Microsoft to buy Skype for $7 billion • Hacker News Board

Re: Microsoft to buy Skype for $7 billion

#151

Post by moeffju » Tue, May 10, 2011, 6:57 AM UTC

bvi wrote: post #144

jsz0 wrote: post #87

This is Microsoft's ICQ moment. Overpaying for a company at the moment when its core competency is becoming a commodity. Does anyone have the slightest bit of loyalty to Skype? Of course not. They're going to use whichever video chat comes built into their SmartPhone, tablet, computer, etc. They're going to use FaceBook's eventual video chat service or something Google offers. No one is going to actively seek out Sky…

While you're right about loyalty, quality matters too. Skype is infinitely better than Google Voice when it comes to video calls (very little lag, if at all!) - plus, users can video conference for free, which is not an option with Google Voice (as of now). My point is, Skype is the best product in the market in its domain, no question. I do agree than Microsoft is massively overpaying for Skype, however.

Skype stopped free video conferences after the end of the beta phase. You now need a subscription to have video calls with multiple people.

Re: Microsoft to buy Skype for $7 billion

#152

Post by forgottenpaswrd » Tue, May 10, 2011, 7:01 AM UTC

cfinke wrote: post #23

mgkimsal wrote: post #15

Earlier quoted context omitted.

The value of the dollar's dropped. Not by that much, but it's certainly changed. That, and ebay never figured out how to monetize it. MS likely has some plans in place to aggressively make money from it. I'm a skype subscriber, and probably will continue to be one, assuming they keep at least the same level of support for Macs.

> The value of the dollar's dropped. Since the owners are almost all US-based (I think), fluctuation in the dollar against foreign markets shouldn't have much impact on Skype's pricing. Even so, the dollar's value against the Euro hasn't hardly changed at all: eBay announced their sale of Skype on September 1, when 1 USD = 0.7 EUR. Today. 1 USD = 0.6975 EUR.

"Since the owners are almost all US-based (I think), fluctuation in the dollar against foreign markets shouldn't have much impact on Skype's pricing."

Is not fluctuations against foreign market, inflation is rampant, that means that is something has the same value,(a company) you need to pay more dollars for it.

Dollar has gone down against commodities(sugar, rice, oil, gold, copper...) because FED is printing dollars like there is no tomorrow. Europe is doing the same for Euro(because if they do not Spain, Greece, Portugal and Ireland burn).

Re: Microsoft to buy Skype for $7 billion

#153

Post by garethm » Tue, May 10, 2011, 7:01 AM UTC

Duff wrote: post #74

dstein wrote: post #66

Earlier quoted context omitted.

Dividends reward short term shareholders. Capital reinvestment rewards long term shareholders (if it's successful).

10 years ago, Microsoft was $35. Today it is $25 and change. Not very rewarding. Microsoft is like the electric utility of the technology business -- they should embrace that or wake up and break up the company into manageable parts. Buying Skype? That's not creating shareholder value.

For what it's worth, there was a stock split in 2003 [1], so the same stock would be $50 today.

1: http://www.microsoft.com/investor/InvestorServices/FAQ/defau...

Re: Microsoft to buy Skype for $7 billion

#154

Post by drink » Tue, May 10, 2011, 7:08 AM UTC

Strange realization: I am relieved that Microsoft bought this, and not Facebook. Can't remember the last time I was relieved that Microsoft bought a company.

Re: Microsoft to buy Skype for $7 billion

#155

Post by ikono » Tue, May 10, 2011, 7:20 AM UTC

dstein wrote: post #22

Duff wrote: post #11

Huh? I understand that Microsoft is sitting on billions in cash, but couldn't they just pay a dividend?

Paying a dividend will not save Microsoft. Even Microsoft realizes that.

I'm going to play a little devils advocate here. What if MS payed a big enough dividend that it was clear to everyone inside that burning money playing catch up was not a viable strategy. Is it not possible that fewer extraneous resources would force them to refocus?

Re: Microsoft to buy Skype for $7 billion

#156

Post by mojuba » Tue, May 10, 2011, 7:20 AM UTC

drink wrote: post #154

Strange realization: I am relieved that Microsoft bought this, and not Facebook. Can't remember the last time I was relieved that Microsoft bought a company.

That's really strange. Not being a fan of either, I'd bet Facebook knows a bit more about Internet than Microsoft.

Though in the end both are just money making machines with unethical practices. In either case you can expect Skype to become less geek-friendly and more like a surprise box with an evil clown inside.

Re: Microsoft to buy Skype for $7 billion

#157

Post by ikono » Tue, May 10, 2011, 7:25 AM UTC

dstein wrote: post #66

philwelch wrote: post #49

Earlier quoted context omitted.

It will serve the long term interests of Microsoft shareholders; sadly, Microsoft doesn't realize that.

Dividends reward short term shareholders. Capital reinvestment rewards long term shareholders (if it's successful).

>if it's successful

That's a big if for them right now. When you're trading at a P/E in the single digits ex cash, the market is telling you they have no faith in your ability to re-invest your earnings(especially when interest rates are so low).

Re: Microsoft to buy Skype for $7 billion

#158

Post by blub » Tue, May 10, 2011, 7:29 AM UTC

lookingchris wrote: post #110

sukuriant wrote: post #98

Earlier quoted context omitted.

I have loyalty to Skype. And this is infinitely better than Facebook owning Skype, imo

MS and FB are practically the same ethics-wise to me. I'd be interested to hear more of your thoughts on this.

Companies don't have ethics, but a company that sells eyeballs for money is much more likely to take decisions that negatively impact customers compared to a company that sells producs.

Google and Facebook would have been worse for Skype, they both suck at privacy.

Re: Microsoft to buy Skype for $7 billion

#159

Post by mahrain » Tue, May 10, 2011, 7:31 AM UTC

joshzayin wrote: post #4

If this goes through, I wonder what would happen to Skype's Linux and Mac support. I'd hope MS would still support it, but I don't think they have any Linux software currently (I'm not positive about that, so please correct me if I'm wrong) and the Mac version of Office is always delayed compared to the Windows version. I hope Skype doesn't similarly languish.

Microsoft is actually not too bad at Mac support, their Office is usually one year later than the Windows version (Office 2011 vs 2010 for PC, all the way back to Office 98 for Mac vs 97 for PC). And then they make the Expression suite, Microsoft Messenger (Windows Live client), Silverlight and Windows Media components.

Re: Microsoft to buy Skype for $7 billion

#160

Post by InnocentB » Tue, May 10, 2011, 7:36 AM UTC

timc3 wrote: post #149

mmaunder wrote: post #141

Earlier quoted context omitted.

There is a very strong network effect with Skype for PC to PC calls. But I doubt MS is going to get full value. They have had little success with freemium business models and I don't see why this would be different.

In what way do you measure success? Hotmail and Windows Live Messenger for two services have a huge amount of users.

I wouldn't call either of those an example of a successful freemium business model. A free, ad-supported business model, perhaps.