Microsoft skype merger acquisition

Microsoft has a very centralized infrastructure, and [Skype] is a peer-to-peer communications system. There may be technology changes that have to be made. But in terms of preparation for the acquisition, they probably did a thorough job.

Knowledge Wharton: Part of the concern is that even with million customers a month using Skype, the company still loses money. Any thoughts on how Microsoft could tweak the business model to change that? Clemons: There are different ways of making money. Somebody might argue that Google has hundreds of millions of users, and not one of us pays anything to use Google. There must be something profoundly wrong with their business model.

So there are two possibilities. But there are three [possibilities]. One is to grow a profitable business with a platform-based strategy. The other is to make this bigger. A third is to hope to get lucky. My guess is, it was probably some combination of the first two.

Why do you think this deal is safe? This one seems aimed, perhaps, at keeping Microsoft alive. In other words, if you are truly a dominant platform in search and you begin to subsume channel distribution, sales and things that you can lock people out of due to your power in search, that scares me. This may be a very clever attempt at keeping Microsoft alive as a counterbalance to Google. If Google did it, this could be a way of squeezing out other players and eventually slaughtering them. How do you think this changes the competitive landscape for search and social networks?

If it did, it would change it in the following way. Mostly, right now, social networking is about broadcasting. But if somebody wishes me a happy birthday, all of my friends can see what everybody else had to say. Skype is much more focused. I have something I need to do. Two, three or four of us get together, and synchronously we videoconference. I show him a picture; he shows me his notes. Microsoft had been looking for a way to enter the mobile phone industry to better compete with Apple and Google.

Furthermore, both CEOs Ballmer and Elop acknowledged the acquisition as something that would build upon the existing Nokia-Microsoft partnership. In a press release in , Elop told reporters,. February marked the beginning of the newly formed Microsoft Mobile a subsidiary of Microsoft. Later, in October , Microsoft Mobile announced that Microsoft Lumia would replace the iconic Nokia on the smartphones.

Integrated multinational VoIP support would potentially be enormously disruptive to the cellphone market. However, as good as this might be to end-users, it would probably serve only to kill Windows Phone stone dead for carriers. As much as telephony integration into Microsoft's communications products and VoIP integration into its telephony product makes sense, it's hard to make sense of the deal. The purchase price is a phenomenal amount of money to spend on a company that has long struggled for profitability, and it's hard to believe that it's truly the most cost-effective way of getting access to telephony and VoIP technology.

Microsoft could build equivalent telephony infrastructure for much less, just as Google is doing for Google Voice. The Skype client itself is written almost as if it were a piece of malware, using complex obfuscation and anti-reverse engineering techniques , and it would be disquieting for Microsoft to release something that behaved in such a shady way; at the very least, the client would surely have to be rewritten to avoid the obfuscation and outright hostility to managed networks that Skype currently has.

Even the access to paying customers is hard to justify. That's a huge disparity. Windows Live Messenger users have shown no propensity towards paying money, unlike Skype's 8 million paying users, and it may be a challenge to convert them from nonpaying to paying.

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