skype is just extending it to the desktop, and it's a strong part of the desktop suite. I think they want to play in the enterprise space, because nobody wants to use Lync for anything other than IM (aforementioned turd comment here).
- bane 15y agoI find it ridiculous that I can't find another desktop email client that will natively work with exchange/MAPI, and Microsoft knows it. http://projects.gnome.org/evolution/ http://projects.gnome.org/evolution/
- imrehg 15y agoThat goes through: bye-bye Skype. It was ~okay to know you.
- hanszeir 15y agoI hope Microsoft Skype does not require a hotmail account. This is good opportunity for Skype's competitors such as FaceTime to grow.
- TeHCrAzY 15y agoFor a long, long time now, MS services (not directly tied to Hotmail itself) have required a Live account only, which can be created with any email address.
- daimyoyo 15y agoI have a feeling that Microsoft was suckered on this one. Google and Facebook probably had no interest in skype, but bid it up so Microsoft would have to pay more. You'd think after all these years, and having this same thing happen time after time that they'd know that trick and see it coming. Guess not.
- lotusleaf1987 15y agoI think Skype would have been more valuable to Google, than to Microsoft--imagine having a free Google Voice number linked to your Skype ID. I think Microsoft was willing to pay a $1-2 Billion premium to keep it from Google and maybe a bit more to be able to use it as a bargaining chip with Facebook in their (MSFT and Facebook) pseudo-alliance.
- neworbit 15y agoMS would do a lot better to buy 200 promising startups (especially in the mobile space)
- firebones 15y agoI get the sentiment, but do you really think a) that there are 200 worthwhile startups in the mobile space, or b) that there are 200 promising startups that you could acquire for an average of $350 million each that would have anywhere near the chance of establishing a network effect as big as Skype's in any kind of reasonable internet timeframe (say, in the next 5 years)?
- johns 15y ago35 million each, not 350
- firebones 15y agoAckppttthtt, my fail. Still not a lot of $35 million exits, but significantly more of those than $350 million. The point still holds though--not sure there are 200 of those $35 million exits either. (Isn't that still almost twice the size of a CDBaby exit?)
- neworbit 15y agoYeah but come on, CD Baby is a warehousing and fulfillment company with a niche market that basically gets paid by starry-eyed musicians to let CDs gather dust and paid again to encode their music and send it to iTunes. Some small fraction of the bands actually sold enough to restock inventory. That's not a recipe for high margin success.
- neworbit 15y agoa) Probably, though I bet I don't know most of them. If I were MS M&A I would bet disproportionately on mobile, though, because that's an area they need to nail if they want to stay relevant. If they could get 70 out of 200, that'd be a darn good start. b) Individually, not terribly likely. Collectively? Sure. (And it's $35M each, but the exact number isn't the point - let's say you could offer every ycombinator and techstars startup an average of $35M each, you'd likely end up getting two or three Dropbox-esque gamechangers, a few dozen decent products, and 150 otherwise good ideas folded into MS and dead-ended.)
- brisance 15y agoI fail to see how this is a wise business decision. Skype has been losing money for a long time, and with cheap/free competition like Google video chat and FaceTime etc, why would MSFT invest in this?
- lotusleaf1987 15y agoI think you answered your own question: to compete with FaceTime and Google Voice. I think they're afraid to sit this race out the way they did mobile and get left behind again.
- brisance 15y agoIs their own videoconferencing solution that broken to begin with? Seven billion is a big chunk of change. And tech M&As typically do not end well.
- aneth 15y agoIf Microsoft somehow owned both of those services, would it affect Microsoft's prospects? Certainly not. FaceTime is a gimmick that few people actually use use. Google Voice is bridge between soon-to-be legacy voicemail and cellphones and the future, which is unlikely to be owned by either Google or Microsoft. Neither business would help Microsoft grow again, and neither will Skype.
- guywithabike 15y agoFaceTime is a gimmick that few people actually use use. Do you have any data to support this assertion?
- brettnak 15y agoMy friend who lives far away has an iPhone. I have a mac, we use it all the time. I actually hate using Skype because some clown has my username. We use Skype at work, but I never get entrenched in a service if I don't get my username. Just a singular of data for you.
- ChrisArchitect 15y agoif MS absorbs the Skype technology into their own IM/chat/communications systems - and skype users are left out on a limb - where do they go?. They stay with the MS product line happily perhaps, or they go to __________? gChat/open/xmpp? Jump all the way to Apple FaceTime (seems a far jump). Or with forthcoming p2p flash video ease-of-dev/ease-of-use, does this all just become super common/easy to access?
- joshaidan 15y agoI guess this is good for the Canadian Pension Plan. :)
- joshaidan 15y agoI think it was about a 363% ROI on their $300 million dollar investment.
- keyle 15y agoWindows 8's FaceTime brewing!
- jaffoneh 15y agoIt seems the number might actually be $8.5 billion: http://kara.allthingsd.com/20110509/microsoft-will-announce-acquistion-of-skype-tomorrow-morning/ http://kara.allthingsd.com/20110509/microsoft-will-announce-...
- carbocation 15y agoNYT's DealBook is concurring: http://dealbook.nytimes.com/2011/05/09/microsoft-in-talks-to-acquire-skype-for-8-5-billion/ http://dealbook.nytimes.com/2011/05/09/microsoft-in-talks-to...
- Rariel 15y agoThe only way I can think of for them to really, really make this worth it beyond just owning the service is to integrate it in to Outlook like gmail video/voice chat. Although worker bees would hate it, it would be cool as a supervisor to be able to "call" your employee from a program you already have open all day anyways. Or even co-workers working on a project too lazy to get up or lawyers who need to talk about something but don't really have time to stop what they're doing. They could implement a feature enabling you to "add" friends who use outlook to your chat/buddy list. I don't think it would kill off gmail, but it would make some people much less likely to try it. On a more personal note, I really hope they don't take away all those cool chat thingys (refuse to call them emoticons). That dancing guy and disappearing pizza get me every time.
- kooshball 15y agoYou can already do this in lync http://lync.microsoft.com/en-us/Product/Workloads/Pages/conferencing-software.aspx http://lync.microsoft.com/en-us/Product/Workloads/Pages/conf...
- goombastic 15y agoskype on nokias would be nice.
- matt4711 15y agoI can use skype on my nokia e63. It's even free to make and receive calls to/from skype contact through some landline gateway provided by my carrier. chat works too but the interface is not that great.
- rglover 15y agoI have no real qualms with a Microsoft buy-out, but I was really hoping for Facebook to get on this one. However, this sort of leads me to believe FB is working on something they may consider "better." Let's just hope the MS crew does something intelligent with this move and we don't have another Delicious-style implosion.
- geoffreyvanwyk 15y agoWhy does Microsoft feel the need to buy other companies? Why do they not just build their own Skype version if they like it so much? How many people are going to lose their jobs now? Why do they employ all the brilliant young programmers if they are just going to buy up companies and not create new products?
- netcan 15y agoFirst, this is something that works now. More importantly, this is a textbook network effect market. Skype users are what makes Skype work. If MS announced they building their own, what odds would you offer me to bet I use it to talk to my Mother on it within 2 years?
- jsz0 15y agoThis is Microsoft's ICQ moment. Overpaying for a company at the moment when its core competency is becoming a commodity. Does anyone have the slightest bit of loyalty to Skype? Of course not. They're going to use whichever video chat comes built into their SmartPhone, tablet, computer, etc. They're going to use FaceBook's eventual video chat service or something Google offers. No one is going to actively seek out Skype when so many alternatives exist and are deeply integrated into the products/services they already use. Certainly no one is going to buy a Microsoft product simply because it has Skype integration. Who cares if it's FaceTime, FaceBook Video Chat, Google Video Chat? It's all the same to the user. With $7B they should have just given away about 15 million Windows Mobile phones in the form of an epic PR stunt. It's not a bad product -- they just need to make people realize it exists. If they want to flush money down the toilet they might as well engage users in the process right?
- jcampbell1 15y ago> This is Microsoft's ICQ moment Is that a reference to ICQ's "Uh-oh"? If so, I fully agree. If Apple stock is priced to perfection, MSFT is priced to stupidity. This kind of wasted earnings is exactly why Microsoft stock sells at a mere 10x earnings. Investors are fully aware that a large portion of all future earnings will be wasted.
- d_r 15y agoI think this is a reference to AOL buying ICQ.
- jcampbell1 15y agoI don't understand. AOL bought ICQ for 400M, got patent exclusivity to IM for some time, sold a bazillion ad dollars during the dotcom boom through the ICQ client, and then sold the company recently for 200M. I am sure AOL came out ahead on that deal. What is an ICQ moment?
- jeza 15y ago
- korch 15y agoTo paraphrase an old anecdote, No software company ever went broke flipping Skype. I do hope Microsoft flubs up like Ebay did, and purchases Skype, but make the same IP mistake and neglect to license the core software that runs Skype. Anyone recall the old news about the Skype founders selling Skype to Ebay, but retaining the licensing of the core software, then pulling the plug on the license years later, and regaining control over Skype? I'm looking forward to 2014 when Microsoft has to pass the football again, though hopefully this story will get more interesting next time.
- zmmmmm 15y agoHopefully this forces Google to drop the "play nice" attitude with carriers & Skype and properly integrate video chat into Android across the board (yes, it's in 2.3.4, but it annoys me that Google left it this long and even then made it tied to a release that many phones will not get for ages if ever).
- drallison 15y agoAs I commented in one of the other postings for this event: "There goes the neighborhood....". Skype is/was one of the most significant products of the last decade or two. one I use and depend upon every day. I doubt that Microsoft will be able to avoid killing the goose that laid the golden egg.
- darwinGod 15y agoSo,I will have to create a live id to use skype ? :-/
- rbot 15y agoThink J Allard's meeting at Skype in January has anything to do with this?
- nl 15y agoI wonder who leaked this? Was it someone from Skype (or their VCs) trying to start a bidding war? Or someone from Microsoft trying to kill the deal (or get Google to overpay)?
- braindead_in 15y agoWill be interesting to see what happens to the Skype API. It's used by a lot of 3rd party plugins and is quite comprehensive. Hopefully they will not kill it.
- MichaelApproved 15y agoI hope the IP is actually included this time.
- RuadhanMc 15y agoWasn't part of the problem for eBay that they did not actually own the core p2p technology that Skype used and instead licensed it from the former owners? Has Microsoft purchased that as well or are they just going to write their own? In which case quality will change...
- sunstone 15y agoYes I'm wondering about that too. Apparently eBay didn't even know that they didn't own the underlying part until they went to sell it :P Bet somebody go their knuckles rapped for that.
- deleted 15y ago[deleted]
- drink 15y agoStrange realization: I am relieved that Microsoft bought this, and not Facebook. Can't remember the last time I was relieved that Microsoft bought a company.
- mojuba 15y agoThat's really strange. Not being a fan of either, I'd bet Facebook knows a bit more about Internet than Microsoft. Though in the end both are just money making machines with unethical practices. In either case you can expect Skype to become less geek-friendly and more like a surprise box with an evil clown inside.
- lupatus 15y agoGiven Microsoft's investment in Facebook in 2007 (http://www.nytimes.com/2007/10/25/technology/25facebook.html http://www.nytimes.com/2007/10/25/technology/25facebook.html), can we expect a Skype for Facebook or some other sort of integration?
- hessenwolf 15y ago"Goldman Sachs Group Inc. and J.P.Morgan Chase & Co. advised Skype on the deal, according to people familiar with the matter. Microsoft is not using any financial advisers for the deal, the people added." I see. That makes the 8.5 billion (price + debt) make more sense.
- smackfu 15y agoFunny, but financial advisors on acquisitions are just people who want a few percent for doing nothing.
- hessenwolf 15y agoHmmm... I would definitely be happy to pay somebody a few bucks to perform a reasonable independent valuation. I mean, seriously, whats 500K compared to 8.5 billion?
- smackfu 15y agoThe counterpoint is basically, did you see what happened with the global financial crisis and valuations?
- hessenwolf 15y agoTrue that those working in the rating agencies should be ked in the eyesocket with rusty screwdrivers... I see. Yes. An independent valuation would be nice, if you could trust someone to have the competence and integrity to do it.
- horatiumocian 15y agoI think that Microsoft buying Skype makes more sense than Google or Facebook buying Skype. First, the way for Skype to make decent revenues is to go for the enterprise market, which brings them paying customers. It would be really hard to convert end users to paying customers, because of all the competition out there (Google Voice). So, they need to cater to enterprise customers. And Microsoft is huge on the enterprise, they would be able to integrate it into their suites, and make it a multi-billion dollar product in a few years. I don't see any reason for Facebook buying Skype (different technology, different culture, price too high). Also I don't see any reason for Google to buy it other than to kill it and fold it into Google Voice (possible anti-trust issues?). So, even if the Microsoft-Skype deal isn't a match made in heaven, it still makes much more sense than Facebook-Skype, or Google-Skype.
- justincormack 15y agoSkype's (technical) HQ is in Talinn just across the water from Nokia, Microsoft's other new "acquisition"... useful for their mobile strategy perhaps? But Skype's infrastructure is all Linux + Postgres (they are a huge Postgres user), so maybe they will be forced to rewrite it all on SQL server for the next few years.
- bergie 15y agoIf I remember correctly, Hotmail for still running on BSD many years after the MS acquisition
- nikcub 15y agoAs many users as Facebook, many of those users have entered their payment details, a great brand that is just as big as Facebook, and synonymous around the world with communication. I just happen to be talking to a non-tech computer user on the weekend who told me that he and his entire family and friends overseas do not use Facebook because Skype does everything they need in terms of staying in touch and it has worked for them for years. They should start over with the software and spin it into a web and mobile service. It is a great platform to take on Facebook with - a much simpler service for basic video or text chat, and add in some photo sharing, email, etc. Google really missed out on an opportunity here - I bet that whatever they end up producing internally will not be merely as good or as popular as a new Skype run by Microsoft. In terms of the price, it would almost be a worthwhile purchase with just the users and brand - the near-billion in revenue is just a bonus. Skype has near $1B in revenue, and most of the expenditure is related to writing down and amortizing assets as part of the acquisition (something that most PE groups do when they takeover a company - part of what makes some of these deals profitable and worthwhile). Number of Skype users and revenue is growing remarkably. If you look at the published financials[1], $97M was written off as cost of acquisition, another $250M was amortization of assets that were written down at acquisition. Their 'real' costs are $131M in marketing, $72M in development and $104M in administration - which brings gross profit closer to $500M+ for YE 2011. PE of 17-20 is a bargain, especially considering that Microsoft can significantly reduce expenditures by integrating the company into the web group. I think this is a great deal, very different to ICQ (the immediate parallel that everybody is drawing) and much closer potential to the eBay PayPal deal. If done right, this could work out as well for Microsoft financially as PayPal did for eBay (remember PayPal wasn't doing so well financially at the time [2] - everybody called that deal crazy at the time as well) - add to that the potential of Microsoft taking on Facebook in the 'online communication for ordinary folk' sector - and it is a great, [1] http://www.sec.gov/Archives/edgar/data/1498209/000119312511056174/ds1a.htm http://www.sec.gov/Archives/edgar/data/1498209/0001193125110... [2] http://www.ygoodman.com/ppipo.html http://www.ygoodman.com/ppipo.html
- brudgers 15y ago>"As many users as Facebook" I suspect that there is a closer correlation to one account = one person with Skype than Facebook since there is little social incentive to create multiple Skype accounts. In addition, the strength of relationships between Skype customers is more easily determined. Finally, Skype has the potential to scale well into MicroSoft's core B2B business model.
- beedogs 15y agoSay goodbye to the Skype Linux client...
- gregzav 15y agoSelling my Microsoft shares... Bought them a year ago thinking they could at least make one step in the right direction.
- kmfrk 15y ago$7B is a lot of money, but might be more relevant is how much Facebook were thinking about paying for the company. Maybe it was not just an acquisition, but a strategic overbid.
- kayoone 15y agoThey will use Skype like Apple uses Facetime. Get it natively into every Windows PC, Windows Smartphone and Tablet and let people (video)call each other easily. With the userbase MS has, this doesnt seem like a bad idea. Imagine Scheduling Meetings in Outlook with automatic Video calls to everyone involved. Could be huge in the b2b market
- portman 15y agoAnd here's the press release, confirming the $8.5B pricetag. http://www.microsoft.com/Presspass/press/2011/may11/05-10CorpNewsPR.mspx http://www.microsoft.com/Presspass/press/2011/may11/05-10Cor...
- freechoice1 15y agoRecently when I started to outsource work I noticed everyone had Skype and wanted to use Skype. Skype is the no1 general platform for reliable business communications today. I got amazed myself how many actually use Skype in this sector. Skype is the new msn for voice chat and has been for quite a while. One of the reasons Skype is so attractive for businesses is the encryption methods it uses. I know the governments are annoyed by Skypes encryption due to they cannot listen and spy on those talking there.
- technomancy 15y ago> I know the governments are annoyed by Skypes encryption due to they cannot listen and spy on those talking there. Which governments? I've heard that the US and China have the keys.
- zipdog 15y agoYeah, I vaguely recall Skype doing something in around 2008 that gave US govt some level of access. (No citation)
- aneth 15y agoThe most valuable asset of Skype is not the technology, but the social network and user base. That however is not all that valuable since, unlike Facebook, Skype is mostly a 1:1 communications model easily moved to another network. When people want to communicate, they will use whatever is easiest. Skype has minimal and diminishing revenue potential, adds nothing to MS core products, and the social network is not all that sticky. It's a dumb buy by a dumb company. I haven't heard a positive word said about Microsoft product management by an employee in 3 years of time spent in Seattle.
- mmcconnell1618 15y agoWhat does Skype's patent portfolio look like? Could this be a way for Microsoft to shutdown other video chat services or at least extract a hefty license fee?
- repoleved 15y agoThis marks the death of Skype on the Mac.
- webXL 15y agoHogwash. Oprah won't allow that.
- tsewlliw 15y agoI always thought Skype and LinkedIn would be a really great match. But maybe this is an artifact of being introduced to both at the same time by the same person.
- erikpukinskis 15y agoThat means ebay is up $1.4 billion on the fiasco: -$2.6b purchase + 70% of $2.75b on sale + 30% of $7b on Microsoft sale = $1.4b Not sure if they got any cash from profits, and they probably spent a bunch of money on the purchases/sales and subsequent culture integration stuff.