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Summary:

If one thing was expected from Microsoft paying $8.5 billion for Skype, it was the criticism of the deal. I spoke with Steve Ballmer and Tony Bates about the deal and what comes next. Here are my notes from that conversation.

ballmer

If one thing was expected from Microsoft paying $8.5 billion for Skype, it was the criticism of the deal. Given Microsoft’s history of botching previous mergers, I wouldn’t blame folks for being skeptical. I believe desperate times result in either desperate actions or heroic acts. So, we shall see.

Nonetheless, I’m betting that Microsoft knows that it is skating on thin ice and will make this Skype deal work. This morning, I spoke with Steve Ballmer and Tony Bates about the deal and what comes next. Here are my quick notes:

Steve Ballmer

  • We wanted to partner with them but in late March/early April decided that we wanted to buy them and brought in a bid.
  • We loved Skype’s growing consumer customer base.
  • Tony Bates will report directly to Ballmer, and Skype will operate as a division of Microsoft.
  • We will support the non-Microsoft platforms, and it is in our best interest to do so. That is part of the strategy. Real diversity of devices is the key value proposition of Skype franchise.
  • This is about putting users first and giving them technologies they need.
  • This is about communication and will be part of our communication efforts.
  • Windows Phone 7, Outlook, Messenger, Kinect, X-Box Live, Hotmail and Lync are all getting Skype support.
  • We want to be a scale provider of communication technologies.

Tony Bates

  • The acquisition speaks to the strength of the business and the team
  • I realized that while we can do it alone, the opportunities are much larger between us.

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  1. With the exception of Bungie and Hotmail, I can’t think of any Microsoft acquisitions that have improved the company as a whole.

    1. A few others that added to the company:
      Forethought
      Exos
      Rare
      Farecast

    2. I lived in Bellevue for a few years, and was always surprised Ballmer didn’t get more criticism for his leadership of MS over the last handful of years. I give him and his team credit for the splurge. Skype, oddly enough, reminds me of one of their programs, with all the issues I’ve had with it over the last year. :-)

  2. This is not just about MS. Acquisitions in general are very hard to make them work. But I think MS have their chance. I would not be surprised if this is an heroic move from Ballmer (at last???). Think about Skype coming de facto on every WP7 phones and on every PC. Think about that user base. Automatically more than 1 billion people. This could be huge if properly executed. Apple’s FaceTime looks tiny in comparison…

    1. Skype has had the chance to land on every mobile phone, but they’ve crippled their client in most cases to do deals with carriers (Verizon) when the carriers had little leverage with them.

      How will Microsoft have more leverage to deliver the full range of Skype features (e.g., VOIP calls over 3G) when carriers can hold WP7 hostage?

    2. michael Travis carothers AK Wednesday, May 11, 2011

      I accept this courageous venture for the ultimate prosperity of all peoples of this great planet. May the force be with us!

  3. For Ballmer it is desparate & for Tony heroic :)

  4. Consider O365 at http://office365.microsoft.com. Integrating video conferencing with voice conferencing in the Enterprise Technology market is a win. O365 will save money and extend the existing Operating systems.

  5. Microsoft is going to clean house on getting that long xXx $ gUaPeY $ , now that they have Skype under their belt. Talk about Cam’ron of Dipset & Microsoft keeping the “puters puting”…lol

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