Microsoft to pay a lot of money for Skype? – back to dot com bubble days?

Rumours abound this morning on the Twittersphere that Microsoft is about to announce the acquisition of Skype for $8.5Bn. That’s 10x 2010 revenues, a year in which Skype reported a loss of $7m! That loss itself was a dramatic reduction on the previous year but Microsoft is still betting on big growth ahead.

This is all very good news for entrepreneurs who invested in private communications companies way back in 2003/2004 and whose businesses are actually profitable :).

I’m not sure however how the Skype brand fits with Microsoft. Skype is associated with free or very cheap. Microsoft is expensive although not as expensive as Apple. Microsoft is desperate to improve its web offering which Skype does for it.

Skype has a big overlap with MSN. Is this a problem? Do people still use MSN? Skype also overlaps with Lync. How will that fit? Lync for medium and large enterprise, Skype for small? Or will they just run Skype as a separate entity in which case where will the leverage come from? Note that only 2% of search engine traffic to this blog is from Bing!

I don’t have the answers. Also I’m sure there are many more questions than this. What I can say is that life is far from boring when it comes to the internet and the world wide web. More, I’m sure, in due course.

PS I don’t normally indulge in rumour mongering but this seems likely to break today and I will be out and about and not in a position to post to the blog. So I’m getting in early!

Published by Trefor Davies

Liver of life, father of four, CTO of trefor.net, writer, poet, philosopherontap.com

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4 Comments

  1. I couldn’t help but think of what this might do to the Net Neutrality debate as well. Skype has a hard enough time as it is making a profit but with Microsoft behind it the approach from bigger ISPs and mobile operators may need to be adjusted. I guess that all depends upon what MS does with the firm, about the only thing they can’t do is put the prices up because Skype has a hard enough time staying level with the competition as it is.

  2. Weren’t Apple supposing to be open-sourcing Facetime or at least putting it up to a standards body? Whether FT would then gain any traction be becoming cross-platform is debatable, but the idea seems to have died.

  3. I’m surprised that you even get 2% traffic from Bing… it’s so horribly broken. I tried it once and gave up, and I only tried because Multimap used to be my staple diet for mapping – not any more, Microsoft ruined it.

    But at least there are a few alternatives for decent vector OS local maps – tip: try using the local authority Planning site for the area you want to see (Scotland), or in England, use http://magic.defra.gov.uk/ – it’s free, and you don’t need to use Internet Exploder… 🙂

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