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Why Did Microsoft Buy Skype?

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Apparently Microsoft have paid 8.5 Billion for Skype. The question is why? They already have software available for for internet phoning, ok Skype has a huge user base, but surely they could have spend a fraction of that amount of cash to build up a user base for their own product.

Microsoft buy Skype

Maybe this is a desperate attempt to catch up with google, reminds me of when Rupert Murdoch bought myspace, and now its gone downhill.

Surely all it will take is an VOIP app that works well on Facebook(easier to use than, and more immediate than Skype) - and then skype goes downhill.

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Apparently Microsoft have paid 8.5 Billion for Skype. The question is why? They already have software available for for internet phoning, ok Skype has a huge user base, but surely they could have spend a fraction of that amount of cash to build up a user base for their own product.

Microsoft buy Skype

Maybe this is a desperate attempt to catch up with google, reminds me of when Rupert Murdoch bought myspace, and now its gone downhill.

Surely all it will take is an VOIP app that works well on Facebook(easier to use than, and more immediate than Skype) - and then skype goes downhill.

Many of the purchases on the internet are based not on the value or worth of the company but rather on the value the company attaches to that business not being owned by Facebook or Google.

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Equally if it goes into the OS as a feature pack that gets pretty massive worldwide penetration almost instantly, and as an MS distributed IE feature it is pretty awesome - that would go some way to bypassing the facebook problem - if they are there then presumably they can piggyback it.

Beefs up MS Live too quite a bit.

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Equally if it goes into the OS as a feature pack that gets pretty massive worldwide penetration almost instantly, and as an MS distributed IE feature it is pretty awesome - that would go some way to bypassing the facebook problem - if they are there then presumably they can piggyback it.

Beefs up MS Live too quite a bit.

Would the EU allow that? MIcrosoft got in a bit of hot water over bundling IE with their OS's..

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Many of the purchases on the internet are based not on the value or worth of the company but rather on the value the company attaches to that business not being owned by Facebook or Google.

That was mny first thought - stopping Google or FB buying it.

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Apparently Microsoft have paid 8.5 Billion for Skype. The question is why? They already have software available for for internet phoning, ok Skype has a huge user base, but surely they could have spend a fraction of that amount of cash to build up a user base for their own product.

Microsoft buy Skype

Maybe this is a desperate attempt to catch up with google, reminds me of when Rupert Murdoch bought myspace, and now its gone downhill.

Surely all it will take is an VOIP app that works well on Facebook(easier to use than, and more immediate than Skype) - and then skype goes downhill.

Building up a user base isn't that easy, as Microsoft have discovered with Bing.

The main reason people use Skype isn't because it is any better than other VOIP providers, it probably isn't. They use it because it is good enough and because everyone else uses it - the network effect. For Microsoft to overcome that, they would need to come up with something that is substantially better than Skype and has some unique killer feature that makes everyone want to move across. I can't think what that might be, and presumably they can't either.

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Probably also because the VoIP isn't that clear with the XBOX, maybe they'll want to use Skype for online gaming?

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Would the EU allow that? MIcrosoft got in a bit of hot water over bundling IE with their OS's..

No - but like the media player unbundling for EU os versions, it could just be a free feature pack at a guess.

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This looks like a cash bid. Presumably they have a massive cash pile, and it was burning a hole in their pockets?

Did Microsoft start paying dividends for the first time? (if not there would have been some pressure to return cash to shareholders).

I thought Skype was still an Ebay business but see it was spun off to PE guys. Remember Ebay!

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The bit that a lot of people seem to have missed is not so much MS buying Skype but that fact that VOIP is now consumer territory as opposed to geek territory. I would expect a big hot on the income streams of traditional mobile service providers in the not too distant future.

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The bit that a lot of people seem to have missed is not so much MS buying Skype but that fact that VOIP is now consumer territory as opposed to geek territory.

Agreed, and with that in mind I'd imagine Microsoft's thinking to be:

1. They're buying a brand with widespread recognition.

2. Skype has a large, established user base.

3. The potential to integrate it with Microsoft's existing products, e.g. Windows and Outlook/Exchange.

4. The convergence of VOIP and conventional telephony.

5. The potential of developing world markets where mobile phone networks and/or Internet infrastructure have shortcutted the development of a conventional phone network.

6. The potential to move Skype from a free-to-consumers model to a revenue earner in its own right, either through the purchase of MS software or micropayments for calls.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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