Microsoft on verge of buying Skype....

Sniper Ash6

Distinguished Member
Officially announced now. The press release explicitly mentions Xbox and Kincet support:

Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms.
Microsoft's acquisition of Skype for $8.5 billion becomes official -- Engadget
 

mattclarkie

Novice Member
I still find it hard to believe MS will ever make that $8,500,000,000 (I assume they mean US Billion). MS are obviously expecting to own it for decades, because I doubt anybody would buy it back from them anywhere near that price.
 

turk3y

Well-known Member
no but as they are in a phone race perhaps we will see some more focus on their platform and the rest can wait, it might be more they want to add credibility to their devices rather then skype on its own it , tie all these services together with unified voice as you can sign into xbox live on your phone, so perhaps you can chat with buddies in game from your handset etc...
 

Pebb

Distinguished Member
I think this will allow the voice chat to be improved a lot more, instead of its current state. However if I wanted Microsoft to buy a company who produce voice chat programs, then they should of looked towards the companies who make Team Speak or Ventrilo.

Because both of these programs, are used by a lot of clans on the PC. While being coded better for any games, that are being run at the same time.

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Possible Downside

I think the worst thing for this deal, is you may have an option to start paying a yearly based subscription for Skype on the PC. With one of the areas getting affected, being how many people can be in a chat room.
 
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Simon Coates

Guest
From an Xbox point of view: They've bought a business with over 660 million users. If 5% moved onto Xbox for video chat then MS would recover the money spent on Skype in Live subs in less than 10 years. That's ignoring additional console, Kinect, games and DLC sales.
 

mattclarkie

Novice Member
People aren't going to buy a 360 because they already have Skype and want to try a 360 based service, they might pay for a 360 based Skype service if they already have a 360.

MS haven't purchased Skype with 360 in mind, it just happens that integrating with Skype will be fairly simple as it has most of the infrastructure in place, and they can probably monetise it.

Alot of TVs (including Sony ones) are starting to include Skype integration, MS like the idea of being paid to license Skype as it is practically free money, but at the same time this would eat away at 360 Skype customers.
 

jdevil

Distinguished Member
Microsoft's $8.5B bid for Skype was more than double the $4B offered by Google. :eek:

Microsoft pays $8.5 billion for Skype, a company with 500 employees and 663 million non-paying customers. No wonder why currently Skype makes no profit, Microsoft has been in a long, slow decline for many years. Its years of dominance are over.

That being said there is a positive note, The Microsoft acquisition means the brand and technology will live on... that's a WIN for Skype users. Ebay on the other hand will be glad they made a return on their investment of $2 billion.
 

Dinky Dragon

Novice Member
Microsoft has been in a long, slow decline for many years. Its years of dominance are over.
Thats the biggest baloney Ive heard in a while. :smashin:
 

jdevil

Distinguished Member
Thats the biggest baloney Ive heard in a while. :smashin:
Well you see Darryl, Microsoft may post record breaking sales and profit (mainly thanks to revenues from Office and Dynamics ERP) but they are losing a war against their products.

IE - Losing browser share
Zune - May be DJsigma can find us some stats how well its doing.
Microsoft Vine - You might need to google what this is.
Windows Mobile, MSN Search, Hotmail, Microsoft virtual earth, Microsoft Map - Google did them all better!

It shows that the Microsoft OS has lost it's monopoly. This means that not every computer, phone, or internet device has to have a Microsoft OS. The Tablets will further damage Windows OS. Yes, Windows will be around, but it will no longer be a cash cow it used to be.

Microsoft brought computing into the mainstream by making computers accessible to more people, they did a very good job at that and Windows XP is still the greatest OS ever! I also recognise once they delivered nothing short of groundbreaking and deserving of praise but those days are genuinely over when you have Google and Apple doing it better.
 
D

Deleted member 92943

Guest
Microsoft pays $8.5 billion for Skype, a company with 500 employees and 663 million non-paying customers. No wonder why currently Skype makes no profit,
which is why im worried Microsoft are going to either start charging people for it (maybe on non Microsoft products) or riddle it with Bing/ Xboxs ads :rolleyes:
 

mattclarkie

Novice Member
Microsoft are not declining massively, but throwing around $8.5bn in its current condition is a sure way for it to collapse. Back in 1999 MS could lose $8.5bn and not notice, today if they do that regularly they will have to start cutting staff and products.

I'd assume MS expect to make money from the Skype acquisition, and that it isn't just a 'fire and hope' acquisition. Google have been massively overpaying lately, but even they only felt $4bn was enough.
 

DJSigma

Banned
MS make about 4-5 billion a quarter in profits and they already had huge cash reserves. Spending 8.5 billion is not even close to being "a sure way for it to collapse".

jalaldevil said:
It shows that the Microsoft OS has lost it's monopoly.
MS never had a monopoly in markets outside of desktop and laptop computer operating systems, but they still have a monopoly there. Windows 7 has sold faster than Windows XP.

Analysts such as Gartner and IDC predict that Windows Phone 7 will be the second most popular phones OS after Android by 2015 based on MS's partnership with Nokia, which would put them in a stronger position than they've ever been in with Windows Mobile in the past.

Windows 8 supports system on chip and has a separate interface that's tailor-made for tablets and other touch screen devices. It'll also run on ARM processors, which means it'll run on a ton of different mobile devices. MS are clearly not that interested in the tablet market until Windows 8 comes out, or they'd have made moves in that area already.

If you go back 10 years and look at the equivalent quarter to the last one, MS announced record quarterly revenue and profits. Here's the figures: -

Revenue = $6.59 billion
Profits = $2.62 billion

Compare that to their most recent figures: -

Revenue = $16.43 billion
Profits = $5.23 billion

That's not really a sign of a company that's in decline, even with strong competition from Google and Apple.
 

mattclarkie

Novice Member
But MS do have stronger competition today than they did previously, so they can't be reckless as they could in the past.
And I don't think the figures you quote take inflation .etc. into account ;)

I don't believe MS are going to fail at any time, but any company spending recklessly can fail, regardless of their profits, and if MS wasted $8.5bn every month on stupid acquisitions they would fail, but that obviously isn't going to happen.
 

m1ket

Well-known Member
But MS do have stronger competition today than they did previously, so they can't be reckless as they could in the past.
And I don't think the figures you quote take inflation .etc. into account ;)

I don't believe MS are going to fail at any time, but any company spending recklessly can fail, regardless of their profits, and if MS wasted $8.5bn every month on stupid acquisitions they would fail, but that obviously isn't going to happen.
They arnt going to acquire someone for $8bn every month though what a silly statement, so they are not being reckless

Typically these calls can be based on effort needed in r&d to build out infrastructure and acquire expertise for a competing product vs buying something, obviously the value fo skype to google would be less as they already have expertise in this area from google talk in the usa
 

DJSigma

Banned
I think they bought it to stop Facebook from getting it. They'll probably license the tech to them. Maybe they also acquired patents that will be useful to them. MS already has the same sort of tech as Skype, and MSN Messenger is used by twice the number of people that use Skype.

I read an article that said based on their current level of income, it'll take them 114 days to earn back what Skype cost them, so it's a drop in the ocean really. They have about 50 billion in cash reserves sitting there doing nothing. Still a strange purchase IMO, but we'll have to see what they do with it.
 

anlygi

Active Member
It shows that the Microsoft OS has lost it's monopoly. This means that not every computer, phone, or internet device has to have a Microsoft OS. The Tablets will further damage Windows OS. Yes, Windows will be around, but it will no longer be a cash cow it used to be.
Recent figures show that MS still have an 88.91% OS market share, granted it has declined from 91.46%. This figure is of all devices connected to the web; Desktops, notebooks, phones, tablets and everything else. Apple have 2.24% which is all their products combined, half of which is purely the iPhone. Android was in 6th place with 0.66%, behind Linux and Java ME.

Microsoft lost it's monopoly? Don't be ridiculous.

Source: Apple's iOS doubles operating system market share - Business - Macworld UK

But MS do have stronger competition today than they did previously, so they can't be reckless as they could in the past.
And I don't think the figures you quote take inflation .etc. into account ;)
You are putting inflation at way over 100% over 10 years? Come on!
 
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mattclarkie

Novice Member
But people do forget that MS is a listed company, they have investors with shares. If people lose faith in the company it doesn't matter that they have $50bn in cash reserve if the share prices fall the company is screwed.

Obviously buying Skype is not going to do this, but without MS detailing the financial motivation for buying Skype it does seem like they purchased it just to stop a competitor getting it, and that is rarely a valid reason for such a large purchase.

We seem to be entering yet another dotcom bubble, there have been some loony valuations for companies that are actually losing money. The AngryBirds devs were valued at $200m, it only made $3m profit and now they have saturated the market with that bloody game.
 

turk3y

Well-known Member
I think they bought it to stop Facebook from getting it. They'll probably license the tech to them. Maybe they also acquired patents that will be useful to them. MS already has the same sort of tech as Skype, and MSN Messenger is used by twice the number of people that use Skype.

I read an article that said based on their current level of income, it'll take them 114 days to earn back what Skype cost them, so it's a drop in the ocean really. They have about 50 billion in cash reserves sitting there doing nothing. Still a strange purchase IMO, but we'll have to see what they do with it.
I think your right its worth more as not being owned by a competitor than being owned by themselves,

perhaps as skype seems to be getting close to tv integration M$ see it as another way into the livingroom ?
 

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