With Skype buy, Microsoft plays keep-away with Google
Microsoft forks over $8.5B to get Skype and keep it away from rivals
Computerworld - Microsoft's scooping up of Skype should be a great boon for the software maker, despite the hefty $8.5 billion price tag, say industry analysts.
An added benefit is that buying Skype puts the screws to Microsoft rival Google, which had been rumored to be pursuing Skype on its own. Microsoft may feel that keeping a prized communications company out of Google's hands is worth a good deal of the cost of the acquisition.
"Microsoft wants to make sure Google doesn't get Skype," said Rob Enderle, an analyst at Enderle Group. "They do not want Google to corner the market on communications. Microsoft thinks Google has enough. They don't want Google to have this as well."
Tuesday morning, Microsoft CEO Steve Ballmer held a press conference to announce that the company had reached a deal Monday night to buy Skype, a voice and video communications company. Microsoft will paying $8.5 billion in cash for the company.
Ballmer said that once the merger is finalized, Microsoft will connect Skype users with its Outlook and Xbox Live services, while also connecting Skype to its Xbox and Kinect gaming systems and Windows Phone mobile operating system.
During the press conference, Skype CEO Tony Bates did not answer when a reporter asked him what other companies had been vying to buy Skype. Over the past few weeks, reports have circulated widely that both Google and Facebook were trying to scoop up Skype.
Buying Skype makes sense for Microsoft's business strategy, said Dan Olds, an analyst at Gabriel Consulting Group.
"Microsoft will be able to integrate Skype functionality into their products and create some synergy," he explained. "For example, functions could be built into Microsoft Office that allow you to call (via Skype) the co-worker who created a document that you're working on -- with just a mouse click or two."
So if Skype offers strong business benefits and intensifies its competition with a big business rival, that's just a win-win situation, analysts said.
"For Microsofties, this has to be considered a big victory over Google and even Facebook, both of whom have been rumored to be after Skype," Olds said.
Enderle said the high price that Microsoft paid for Skype shows that it's more than just a move to build out the company's communications offerings.
"They're tired of fighting Google from behind," he said. "I think Microsoft is just being a tougher negotiator, and they're willing to go to great lengths to make sure Google doesn't get anymore beachheads."
While the move will prevent Google from attaining another strong brand name in Skype and will slow the search company's move into the voice and video communications market, Google has other options.
- Best iPhone, iPad Business Apps for 2014
- 14 Tech Conventions You Should Attend in 2014
- 10 Desktop Apps to Power Your Windows PC
- How to Add New Job Skills Without Going Back to School
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- What Datapipe customers need to know about the new PCI DSS 3.0 compliance standard This handy quick reference outlines what PCI DSS 3.0 is, who needs to be compliant and how Alert Logic solutions address the new...
- Defense Throughout the Vulnerability Life Cycle This whitepaper provides insight into how to leverage threat and log management technologies to protect your IT assets throughout their vulnerability life cycle.
- The Critical Role of Support in Your Enterprise Mobility Management Strategy Most business leaders underestimate the importance of tech support when they choose an EMM solution. Here's what to put on your checklist.
- Separating Work and Personal at the Platform Level: How BlackBerry Balance Works BlackBerry® Balance™ separates work from personal on the same mobile device, right at a platform level. Find out how it can work for...
- Live Webcast Best Practices for the Hyperconverged Enterprise Network To the Age of Constant Connectivity and Information overload
- Getting Ready for BlackBerry Enterprise Service 10.2 Find out how BlackBerry® Enterprise Service 10 helps organizations address the full spectrum of EMM challenges, while balancing the needs of both the...
- Containerization Options: How to Choose the Best DLP Solution for Your Organization This webcast outlines a framework for making the right choice when it comes to containerization approaches, along with the pros and cons of... All Networking White Papers | Webcasts