Labelled as “exciting times” by Microsoft CEO Steve Ballmer, the Microsoft buyout of Skype is going to mean certain changes to the Internet Explorer application. Initial thoughts of the purchase may be centered around both the reasons for buying (and the price paid), but the Internet World is waiting for technology news in coming months.
So what does $8.5 billion buy Microsoft? With over 600 million consumers World Wide, Skype truly is a global brand with the sort of appeal that regularly results in large fees switching boardrooms. The questioning of the ticket price surely emerges from the fact that Skype has found it hard to make money. But let’s apply that equation to Google buying YouTube and it’s not dissimilar. Microsoft has the same chance to take advantage of direct advertising as Google has through Adsense ads on YouTube.
The value of other phenomenal success stories such as the Facebook and Groupon websites further puts play to any suggestions that Skype is overpriced. Facebook still struggles to make money, yet is the most visited website in the World. It seems then that a price can be put on potential exposure to markets, and Skype has 50 million regular users.
The other main reason could be the technology alone. By taking Skype and creating a plugin that works as efficiently as the current Skype download, Microsoft can maintain and potentially gain market share in the browser stakes. Although still at over 40% of Worldwide users, Microsoft has seen a steady decline over the last decade due to Firefox and Chrome browsers. Control of Skype means access to Internet savvy consumers across the globe.
Although the current Skype owners can consider themselves successful, seeing a 3.3 times increase in share value, this isn’t always the case with ‘Tech Buys”. News Corp famously bought MySpace for $580 million back in just 2005. They are now looking to off-load the once market leading social network for closer to $50 million.
