Should Microsoft make good on its intentions to acquire voice over IP provider Skype for $8.5 billion, it will surely boost the company's competitive stakes with both Google and Apple.
Under the terms of the agreement, Skype will become a business division within Microsoft, headed by Skype CEO Tony Bates. Skype's services will be meshed with a variety of products in Microsoft's portfolio, including its Lync unified-communications platform, Outlook and Xbox Live. On a more strategic level, Skype's huge customer base could give Microsoft considerable influence within the evolving VOIP and video-conferencing market.
In a May 10 press conference, Microsoft CEO Steve Ballmer suggested that his company would continue to support Skype on "non-Microsoft client platforms."
He also painted the deal, the biggest in Microsoft's history, as fundamentally in keeping with the company's DNA: "This Skype acquisition is entirely in keeping with our ambitious, forward-looking, irrepressible nature."
While rumors have circulated for days that Skype was eyeing a partnership or acquisition with another tech giant, Bates--onstage beside Ballmer--sidestepped the question whether Google or a similar player had made a deal for the company: "We were very focused on our IPO, we had an unsolicited offer [from Microsoft], we made an evaluation."
According to Ballmer, Skype services will find their way onto everything from television screens, thanks to integration with Xbox Kinect, to smaller smartphone displays via Windows Phone--all pending regulatory approval, of course.
The Skype acquisition also places Microsoft on yet another collision course with Google, which also offers VOIP services. In May 2010, Google purchased Global IP Solutions, or GIPS, which makes software for processing high-definition audio and video over the Web, for $68.2 million. A few months later, the search-engine giant rolled out a service allowing its customers to make phone calls via Gmail.
Apple also offers video conferencing via its FaceTime service for iOS. The combination of Skype, Google and Apple has lifted the number of American adults participating in online video calls to nearly 20 percent, according to a 2010 survey conducted by the Pew Research Center's Internet & American Life Project.
For more, read the eWEEK article: Microsoft, Skype Deal Takes Aim at Google, Apple.
This article was originally published on 05-10-2011