Seven BIG Thoughts On Microsoft Buying Skype

$8.5 billion comes out to about $50 per active user

1. I have to confess that I had an inkling something was up when I suggested that Microsoft buy Skype in the newsletter a couple of weeks ago. I’d been hearing from some of my sources that the two companies were talking, I just didn’t think it’d happen quite so quickly — or even at all given the interest Skype was also getting from Google and Facebook (and probably some other names that haven’t emerged). 

2. Microsoft probably overpaid — but it’s too early to tell. $8.5 billion comes out to about $50 per active user (they claim about 170 million “connected users”). That’s a lot of value to have to try and extract given that most Skype users don’t pay anything at all to use the service. Even so, the strategic value in owning Skype is considerable and not to be underestimated. It’s just going to be a challenge to justify the price that was paid unless they’re really aggressive in — and especially successful at — leveraging both the technology and the social network to create new revenue opportunities. There are the obvious things they can do to integrate, but, given that we’re just at the cusp of this big transition to IP-based communication, it’s hard to tell just how large those other opportunities could be and, as a result, it’ll be a long time before we can tell whether Microsoft spent too much.

Read more at gdgt

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.


Tagged In

home-us microsoft skype