Will Microsoft Spoil the Skype Home User Experience?

Microsoft and SkypeSo what will Microsoft do with Skype now that they’ve paid a staggering $8.5 billion for the Internet-based communications company? Are you worried that your free video conferencing service will die at the hands of Bill Gates’ former empire?

The Internet is rife with our patents and rumors regarding what Microsoft plans to do with Skype. For example, tech commentator Robert Cringely is depressed that the Microsoft bought Skype because he feels that Skype will die with its new Redmond overlords.

Some wonder if Microsoft didn’t actually buy Skype so that Google wouldn’t get their hands on it themselves, but that’s probably not true as Google has its Google Voice service and has already long ventured into voice and video chat within Gmail for example. What’s probably more accurate is that this is Microsoft’s reckless swipe at grabbing a piece of valuable Internet market that they’ve been unable to achieve themselves with their own products.

I definitely expect Skype to show up in many of Microsoft’s existing products. For example imagine Xbox, Office, Windows Mobile, etc. with Skype’s capabilities. In particular Microsoft is probably going to go after the enterprise market and convince CIOs that despite its price tag, Office will be a step ahead of the competition with built in video-conferencing. Now that’s a more significant shot across the bow of Google Apps and its cheaper price tag.

Regarding the price tag, Microsoft probably overpaid, although not from their perspective. For a company that has over $45 billion in the bank, $8 billion is hardly damaging considering the potential upside in winning over hundreds of millions of users. But given Skype’s last valuation of around $2.75 billion when eBay sold them, even assuming they grew by twice as much since, $8.5B seems a bit much.

EBay who was ridiculed for first buying and then selling Skype at (seemingly) a loss is now laughing all the way to the bank because even after they had spun Skype out, they had retained a 30% ownership, and 30% of $8.5 billion is in the same ballpark as what they paid for Skype in the first place. So if anyone is a winner, it had to be eBay.

In short, I hardly expect Microsoft to spoil the free consumer experience anytime soon, as surely by now they would know what the backlash might be if they did. Surely. We hope.

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