Microsoft was dead without mobile, barely at the table. Skype means Microsoft is now all in. Can they take the table? Only if Skype swallows Microsoft.
According to the WSJ, MSFT will buy Skype for over $7 billion. I’ve blogged before about Skype preparing to lead the disruption of enterprise communications and video. Well, consider it disrupted. Of course, Skype will likely be done disrupting, but I suppose they did their job.
I don’t this MSFT paid over $7B to play defense, cannibalize/extend Lync, gain residential voice, strengthen SMB or add to their unified communications story. No, I think this is about mobile, especially mobile video.
MSFT is dead without mobile. So they bet large on Nokia and now double down to the tune of $7B+ with Skype, and they’ll likely bet more. Great moves? No, but the Microsoft hand is forced. Play big or go home. Now Skype needs to swallow MSFT.
[updates with numbers] Why does Skype need to swallow MSFT? Skype has 170 million users, growing at a 40% rate. Skype has 80-100 million active users (my estimate). None of those users are anchored by a specific pipe provider or platform provider. This makes Skype the only widely deployed carrier independent, platform independent communications solution in the world. If Skype can maintain that, if Skype can swallow MSFT to the degree that they can continue to independently innovate and disrupt, then MSFT wins. Wins big.
More likely we’ll get three mobile islands, especially for mobile video. Apple iOS/Facetime, Android/Google Video, Windows Phone/Skype. Big islands – mobile video, voice, IM, presence. Even if MSFT does that – turns the big two (Apple, Google) into the big two – then that’s worth the price as well.
Unfortunately for Microsoft and Skype, they will have to execute flawlessly – almost unheard of for an acquisition of this magnitude from a company of MSFT’s size. Skype would have to swallow MSFT, in this specific space, rather than the usual Borg effect we see in M&A like this.Google+