5 ms·
"just for the sake of others not owning it." Perhaps this is why it's worth $8.5 billion to MSFT and not to others. It's pretty silly to say someone got a bad
by fleitz 16y ago
"just for the sake of others not owning it."
Perhaps this is why it's worth $8.5 billion to MSFT and not to others. It's pretty silly to say someone got a bad deal a week after they bought it. If Ballmer has some awesome plan for it that will require a year or two to implement it would behoove him to disclose this so that others could move competitively to destroy the value from such a purpose.
- jakarta 16y agoWhy's it silly? He's buying a commodity business (thats what VOIP is) for 32x earnings. There's a reason M&A is often referred to as a winner's curse -- because winning the bidding typically means overpaying. The synergies execs often talk about almost -always- fail to be realized. Shareholders of Microsoft would have been much better off if the company just bought back $8.5bn in stock. A dividend would have been out of the question due to tax repatriation issues.
- alecco 16y agoNot only a commodity business, a declining one. A specialized desktop application to chat. Hello, it's 2011, people do web-based peer-to-peer video chat for free. Just, ask the Chatroulette users. Free. I bet this will go down as one of the most stupid buyouts in history. http://en.wikipedia.org/wiki/Real_Time_Media_Flow_Protocol http://en.wikipedia.org/wiki/Real_Time_Media_Flow_Protocol
- reedlaw 16y agoSkype is free for video chat too. And I must say it's worth every penny for its phone line in service when compared to free offerings like Google Voice.
- ericd 16y agoHaving Windows users be able to call each other and every other Skype user right out of the box could be pretty interesting.
- sunir 16y agoSkype already has enough market share that bundling with Windows is not likely to generate enough growth to justify the purchase alone.
- qq66 16y agoWindows has ~4 times as many users as Skype.
- brown9-2 16y agoYou mean instead of those out-of-the-box Windows users having to just go to www.skype.com? It's pretty easy to install.
- evgen 16y agoThere is a significant difference between bringing in a new product and having that product be a part of the standard install on every laptop/desktop from the perspective of Enterprise IT.
- Sandman 16y agoYes, but wouldn't that get them in trouble because of the anti-monopoly laws? If I remember correctly, they got sued just for bundling IE with Windows, right?
- adsr 16y agoWindows users could do this already without Microsoft owning Skype. Users who aren't able to install Skype on their own, probably won't use it anyway.
- nandemo 16y agoDo you have a source for "32x earnings"? I suspect it's even worse than that. In other HN thread someone mentioned the price was about 300x earnings, and via google I could find this: Skype's revenues for the first six months of 2010 were $406 million, with a net income of only $13 million.
- adw 16y ago32x EBITDA (the net income is artifically low thanks to one-off writedowns).
- ryanlchan 16y agoI think Microsoft has a master plan. Skype and VoIP in general have all kinds of potential synergies with current MSFT products, difficult to materialize as they may be. Remember that they just put out an incredibly powerful 3D camera called the Kinect. With Skype on Xbox, we could see the beginnings of accessible 3D teleconferencing. Even if it's just Skype, its inclusion further cements Xbox's place in a living room by replacing another utility. Some analysts are forecasting for the telepresence market to grow at ~30% annually through to 2015, with a strong driver being enterprise clients. Why not bundle Skype into Office? Microsoft Communicator already does video chat, but only with other Exchange users. Expanding the install base by 124M users might be the kick in the pants teleconference needs. Whether or not these scenarios are achievable by MSFT is up for debate.
- sunchild 16y agoSkype on Xbox? 3D conferencing? Setting aside the horrendous culture on Xbox Live, does anybody want "3D conferencing"? Most people don't even use Skype for video conferencing today.
- zachrose 16y agoI could see how 3D avatar conferencing (like Xbox Live avatars) might actually be much more appealing than video conference.
- deleted 16y ago[deleted]