>Roulston’s Technology Consultant on Microsoft’s 8.5 Billion Dollar Aquisition of Skype

May 16, 2011

>Roulston Research’s technology consultant Robert Rose gives his take on the Microsoft 8.5 billion dollar acquisition of Skype last week. He states “The Monday morning quarterbacking has begun and all the pundits are debating whether Ballmer’s deal makes any sense. So, nearly a week later – and I (like the rest of the market) have run through an entire range of Kubler-Rossesque emotions about the deal. First I had disbelief that they paid so much (and I still believe they did). Then, there was the outright incredulity at what an idiotic move it was. And, then, after I’d thought about it a bit more – and read a bit more I shifted my opinion. Here are the things that I believe about the deal.

1. They had to do it. Almost certainly the high price was because Ballmer felt like he had no choice. It was going to be Google – and that was just too much for Microsoft to stomach. They needed to make a move. I mean certainly nothing has changed (technologically) since the eBay sale. And, one might even argue that Skype 5 is getting really horrible reviews. But, in the end – Microsoft needs to start making bold moves and this was one of many I suspect are coming.

2. This has everything to do with Nokia. Putting Skype (and Windows Phone 7) on Nokia phones will make Microsoft instantly credible in the market for smartphones. And, it could theoretically keep Skype away from Google, Apple and Android devices. Although….

3. Licensing will be huge. Microsoft will have to monetize Skype and monetize it quickly – so I see them doing deals with (at least) Facebook – and possibly Google and Apple to put Skype applications on their platforms. This will be tricky since in some cases it’s there – and of course free… So – what that deal will look like is anybody’s guess.

And then… my way out there thought…

4. This tees up Microsoft to buy RIMM. Certainly this has been brought up before – and with RIMM really struggling right now and if the price gets low enough in the next 18-24 months (guessing in the $15/$20B range)… I could definitely see Microsoft pulling that out…. That would instantly make Microsoft the #1 mobile platform in the world – and certainly the leader in the business enterprise… Bing is now the “official” search engine for Blackberries – and I’d look for more deals like that coming soon.

Basically, if MSFT is going to have any hope for major growth – they MUST become the number 1 or 2 player in the mobile market. They HAD to buy Skype. They HAVE to be successful with Nokia – and at some point – unless Windows Mobile Phone OS takes off virally (which I’m not convinced it will) then they will need to buy their way in.”

Robert Rose is founder of Big Blue Moose and innovates creative and technical marketing strategies for his clients. You can view his website at http://www.bigbluemoose.net

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