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Summary:

Microsoft officially announced it’s paying $8.5 billion for Skype today. At a press conference in San Francisco this morning, Microsoft CEO Steve Ballmer and Skype CEO Tony Bates gave more details about how they see the companies working together.

microsoft skype

On the morning Microsoft made its $8.5 billion acquisition of Skype official, Microsoft CEO Steve Ballmer and Skype CEO Tony Bates held a press conference in downtown San Francisco to discuss their views on how the deal fits in with both companies’ strategies going forward. With Google’s I/O developer’s conference happening just a few blocks away, Microsoft communications head Frank Shaw said the software giant decided to call the presser because it “heard there wasn’t much happening today.”

A ton has been said about the deal already, but here are the key takeaways from Ballmer and Bates’ comments at the press conference:

  • Microsoft likes that Skype is a verb. “Any time people talk about communications, they talk about Skype,” Ballmer said. And its large — and growing — userbase was a large part of what Microsoft found interesting in the company. Also important is how engaged those users are: Bates said Skype has more than 100 million users every month, and those users spend an average of 100 minutes a month talking on the service.

  • Skype will be integrated across multiple Microsoft businesses.There’s plenty of room for Microsoft to create optimized apps for Skype in its Windows Phone 7 products, as well as integrating it with Xbox Kinect. But in addition to the consumer business, Microsoft sees a big opportunity to become a part of its enterprise products, like Outlook and its Lync enterprise communications platform.
  • Skype will continue to be multi-platform. Ballmer said Microsoft saw enormous opportunity for technology that brings people together all around the world and on multiple screens, whether it be a PC, a mobile phone, a slate or on the TV. As a result, both Ballmer and Bates stressed the importance of continuing to support Skype services not just on products like Microsoft PCs, the Xbox game console and Windows Phone 7 devices, but on all platforms and devices it’s on. Bates said that multi-client, multi-platform support was not just fundamental to Skype’s value proposition to Microsoft, but Microsoft’s commitment to that end was fundamental to getting the deal done.

  • Advertising will be a big part of Skype’s new revenue streams. Bates talked about opportunities for Skype to increase revenues by working more ads into its free service. He said Skype was now “just scratching the surface” with ads in the Windows client, and expects to expand the availability of immersive rich media experiences in its products going forward. Bates sees 45-percent compound annual growth from video advertising over the next five years. And Ballmer said even before Microsoft made its bid for Skype, the two companies were working on advertising opportunities together.

  • The living room will be a big part of Skype’s future. Skype is already available on 50 million TVs and other devices in the living room, Bates said, but that’s expected to grow. Integrating Skype with Xbox and Kinect will rapidly expand that opportunity.
  1. I hope that Skype will remain worldwide and will continue to work on all operational systems.

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  2. One vision-less buggy company buys an even buggier company with some vision. I wonder how blind this mutated bug is going to be.

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    1. There’s so much stupidity in this post it’s downright staggering. There is nothing vision-less about products like Bing Vision, WP7, Photosynth, Streetside, Seadragon, Windows 8, Office 365, Kinect, Xbox Live, etc.

      You truly are a clueless idiot.

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  3. David Scott Tuesday, May 10, 2011

    Does anyone else see a possible “FaceTime killer” attempt here?

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    1. More than that. I see a social network too.

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    2. No. Facetime is the poor cousin to Skype and somewhat limited, though it is Apple’s attempt to attack Skype. Somewhat doomed to failure though due to it being limited to one platform.

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  4. Skype is great. Great buy for MS

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  5. i love 4ever ms :)

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  6. But MS already has that technology with MS Communicator and quite a few other voice related services. This purchase is only strategic, probably meant to dry up the market.

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  7. The cost that MSFT paid for Skype is probably far lesser than the cost they would have to pay if they had to live without Skype, i.e, with Skype in the hands of MSFTs competitors. To me, this is the key takeaway. Unsaid, but true.

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  8. You guys are dorks.

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  9. Especially the guy who loves M$

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  10. Endless refinement no innovation. There goes MS.
    As stated by Joe, MS already has office communicator.
    Will MS do any step further besides the obvious
    – skype client for Xbox,
    – one account to link xbox+skype+hotmail (passport *again*)
    – more advertising (link conversation to bing searches)

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