The Future of Skype

Well, you heard the news: Microsoft is going to buy Skype for $8.5 billion. It's the most money Microsoft has ever spent for anything.

Analysts - the ones who think the deal is a good idea - say that Microsoft can use Skype's voice and video technology to build into its products, like Windows and Kinect.

But that's such a weird analysis, since Windows and Kinect already have voice and video built in. Hello? NetMeeting? Windows Live Messenger?

The difference, of course, is that nobody used those programs. At least not compared with the 170 million people who use Skype every month, including close to 9 million of them who actually pay for the service. (You pay, for example, if you want to make voice calls to telephone numbers, rather than other computers or phones.)

"It's an amazing customer footprint," Ballmer said in a Times interview.  "And Skype is a verb, as they say."

And so is "Google." I'd be willing to guess that this purchase was as much about "look what we've got, Google!" as it is about Microsoft's technology strategy.

Every time some big clumsy corporate behemoth buys a popular consumer-tech product, I cringe. It almost never works out. The purchased company's executives take a huge payday; promises are made all around that they'll be allowed to continue operating independently; and then, within a couple of years, the product disappears altogether. A little star of the tech sky is snuffed out, for absolutely no good reason.

Yahoo bought GeoCities,,, MusicMatch, Konfabulator and Upcoming. AOL bought CompuServe, Netscape and Xdrive-all gone or irrelevant now. Cisco bought the Flip camcorder, and then killed it last month.

But what about Microsoft? Its acquisitions list includes the Sidekick (Danger) service, Groove, Placeware, Massive, LinkExchange and WebTV. It has shut down all of them.

(As my Twitter follower @jfhaft notes, "Microsoft = King Midas in reverse.")

I guess what I'm saying is that I'm skeptical. This feels more like an 800-pound-gorilla move than anything that will wind up benefiting you.

No wonder my Twitter followers, on the night the Microsoft-Skype deal was announced, promptly began into a hilarious round of Mock-the-Microsoft. Their tidbits included:

@okc_dave: They must have found some extra change in the couch.
@BeckJeffrey: I guess we can look forward to Skype 2011 in a few years.
@loyalmoses: We'll have to start saying "Microsoft me" instead of "Skype me". but saying that makes me feel dirty.
@macsmarts: Microsoft buying Skype is like the Captain of the Titanic using his last moments to send out an SOS for a replacement radio.
@Sandydca: At least all the tech-support calls to Bangalore will be at a reduced rate.
@Vikster: At first, MSFT weren't sure. But Skype had them at unpatched security vulnerability."
@LunaticSX: The 1st details MS will announce about their plans for Skype will be integration with Kin phones, Connectix webcams, & WebTV.
@cjkm: Skype Condescending Starter Edition; Skype Unpaid Blogger Edition; Skype Cubicle Jail Edition; Skype Telco Replacement Edition.
@Checkw: Now Windows can call customer support on its own!
@xriva: Microsoft Skype: The Blue Screen of Voice.
@bryanroutledge: To dial, press Ctrl-Alt-Del.
@2jase: MSFT buys Skype? It's ChatRoulette with all chambers loaded.
@ericfgould: Now I'll have to login using Windows LiveHotmailWhatever acct that I haven't used since Internet Explorer 6.
@tiffbrownolsen: Does that mean it's going to stop working properly When I pleaded with my followers to find something positive to say about the deal, @psdlund racked his brains and came up with: "At least it wasn't Cisco."

(The best tweet of all may have come the next morning from Frank Shaw, Microsoft's top PR guy. "@fxshaw: I can tell david pogue is not up yet because he's not retweeting snark about ms and skype.")

Sometimes, these purchases pay off. A few of Microsoft's acquisitions live on, even if they're minor or unprofitable: HotMail, Visio and TellMe, for example. And the $200 million Microsoft paid for PlaceWare led to something useful: NetMeeting, the voice-and-video-chat program that competes with Skype. (Oh, wait.)

So add Skype to the list of acquisitions that took a beloved, popular consumer product and folded it into a big behemoth corporation. Will Microsoft wind up shutting it down, as it has so many other acquisitions?

Let's meet back here in two years and compare notes.


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