Tuesday, May 10, 2011

Microsoft and Skype

Big news for today's Technology Tuesday: Microsoft is buying Skype for $8.5 billion ($4.5 billion more than the closest other bid from Google, or so anonymous sources say). We're assured that this won't have too big of an effect on us as end users--that business as usual will continue for Skype, and that Microsoft is only really interested in taking advantage of the synergy for other Microsoft products that Skype's expertise in the internet conferencing market will bring.

Do I believe that?

Not entirely. Microsoft doesn't exactly have a clean track record when it comes to dealing with companies it purchases. Hotmail's a good example. I personally feel like Hotmail went downhill once Microsoft got hold of it. To me, every time a company is purchased, it takes a step away from what it originally was intended to do. Things that make a company successful are usually focused on the vision of the founders. Bring new owners in, and who knows what will happen?

In any case, it'll be interesting to see what happens with Skype and Microsoft products in the years to come. Ebay bought Skype for $2.6 billion in 2005, only to then sell it for $1.9 billion four years later. Has the value of Skype really gone from $1.9 billion to $8.5 billion in two years? That would really surprise me. I'd have to say Microsoft overpaid by a good $4 billion easy. But hey--it's their money.

To read more about the deal, check out CNN's coverage:


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