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Thursday, May 12, 2011

Skype-Ballmer Part I: what Microsoft needs?

The reporting on the $8,500,000,000 (seriously!?) acquisition of Skype by MSN has been subjected to generally very superficial reporting, but dig down and there are about three good defensive reasons for it:
[1] Copycatting: MSN gets to ape Apple's Facetime and Google Talk on its Win7 platform;
[2] Chargeable customers: MSN needed to have us (you and I) ready for the next round in the net neutrality battle, in which Android has commoditised mobile devices and operators can screw OS providers - having a few million Skype customers (TechDirt estimated 1.7% paid out of 100m registered accounts in 2006 while Ars Technica reports 8m paid subscribers) at least gives MSN some arm wrestling with mobile networks - and might prevent Android's creep into netbooks then laptops then desktops - squeezing Windows and Office.
[3] It's about IP Multimedia Subsystem (IMS) - the standard for cash tills on the Internet that has been developed by mobiles since 2000 - and as they start charging by the bit, MSN can either join them with a full suite or cede exclusivity to some other integrated voice-IM-search client. That's the 'mobile rules' version of Option 1 above.
Of course, unless you believe Option 2, then Microsoft's own developers were rubbish and not worthy of Windows Messenger/Lync/Exchange - all of which outshine Skype at least in raw user numbers.
In any case, whether this makes sense only matters if you don't think Ballmer had to defend against Google, Apple and Facebook - he had the cash, so the price (I am worth $1000 in the acquisition apparently) is meaningless to Microsoft itself.

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