Monday, May 9, 2011

Will Microsoft Get its Mojo Back with $8.5B Skype Purchase?

Microsoft needs a shot of Mojo and Skype could be part of the answer. In an Internet era where Facebook, Android, iOS, iPhone, iPad and Skype are uttered hundreds of thousands of times a day on Twitter and the blogosphere, getting a brand called Skype certainly should help Microsoft's brand recognition in the consumer space.

Of course, that assumes this deal goes down as reported in the online edition of the Wall Street Journal.  Assuming it does, Microsoft gets a hot consumer brand that it should be able to leverage its Bing Search engine against (advertising revenue).

For enterprises, the question could quickly become: Should I (pay for) Lync or should I Skype. Clearly the spin will say you can do both, but for many Skype is an attractive easy to use alternative to a Microsoft Lync, whether it be Lync on-premise or Lync Online.

Of course, the problem with acquisitions these days at Microsoft is that resistance is futile. The big divisions at Microsoft don't take kindly to threats to their dominance, so the question is, what happens to Skype after the deal goes down? Does Skype remain somewhat independent or will they be absorbed.

Either way, this deal will give some pricing leverage to enterprises on the Unified Communications and Collaboration (UCC) front. Skype is good enough on many fronts so that Lync doesn't have to be licensed for all users in the enterprise and that could mean a big savings for both the CIO and Business Unit GMs. Just as in Content Management, it is time for enterprises to start segmenting users and their UCC needs vs a one size fits all approach.

So overall, this deal will be viewed as more of a  Microsoft tries to get their (Internet) Mojo back than anything else. Microsoft needed to do something in UCC and this deal is far cheaper what they were looking at paying for purchasing Yahoo as recently as 2008. Whether Microsoft really leverages this Sykpe acquisition with the rest of its products remains to be seen.

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