Tag Archives | Internet Services

Okay, Microsoft, Now What?

It’s not yet public, but Kara Swisher says it’s confirmed: Microsoft is buying Skype, apparently for $8.5 billion, and apparently with the intention of linking the famous, popular, and unprofitable Internet telephone service with its Windows Live offerings. Kara reports that the deal–which would be Microsoft’s largest ever–will be announced tomorrow morning, conveniently grabbing headlines during the first morning of Google’s IO conference.

Maybe you think the acquisition is a no-brainer, but I suspect that the general initial consensus among non-Redmondians is that it’s an awful lot of money to spend on a company that’s likely to give Microsoft heartburn as it tries to digest it. It’ll be intriguing to see if the formal announcement includes a coherent explanation of why this makes sense: you’d think that part would be easy if Microsoft itself has figured out why this is a good idea.

For now, I’m thinking about the last time a big company bought Skype (albeit for a lot less money) based on the promise of powerful synergies and new opportunities. Let’s read a 2005 press release, shall we?

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