Microsoft Agrees To Purchase Skype For $8.5 Billion
The 8.5 billion dollar buy represents the largest single acquisition in Microsoft history and will likely be win-win for both Microsoft and Skype parent company Skype Global. Microsoft will of course get over 100 million happy Skype customers who use the service on a daily basis. Skype Global will be able to deal with the fact that despite popularity, Skype isn’t that profitable. Despite $859.8 million in revenue, the company reported a loss of 7 million in 2010. Much of that is attributed to heavy growth despite a small pool of paid-members, something Microsoft no-doubt will seek to rectify shortly.
Most Skype users are probably groaning right now, for good reason. Microsoft has a long history of acquiring previously wonderful services and ruining them – Hotmail – or making them prohibitively expensive – Word – and Skype users should obviously be prepared for more of the same here. But it doesn’t have to be a disaster. It could be a chance to kill two birds with one stone. For instance, though still enormous, Hotmail is a joke whose only benefit is to help Hotmail customers warn their friends with Gmail accounts to expect nothing but spam, scam and crazy political-forwards, and to filter accordingly. Hotmail is seen as a ghetto email service for computer illterates and in the last year has seen a measurable migration of Hotmail users over to Gmail (Sadly, these people keep trying to turn Gmail into Hotmail.)
Microsoft has to know that Gmail currently offers free international calls between Canada and the US (not to mention free video chat for everyone). A good choice would be similarly combining Hotmail with Skype in some capacity, say, providing Skype to Hotmail members for free, or at a steep discount. That kind of actual utility would have great potential to salvage their pathetic email service’s reputation and make it competitive again. To be sure, it probably wouldn’t be free.Microsoft wouldn’t spend this kind of money without having some kind of plan to wring revenue out of the property. But if Skype becomes too expensive or inconvenient, they’ll be driving people into Google’s arms.
Considering the boneheaded decisions the company has made in the last decade, it’s more likely we’re looking at the kind of outrage-inducing ripoff that defined the paywall for XBLA Gold Membership. Certainly, whatever price point they settle on will be cheaper than the arbitrary mugging associated with standard international calling. But it’s still going to feel like a slap in the face to millions of Skype users who depend on the service and won’t appreciate being forced into a scheme they never agreed to.
We’re hoping Microsoft shows some wisdom, and maybe they will. Skype integration with Outlook is a given, but the first confirmed change to Skype services is the news that it will be available on Xbox Live, providing a wonderful opportunity for Skype users to communicate with international loved-ones via homophobic epithets and racial slurs.
However this shakes out, at least we won’t be forced to purchase MS points to use it.