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Why Microsoft bought Skype

cringely.com

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Re: Why Microsoft bought Skype

#21

Post by maayank »

fauigerzigerk wrote: post #14

I don't believe that at all. Google doesn't need Skype. Microsoft bought Skype because they have large amounts of cash in Europe that they cannot repatriate without taking a huge tax hit. For some strange reason, Ballmer has that obsession with hyperactively pursuing the same consumers that Google and Apple have. That's why he didn't see anything else to buy in Europe (Actually there isn't a whole lot). But there is…

Not only that, but they (MSFT) have much less of an existing/quality solution in either the small business market or the enterprise *RM markets.

Re: Why Microsoft bought Skype

#22

Post by ansy »

fauigerzigerk wrote: post #14

I don't believe that at all. Google doesn't need Skype. Microsoft bought Skype because they have large amounts of cash in Europe that they cannot repatriate without taking a huge tax hit. For some strange reason, Ballmer has that obsession with hyperactively pursuing the same consumers that Google and Apple have. That's why he didn't see anything else to buy in Europe (Actually there isn't a whole lot). But there is…

Interesting point about taxes. Can anyone confirm if this is how it works? What prevents Microsoft Europe from buying an entity in the United States and holding the new company in Europe? It's not like other European entities need to pay tax penalties on top of the purchase price when buying assets abroad, right?

Re: Why Microsoft bought Skype

#23

Post by soofaloofa »

> Apple is not the next anything because the role it aspires to transcends anything imaginable by Microsoft, ever.

Really?

Both are publicly traded companies whose role is to make money for shareholders. I don't see how it's possible to transcend this.

Re: Why Microsoft bought Skype

#24

Post by cletus »

barrkel wrote: post #19
cletus wrote: post #15

Am I the only one who has had terrible experience with Skype? I live in New York but my family is from Australia so I use video-calling them to them all the time. I've tried using Skype but basically it's terrible. Poor audio, choppy frame rates and at some point it will start giving messages about "degraded performance" and we'll lose video. My setup is a 50Mbps cable line using wireless (N) from a Macbook Pro. The…

Australia has small and expensive pipes to the rest of the world, and it shows up as caps and high prices. I'd be surprised if Australian telcos weren't working hard to degrade VoIP generally. For my own part, I use Skype for almost every outgoing phone call. I spend perhaps 5 GBP/month on threshold auto-credit. The biggest problems with it happen with concurrent upload activity, especially torrents.

This was true 10 years ago but a lot has changed and it's fairly damning evidence of just how much the US has stood still on Internet access in the last decade.

Consider iiNet, Australia's third largest ISP:

http://www.iinet.net.au/broadband/plans.html

200GB/month ADSL2+ for $50/month (+$30/month "phone tax"). In NY I have Time Warner Cable 50Mbps but it's basically capped at 250GB and I think I pay $80/month for it.

But there are three important advantages Australia has in this regard:

1. The caps are known and advertised. In the US they are far more surreptitious;

2. You get what you pay for. If you pay for 200GB, you get 200GB. There is no hiding behind "fair use" or nebulous definitions of "unlimited". This also means that a low traffic user can pay as little as $30/month for their ADSL2+ connection. Nor do you get labelled a bandwidth hogged and get transferred to some incredibly oversubscribed network if you dare to download (common practice in the UK); and

3. If you wish, you can pay for and get 1TB+/month. Where I am, my only choices are TWC and crappy ADSL1 providers. If I wanted >250GB/month I couldn't get it.

And all this is the current system. Australia is in the early stages of rolling out FTTH (fibre to the home) for ~95% of the population with structural separation between providing wholesale and retail services.

So I wouldn't be too quick to crow about Internet advantages in the US over Australia (or anywhere really).

Re: Why Microsoft bought Skype

#25

Post by fauigerzigerk »

ansy wrote: post #22
fauigerzigerk wrote: post #14

I don't believe that at all. Google doesn't need Skype. Microsoft bought Skype because they have large amounts of cash in Europe that they cannot repatriate without taking a huge tax hit. For some strange reason, Ballmer has that obsession with hyperactively pursuing the same consumers that Google and Apple have. That's why he didn't see anything else to buy in Europe (Actually there isn't a whole lot). But there is…

Interesting point about taxes. Can anyone confirm if this is how it works? What prevents Microsoft Europe from buying an entity in the United States and holding the new company in Europe? It's not like other European entities need to pay tax penalties on top of the purchase price when buying assets abroad, right?

Good question. Presumably, a corporation cannot pick and choose to act as a single entity in one regard and as multiple independent companies in another. But I'm not sure either how it really works. Would be interesting to hear from an accountant or tax lawyer.

[Edit] There's an article in the WSJ by John Chambers of Cisco and Safra Catz of Oracle on the issue: http://online.wsj.com/article/SB1000142405274870446900457553...

Re: Why Microsoft bought Skype

#26

Post by raarky »

fauigerzigerk wrote: post #14

I don't believe that at all. Google doesn't need Skype. Microsoft bought Skype because they have large amounts of cash in Europe that they cannot repatriate without taking a huge tax hit. For some strange reason, Ballmer has that obsession with hyperactively pursuing the same consumers that Google and Apple have. That's why he didn't see anything else to buy in Europe (Actually there isn't a whole lot). But there is…

I agree with you. MS and SAP would be a pretty formidable force.

Having said that, MS continue to make very good strides in the business market but they still need to play in the consumer market.

Re: Why Microsoft bought Skype

#27

Post by megaman821 »

He sure has a lot of confidence on how successful Google would be with Skype but that doesn't really jive with reality.

Google's only successful home grown products are Search and Gmail. Android and Youtube are the most successful acquisitions. Voice, Double-Click, and Analytics are doing ok, and then there are about three dozen failures. It is ok to fail but people shouldn't pretend everything Google touches turns to gold. Skype probably has just as much chance as succeeding with Microsoft as it does with Google.

Re: Why Microsoft bought Skype

#28

Post by raarky »

cletus wrote: post #15

Am I the only one who has had terrible experience with Skype? I live in New York but my family is from Australia so I use video-calling them to them all the time. I've tried using Skype but basically it's terrible. Poor audio, choppy frame rates and at some point it will start giving messages about "degraded performance" and we'll lose video. My setup is a 50Mbps cable line using wireless (N) from a Macbook Pro. The…

When I try to call land lines in New Zealand, I consistently get an extremely poor connection.

You get that talk delay which can totally ruin conversation flow.

The internet in NZ pretty bad but it surely can't be that bad. It's kinda made me think about putting on tin foil hat and think there's some kind of Telecom [monopoly telecoms company in nz] shady service degradation going on.

Re: Why Microsoft bought Skype

#29

Post by macrael »

jodrellblank wrote: post #12
VB6_Foreverr wrote: post #6

He's expressing an opinion except his style is to state his opinion as fact without providing any evidence at all. It's not worth reading. Now if he had predicted this purchase, that would be different.

It should be the default understanding that what someone says and writes is their opinion. Not having that as the default is how we ended up with the terrible popular style "in my opinion it could be argued that for some people it is mostly better if they XYZ, where possible (consult your doctor)". NB, when I say it's a terrible style, that's my opinion, not a universal truth or peer reviewed fact cited in a publishe…

I'm not so sure. I agree that weasel words can destroy a piece of writing, but a complete lack of them can come off badly too. The main effect of killing the qualifiers in your writing is increasing the confidence in the tone of the piece. Obviously, we all have different levels of confidence in our many different opinions, and if you stop using qualifiers all together, you lose the ability to distinguish between different points on the confidence continuum.

If I write with the same confidence about two opinions I have, one I am vey sure of and one I am doubtful about, then I have failed to communicate well. Furthermore, writing in a way that expresses complete confidence in your opinions can change the tone of the conversation that it sparks. When you qualify your opinions, you signal that you are more willing to discuss that point. Speaking with complete surety can shut down a comment thread or turn it more antagonistic.

Re: Why Microsoft bought Skype

#30

Post by ansy »

fauigerzigerk wrote: post #25
ansy wrote: post #22

Earlier quoted context omitted.

Interesting point about taxes. Can anyone confirm if this is how it works? What prevents Microsoft Europe from buying an entity in the United States and holding the new company in Europe? It's not like other European entities need to pay tax penalties on top of the purchase price when buying assets abroad, right?

Good question. Presumably, a corporation cannot pick and choose to act as a single entity in one regard and as multiple independent companies in another. But I'm not sure either how it really works. Would be interesting to hear from an accountant or tax lawyer. [Edit] There's an article in the WSJ by John Chambers of Cisco and Safra Catz of Oracle on the issue: http://online.wsj.com/article/SB100014240527487044690045…

Humorous how the article recommends the US can take the suggested 5% repatriating tax revenue and use it to give a tax break. So the net repatriating tax revenue to the US government would be 0%? Ah, WSJ.

On the other hand dropping the tax would encourage even more overseas shenanigans, which I guess is burning Microsoft (and presumably Oracle and Cisco) for not thinking ahead, forcing them to pass on valuable domestic investments and overpay for less valuable overseas investments.

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