What could be the implications of Microsoft’s acquisition of Skype?


Well, initially there were rumors of Facebook’s CEO Mark Zuckerberg is in talk with Skype over it’s acquisition. Due to Skype’s recent integration of Facebook in it’s VoIP client was seen as a conformation of these rumors. Then there were news of even Google planning to acquire Skype and not to mention, Microsoft too was in the queue.

When the news of Microsoft acquiring Skype for a whopping $8.5 billion USD broke out today, it surprised many since Facebook and even Google (Remember Google Voice?) seem more organic partners for Skype than Microsoft. What makes it more interesting is that Skype, though an extremely popular service, is not yet making any profits. You may find it hard to believe but the company carries approximately $700 millions in debt.

So what do you think could have made Microsoft CEO Steve Ballmer make this highly expensive acquisition? Well, it’s probably too early to say anything however the most common opinion is that Microsoft could integrate Skype in Windows and probably in it’s Windows mobile OS. Does that mean it’s the end to Skype on Mac, iPhone/iPad, Android or other platforms? Probably not since it’ll be a too risky decision and will invite some real rough criticism for Microsoft which already has a nasty history of taking the ‘monopoly’ route.

It’s difficult to say how Microsoft plan to use Skype and how it’ll turn the loss making Skype into some serious revenue generating business. $8.5 billion USD is huge, huge, huge sum of money and personally I think it’s too big a risk for even a large organization like Microsoft to take. If this deal doesn’t work out then what? It certainly won’t affect Microsoft in general but it might certainly be the end of Steve Ballmer. However if you think a bit more, it may not look as bad. Tablets have already captured the market and are here to stay. Very soon, we’ll mostly be using mobile computers instead of regular ones. It makes perfect sense to have those mobile computers to have a VoIP client like Skype instead of using mobile carrier for making calls.

Mobile carriers usually do not like VoIP services since they offer free voice/data services and that’s why people love them. Since Microsoft has its own mobile OS which will mostly be the future OS of Nokia smart phones and integrating Skype into it may be a tricky issue since carriers may not like this and most likely Nokia too will not be happy with Microsoft’s move of acquiring Skype.

Well, a lot can be said however only time will tell whether it was a wise decision or a blunder. I wish Steve Ballmer all the very best though personally I am not a fan of him or even Microsoft. I said bye bye to Microsoft products long back and rely on open source 🙂

UPDATE: In a press conference, Microsoft official mentioned that they plan to integrate Skype in Outlook, Xbox, Windows mobile OS and some other products from Microsoft family. Outlook integration definitely sounds good but I guess providing built-in Skype in Windows mobile OS is the real thing due to the shift in momentum from computers to mobile computers.