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Microsoft to buy Skype for $7 billion

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Re: Microsoft to buy Skype for $7 billion

#251

Post by riams »

JoeAltmaier wrote: post #211
riams wrote: post #207

Earlier quoted context omitted.

"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." Really? I'm thinking the barriers to switch from Skype are pretty high due to the vast amount of users Skype has. Why switch to a slightly more polished product when you have no one to communicate with there? We have to remember t…

They were pretty quick to adopt Skype. Its only seconds to load another VOIP-style client, and no time at all to use the one that came preinstalled. And you always know who you want to talk to on Skype, you're not calling the flower shop or anything, its your brother-in-law or whoever, so you can arrange for them to try another client in seconds. So the barrier to switching is pretty low.

I think you are overestimating the average computer user. As personal computing and broadband access has risen quickly, so have the class of technophobes.

Also, a product will seldom sell itself. The Skype brand has plenty of intangible value, for instance from their collaboration with Oprah.

Re: Microsoft to buy Skype for $7 billion

#252

Post by netcan »

aneth wrote: post #230
netcan wrote: post #165

Earlier quoted context omitted.

My mother, father, brothers and friends in 3 countries all have skype running most days. Skype have my credit card so I always have skype-to-phone available (I use it mostly to find my cell). It's been that way for me for about 7 years. That means I have skype running and I use it every day (but I only spend about $20 per year). It's not loyalty, but network effects and momentum count for something too. Not sure that…

> it could help strengthen the corporate MS position People are going to continue to buy Word, Windows, and Exchange because they have a commodity video product "integrated"? I don't think so.

No. Noone is going to buy anything because it is "integrated" with a commodity video product.

They might if it is integrated (no quotes) with the call, chat, filesharing and screenshare client that they, their clients and suppliers use (and understand) if it is integrate in some useful way or maybe if it comes with some other corporate value add (data about who employees call, chat..).

Even though it really isn't marketed that way, skype is a business tool, something people use at the office. It is used by lots of people that use Office, Media Player and IE only.

I assume by the tone of your comment that you either don't think that something everyone knows and have already been using for 5 years is particularly valuable or that you are skeptical about people continuing to buy MS for any reason. Microsoft would disagree with both of these.

Re: Microsoft to buy Skype for $7 billion

#253

Post by netcan »

richardw wrote: post #107
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…

One reason is likely their experience with IE. They took so much flak destroying Netscape that it's just cheaper and less stress to buy the market leader and get on with it. In terms of 'why', this is just the easiest way to integrate telephony with their own operating system in a way that leverages the network effect. Soon, any app which runs on Windows could just use the Skype Service. Mac/iPhone/Linux will only ha…

Maybe you are logged into skype by default and 3rd party apps can access it.

Re: Microsoft to buy Skype for $7 billion

#254

Post by smackfu »

hessenwolf wrote: post #225
smackfu wrote: post #217

Earlier quoted context omitted.

Funny, but financial advisors on acquisitions are just people who want a few percent for doing nothing.

Hmmm... I would definitely be happy to pay somebody a few bucks to perform a reasonable independent valuation. I mean, seriously, whats 500K compared to 8.5 billion?

The counterpoint is basically, did you see what happened with the global financial crisis and valuations?

Re: Microsoft to buy Skype for $7 billion

#255

Post by zipdog »

nikcub wrote: post #221
brudgers wrote: post #204

Earlier quoted context omitted.

> "As many users as Facebook" I suspect that there is a closer correlation to one account = one person with Skype than Facebook since there is little social incentive to create multiple Skype accounts. In addition, the strength of relationships between Skype customers is more easily determined. Finally, Skype has the potential to scale well into MicroSoft's core B2B business model.

I should have asterixed that with 'registered'. Updated numbers are out now as part of the msft press release: http://news.ycombinator.com/item?id=2532230 Facebook has 3x active over Skype - but as you mention, while Facebook are straight-up about their numbers, it is still hard to compare because of differing methodologies and different app types

I've wondered what impact Zynga has on artificially boosting Facebook's active user count.

Zynga's games provide an incentive to operate multiple accounts, and counts about 200m active users, so if only 5% of those users were each running multiple accounts (say 5 extra), that's around 50m dupe accounts. (I figure thats an over-estimation though)

Not to mention the other reasons people create dupe Facebook accounts

Re: Microsoft to buy Skype for $7 billion

#256

Post by ianferrel »

monopede wrote: post #195
blub wrote: post #186

Earlier quoted context omitted.

No, they are very similar. * Most of the services they provide are free (with a hidden privacy tax). * They make most of their money based on analyzing their user's data. * Both have a hostile attitude towards privacy, claiming that it's dead, trying to make it look old fashioned and irrelevant.

Both have a hostile attitude towards privacy, claiming that it's dead, trying to make it look old fashioned and irrelevant. [Citation Required]

http://www.lmgtfy.com/?q=zuckerberg+schmidt+privacy+is+dead

Re: Microsoft to buy Skype for $7 billion

#257

Post by wtracy »

bane wrote: post #65
trout wrote: post #32

Microsoft owns the desktop - that's their cash cow. For large businesses they (basically) have to buy outlook / exchange. They throw powerpoint, visio, word, excel on top of that, plus the operating system, and they own it. From an operating system standpoint, there's not any real threat. From a productivity suites perspective, there's a bit more threat from cloud, but it's still comparatively small. Same can be said…

I find it ridiculous that I can't find another desktop email client that will natively work with exchange/MAPI, and Microsoft knows it. http://projects.gnome.org/evolution/

Far be it from me to hate on a FOSS project, but be aware that the Exchange support for Evolution has a reputation for off-and-on compatibility issues. (Microsoft likes to break things. Who knew?)

From what I've heard, it's not always plug-and-play to set up, either. (Calendaring support in particular.)

Re: Microsoft to buy Skype for $7 billion

#258

Post by zipdog »

technomancy wrote: post #248
freechoice1 wrote: post #218

Recently when I started to outsource work I noticed everyone had Skype and wanted to use Skype. Skype is the no1 general platform for reliable business communications today. I got amazed myself how many actually use Skype in this sector. Skype is the new msn for voice chat and has been for quite a while. One of the reasons Skype is so attractive for businesses is the encryption methods it uses. I know the governments…

> I know the governments are annoyed by Skypes encryption due to they cannot listen and spy on those talking there. Which governments? I've heard that the US and China have the keys.

Yeah, I vaguely recall Skype doing something in around 2008 that gave US govt some level of access. (No citation)

Re: Microsoft to buy Skype for $7 billion

#259

Post by aneth »

netcan wrote: post #252
aneth wrote: post #230

Earlier quoted context omitted.

> it could help strengthen the corporate MS position People are going to continue to buy Word, Windows, and Exchange because they have a commodity video product "integrated"? I don't think so.

No. Noone is going to buy anything because it is "integrated" with a commodity video product. They might if it is integrated (no quotes) with the call, chat, filesharing and screenshare client that they, their clients and suppliers use (and understand) if it is integrate in some useful way or maybe if it comes with some other corporate value add (data about who employees call, chat..). Even though it really isn't mar…

If this is really where they are headed, it is just ineffective product strategy and fuzzy thinking on Microsoft's part.

They get two things:

Technology: These are technologies Microsoft already has or could develop cheaply (say, for 1% of the cost of Skype?).

Users: Yes, no one will buy Microsoft because it is integrated in "some useful way" - whatever that means. 99% of the utility of Skype is already present without an integration - and other products can also integrate with Skype or other similar technologies if there is really a value add there. There is no sustainable market advantage and no value compelling enough to affect a purchase decision. Users have all they need from Skype - making calls one click away or some light simple integration like that is not a reason to spend 8.5B on a company.

Words like "synergy," "cross-sell," "eyeballs," etc. were no doubt tossed around the MS board room with this vision in mind. Abstract synergies don't work, and integrating unrelated products doesn't work.

Ebay bought Skype because they thought lack of telephony was the reason they were getting their but kicked by Taobao in China. Nobody cared and users weren't interested. Ebay was losing because their pricing and service model were wrong for the market, but it's easier to buy companies than fix your own, so that's what they did.

Re: Microsoft to buy Skype for $7 billion

#260

Post by nikcub »

raganwald wrote: post #129
lurker19 wrote: post #80

Earlier quoted context omitted.

Mac is not a PC. Apple will hesitate a long while before bringing Facetime to the PC, because Facetime promotes all-important lock-in to the Apple ecosystem and sells Apple hardware.

I will bet a bottle of single malt that Apple will bring FaceTime to the PC. I agree that FaceTime sells Apple hardware, but I think the hardware they want to sell is the iOS product line. Weigh how many Mac sales the will lose if people can get FaceTime on a PC against how many iPhone and iPad sales they will make to people who can now chat with Grandma on her PC? Ubiquity on the desktop and exclusivity on the mobil…

For any communication tool to be successful it has to be cross-platform. You aren't going to use an application if you can only talk to people who are running the same app on the same OS as you

That is why I agree that both Apple will eventually release FaceTime on Windows, and why Microsoft will do everything they can to keep Skype multiplatform

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