Andy Ihnatko: Why did Microsoft Buy Skype?

Tuesday, May 10, 2011
By OP Editor

Why would Microsoft offer to pay $8.5 billion dollars for Skype, a barely profitable company?

Steve Ballmer Microsoft Skype

Andy Ihnatko describes the three reasons for big tech company A to buy company B.

  1. “Company B is profitable and underpriced.”
  2. “The acquisition allows Company A to ‘level up’ instantly without having to spend years engaged in a long, expensive and uncertain dungeon crawl.” (Example HP buying failing Palm).
  3. “Company ‘B’ has such lovely parts… or has a product that Company ‘A’ is tired of trying to compete with”

Microsoft’s reason to buy Skype is most likely the third:

“There’s also a hell of a lot of value in simply owning one of the world’s largest social-media networks… Microsoft just bought a fairly comprehensive database of who knows whom all over the world.”

OP Editor note:

  • Skype has over 663 million registered users in 2010.
  • Facebook has over 600 million active users as of January 2011.

Hum, time to look for Skype alternatives.

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Tags: Microsoft

2 Responses to “Andy Ihnatko: Why did Microsoft Buy Skype?”

  1. Don

    The only company that out ‘Microsoft’ than Microsoft itself is Google, the evil Apple thief’s, the both of them!

    1

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