Daily Dose of iQ: Microsoft Acquires Skype for $8.5B

May 10, 2011 — Allan Pulga

Just when we thought Skype was on the verge of being bought out by Facebook and Google (see Reuters, last week), in comes today's biggest wireless headline: Microsoft is paying $8.56 billion to buy Skype, one of the world's most popular VoIP providers (it has 124 million active users worldwide).

“Skype may be most relevant to Microsoft’s mobile push,” wrote Peter Ferenczi of Mobiledia.com (May 10). “Windows Phone doesn’t have an Internet calling app, and VoIP is quickly becoming a key feature for smartphones, especially as better 4G connectivity makes both voice and video calls more practical.”

Ferenczi says this deal –- the biggest acquisition in Microsoft’s history -– could create a tight Skype integration to “help Windows Phone 7 gain momentum, after a lackluster debut.”

From the consumer standpoint, Adrian Covert of Gizmodo.com outlined (May 10) three practical outcomes from the deal:

  • Living Room Video Chat: “Combine your Skype Camera with the Kinect camera, and you a video chat experience that not only fits more casually into your life, but makes or lives even more Jetson's-like. Xbox, Skype and MSN contacts could be
  • Windows Live Messenger: “People outside the US have always gravitated towards MSN Messenger (now called Windows Live Messenger 2011 or something like that) for their conversational needs, and I've always wondered why, because that thing also completely sucks. And as it happens, Skype's design and UI is pretty great! If Microsoft had any sense, they'd totally blow up their messenger app—save for contacts—and splice Skype's DNA into the software.”
  • Google Voice Competitor: “Not only does (Windows Phone 7) lack great integrated messaging, but if I had a smartphone platform, I'd be trying to get my own seamless internet phone service together, just like Google and their awesome Voice service. Skype gives them a big push in the right direction. Imagine someone calling your phone, and having the option to have that call seamlessly pushed to your computer, tablet device, or Xbox. Awesome, right?”

The Skype acquisition comes a couple months after Microsoft announced it was teaming up with Nokia to produce better Windows Phone 7 smartphones (see Joining Forces).

Microsoft is making some big moves, which leads a number of analysts to make some lofty growth projections things for the coming years:

Topics: Wireless Trends, Mobile Industry

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