Steve Ballmer and Tony Bates announce Skype deal
Microsoft’s acquisition of Skype on Tuesday has raised many industry eyebrows, but how exactly does the company plan to silence its critics?
The purchase of Skype, valued at $8.5 billion, is Microsoft’s most expensive acquisition to date. Investors and critics immediately slammed the deal on Tuesday after many questioned whether Microsoft is paying too much. The software giant now needs to move quickly to integrate Skype across its range of products. The key is execution.
Microsoft CEO Steve Ballmer hinted at the company’s plans for Skype during a media briefing on Tuesday morning. “We’ll move beyond email and text to rich experiences in the future,” said Ballmer. Microsoft wants to extend the reach of Skype to the following:
- Xbox and Kinect
- Windows Phone
- Outlook
- Lync
- Xbox LIVE
- Messenger
- Hotmail
Ballmer reassured Skype users that Microsoft wants to “build and grow the Skype brand” and promised not to ditch alternative platforms. Ballmer highlighted the following slide to demonstrate how Skype fits into Microsoft’s existing products.
Microsoft Skype integration
It’s clear that Microsoft will integrate Skype in the main consumer parts of its offerings and could use it as a tool to entice small and medium businesses onto the company’s Lync platform. Microsoft’s execution is key on products like Kinect, Windows Phone, Outlook, Messenger and Hotmail. Apple and Google both have solid communications platforms that are expanding. Microsoft must provide a strong alternative to FaceTime through Skype and advertise it well. Equally, the company must also counter Google Voice. Google is rapidly building voice and video communications into its products and Microsoft can’t afford to take their time with any Skype plans.
Microsoft is understood to be preparing a revamped communications platform for Windows Phone 7.5. The company is integrating Windows Live Messenger directly into its next mobile operating system and is expected to unveil its plans at a media event on May 24. If Microsoft isn’t ready to detail its plans for Skype in Windows Phone 7.5 then it could fall behind in the ever important mobile space. The software giant must also consider pushing Skype usage within Messenger, Hotmail and Bing as a priority.
Microsoft’s Skype deal started with an unsolicited offer from Microsoft to Silver Lake in March. The price was finalised on April 18 and a final deal signed on May 9. The quick turnaround demonstrates that Microsoft wanted Skype at any cost. The cost is high but it may just pay off as long as the slow moving giant gets its skates on. Microsoft has got to hope that its very much the Tortoise that catches the Hare taping a nap, otherwise it’s $8.5 billion down the drain.