I didn't buy a Centrino willingly, I worked on the P4 - Bob Colwell, former chief architect, Intel
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Microsoft's $8.5bn payout for Skype hints at mobile desperation
FLASHING THE CASH to purchase Skype hasn't helped Microsoft dispel doubts about its long-term mobile and messaging strategy.
Microsoft's elite probably thought that its decision to splash out £5.2bn for Skype would be welcomed by the industry as a sign of bold action in the mobile market. After all Skype is still the most recognisable brand in voice over IP (VoIP) communications and Facebook has been posturing towards launching its own VoIP services, just as we predicted last year. So why did Microsoft's share price fall on the announcement?
Make no mistake, Microsoft's decision to buy Skype is a good deal, but only from the point of view of Skype's investors. The perceived view is that $8.5bn is too much for a company that barely turns a profit, and was palmed off by Ebay at a cut down price barely a few years ago.
Commentators that have come to the support of Microsoft seem to paint a picture of a deal that is one-sided. Forbes sought to prop up Microsoft's case for buying Skype by saying that Skype's investors preferred being bought out rather than going to an initial public offering (IPO).
For months rumours had been swirling that Skype was preparing for an IPO. It started by limiting third party access to its overlay, a move that was widely seen as safeguarding any sources of revenue from its subscribers. However the $8.5bn question is that even with millions of users, just how many people pay to use Skype? Not many, and any apprehension on Skype's part to go to an IPO was largely due to that question.
In its most recent quarter Skype generated profits of just $7.6m, and even though it is 2011, people still remember dotcom bubble valuations all too well. Forbes even applauds Skype's bankers and lawyers for getting such a high sale price, saying, "Credit Skype's bankers for then getting Microsoft into the mix and trumping both Google and Facebook for the $8.5bn deal."
One of the golden rules of negotiation is that all parties should reach a common ground that doesn't seem to favour one party over all others. It is clear as day that Skype not only avoided having to go down the tricky IPO route but managed to sell itself to Microsoft, a firm desperate to get a foothold in two major markets, messaging and mobile. µ
Tags: Microsoft
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"some time in 2012 Microsoft will start saying CHECK. By the end of 2012 or 2013 Checkmate."
That's an interesting one, but how? To say is one thing, but to actually do it...
Will you elaborate on that? Just give us the 5 first moves ahead.
I wonder if MS actually had stock in the investment company that owned skype, if they they did in a big way then this whole thing could be some business trick to wash some funds somehow.
In the way steve jobs sold disney to himself or CEO's that own companies pay themselves $1 in wages, all smoke and mirrors.
Example: Let's say MS had a huge share in that investment company, now they are up 8.5 billion, and that can be invested in things without getting flagged as monopolistic and without sticking out the same way, maybe specifically in an attempt to buy something from a foreign country.
This might sound farfetched but both apple and google did manage to hide money in subsidiaries and then buy companies or file patents through that without the press/public noticing they did.
Mitchell:
With the legacy of "the zune", "the Kin", "plays for sure", and so on behind it, the only one Microsoft is likely to "checkmate" is its own bloated, proprietary self. So it may be high time for you to find yourself another employer.
I HAVE A COUPLE BUCKS OF SKYPE CREDIT, IT'S BEEN HANGING AROUND A LONG TIME BECAUSE THE SERVICE IS PRETTY BAD AND SO I PRETTY MUCH NEVER USE IT. VIDEO CHATTING IS A FLAKY GIMMICK. KINECT ITSELF IS "OKAY" BUT PROBLEMATIC, PRONE TO GLITCHINESS, DOESN'T WORK WELL IN LOW-LIGHT, A LOT LIKE SKYPE ACTUALLY.
THE EXECUTIVE MANAGEMENT TEAM MIGHT WAKE UP TO REALITY ONE DAY, BECAUSE THESE INTERNET BRANDS ARE MUCH MORE FLIGHTY THAN THEY REALIZE. WHO HEARS OF NAPSTER ANYMORE? I HAVEN'T ACCESSED THAT SITE SINCE IT GOT TAKEN DOWN AND GAVE UP PIRACY, WHEN IT BECAME A MICROSOFT BRAND IT WAS KILLED! ANOTHER GOOD ONE IS THE VALUATION APPLIED TO Y2K.COM WHAT THE HELL USELESS SITE IS THAT, YET THEY THOUGHT IT WAS WORTH TENS OF THOUSANDS OF DOLLARS BASED ON PAST TRAFFIC.
GRANTED BOTH THOSE SITES HAD A LIMITED POTENTIAL LIFE SPAN, BUT ALL THESE INTERNET STARS LIKE AMAZON,EBAY,GOOGLE,FACEBOOK,SKYPE, ETC WILL ONE DAY FACE COMPETITION THAT WILL RENDER THEM OUT OF DATE, OUT OF FASHION, INTO THE DUSTBIN.
(NOT TODAY BUT SOME DAY)
You can use Google Talk for video call, chat, free US calling, messenger, far far more useful than skype. Just take a look in new Android 2.3.4 :)
Skype does overlap alot with Lync and Messenger. It's also popular. I don't think it's worth 8.5 but microsoft really needs killer apps and it beats letting the competition get it.
I think the title and constant bashing of Microsoft hints at the INQUIRER's desperation. I'll take the troll bait.
You ever play chess? - You have to think 10 moves out to be a great chess player if you think one move ahead you will lose and sometimes you need to sacrifice a piece to get what you need.
Skype is a Captive market audience and base Im not even sure they have a competitor.
So Microsoft gets exclusive with the largest mobile carrier Nokia and then they outright own Skype the largest IP based calling network. They tie it in with Mobile 7, Windows, Lync, and now have access to iPhone and Android users information as well. Before you know it Microsoft will be saying checkmate and rightfully so when the Mango update comes out Windows Mobile will do more than the iPhone and Androids and some time in 2012 Microsoft will start saying CHECK. By the end of 2012 or 2013 Checkmate.