As most of you know by now the giant internet phone provider was bought by Microsoft for a stunning price of 8.5 billion in cash. This kind of money is so much that even Microsoft had to dig into it's off shore accounts to come up with the money. Is it a smart move? No one knows yet but we know why they did it. I can almost guarantee that every person reading this post has a Skype account, and with 600,000 new registration everyday it makes it one of the most popular downloaded program in the world. On the other had Microsoft had seen it's products and sites loose their popularity. Hotmail is not the number one email service anymore and who even looks at the msn page anymore? Even MSN is not as popular as it used to be.
So this expensive deal could be a good step since Microsoft owns a big part of Facebook as well and the both of them are working on incorporating Skype's real-time video communication into their existing product line, including office, Windows phone and the Xbox. This is the reason why they were willing to pay all this price for it and agreeing to take on all it's debts, which were estimated at 686 million in long term debt, and slightly more than 1 billion in liabilities.
Microsoft will start with five things they want to do with Skype. Mostly targeting the millions of people who don't use Skype but have Microsoft computers, phones and video game systems.
1- Integrate it to Xbox
Knowing that the Xbox 360 already has a chat function, plus 10 million Xbox Kinect systems were sold since it's release (the system comes with a webcam already) so there is at least 10 million people who can use Skype on the Xbox both for chatting and video chats. In addition to that Skype also has TV-compatible webcams and software, but was never a high profit feature. Microsoft thinks Skype on the Xbox can push both products forward.
2- Improve the windows phone
Let's face it, Windows phones aren't that popular, I don't know anyone who owns one. They couldn't compete with the iPhone nor Blackberry not even the Google phone. iPhones Facetime app, Google talk's and blackberry's BBM were too much for windows to compete with. But now they can, skype can do everything these phones do. Now of course Apple and Android products can already run skype so it's going to be interesting to see how Microsoft is going to deal with that. Maybe it will be a great help for Blackberry who can't have the Skype application since it's apps are controlled by the provider rather than the consumer. That's exactly why Windows is already in contact with Blackberry about this.
3- Office meeting video chat
Google and Cisco were two of the big companies interested in Skype. So the purchase was also a strategical one, to illuminate competition. Microsoft office 365 which will include an online-only option, is expected later this year, maybe this will be the first step Microsoft takes with it's new product.
4- Appear on Facebook
Microsoft actually owns a part of facebook since 2007 bought for 240 million dollars, and the social media giant's interest in skype seems a clear indication that Mark Zuckerberg and Co. would like to beef up facebook chat with a video option. Getting the product on Facebook means 600 million or so users will be accessible. It might mean a huge step for both Skype and Facebook.
5- Resuscitate hotmail
Hotmail saw it's peak about 10 years ago and ever since, it has been going downhill. It still has tons of users worldwide but no one is excited about it anymore. If Microsoft is about to integrate Skype quality video chat to hotmail, it might just get the attention of a lot of people.
Anyway Microsoft is a company I have great respect to and whether skype was a good or bad idea, I'm glad they are expanding in that direction. I just hope skype will remain free of charge.
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