4 ms·

Nothing else explains why Microsoft would pay US $8 Billion for Skype. Profit margins are either exactly zero or near-zero for every call; this is not 1995 when

Nothing else explains why Microsoft would pay US $8 Billion for Skype. Profit margins are either exactly zero or near-zero for every call; this is not 1995 when telco call termination was 20x more expensive. The simplest explanation is that reliable incumbent Microsoft was hired in some way to conveniently consolidate Skype. With as many channels through which Microsoft does business with the US government, favorable contract terms here and elsewhere could easily make the whole package worthwhile.

mtgx 13y ago
NSA was already ready to pay billions of dollars for a Skype eavesdropping solution [1]. One could wonder if that's one way Microsoft wanted to recover some of the cost of their investment, and why they were so willing to pay twice as much as Google wanted to pay. I mean what company outbids another by 2x/$4 billion for a company with not that much revenue and profit? [1] - http://www.theregister.co.uk/2009/02/12/nsa_offers_billions_for_skype_pwnage/ http://www.theregister.co.uk/2009/02/12/nsa_offers_billions_...
- pyre 13y ago
  | One could wonder if that's one way Microsoft | wanted to recover some of the cost of their | investment You could wonder, but it would seem difficult to hide $1 billion in revenue for a publicly traded company.
  - OldSchool 13y ago
    No need to hide anything. An extra billion or two per year going forward would provide a respectable ROI on $8 billion. Surely there are countless wholly open ways to accomplish that with a customer the size of the US gov't.
teamonkey 13y ago
> Nothing else explains why Microsoft would pay US $8 Billion for Skype. Really? Nothing else explains why Microsoft wanted to buy talented development staff and software that was becoming the defacto name brand for video communication in homes and businesses, and which was taking market share away from Microsoft's own suite of communications solutions?

mtgx 13y ago

NSA was already ready to pay billions of dollars for a Skype eavesdropping solution [1]. One could wonder if that's one way Microsoft wanted to recover some of the cost of their investment, and why they were so willing to pay twice as much as Google wanted to pay. I mean what company outbids another by 2x/$4 billion for a company with not that much revenue and profit? [1] - http://www.theregister.co.uk/2009/02/12/nsa_offers_billions_for_skype_pwnage/ http://www.theregister.co.uk/2009/02/12/nsa_offers_billions_...

pyre 13y ago
| One could wonder if that's one way Microsoft | wanted to recover some of the cost of their | investment You could wonder, but it would seem difficult to hide $1 billion in revenue for a publicly traded company.
- OldSchool 13y ago
  No need to hide anything. An extra billion or two per year going forward would provide a respectable ROI on $8 billion. Surely there are countless wholly open ways to accomplish that with a customer the size of the US gov't.

teamonkey 13y ago

> Nothing else explains why Microsoft would pay US $8 Billion for Skype. Really? Nothing else explains why Microsoft wanted to buy talented development staff and software that was becoming the defacto name brand for video communication in homes and businesses, and which was taking market share away from Microsoft's own suite of communications solutions?