Tuesday, May 17, 2011

Q: Did Microsoft Buy Skype to Block Google?

A: Probably.

Q: Did they buy Skype to enter the telecom market and siphon market share and market cap from the telcos?

A: I hope not. As far as I'm concerned telcom - as it has existed - is a dying industry. Carriers are imposing caps and overage fees to hold on to whatever profits they can. Buying Skype assumes that cellphone and smartphones are for voice call - not anymore. Today telephony is about data, texting, and apps.

I, Cringely » Blog Archive » Why Microsoft bought Skype - Cringely on technology:
Ballmer and his company are at a tipping-point and he knows it. Microsoft is still big and powerful and rich, but no longer is it the biggest, most powerful, and richest. It is no coincidence that Department of Justice oversight of Microsoft’s anti-trust consent decree ended this week, because Redmond is nowhere near the threat to competitors that it used to be. The company can go from here either up or down and Ballmer’s fear is that the direction will be down, down, down. Microsoft will still make plenty of money but that might be from milking declining markets.

Ballmer needs a new market to milk.

Maybe that new market is telecom. Here is where I might write a paragraph about the Microsoft vision of unified communication where they’ll suck market share and market cap from the old telcos. That’s happening already and if someone is going to benefit, why not Microsoft? But I’m not writing that paragraph because I don’t think Ballmer or Microsoft are actually that smart. They have lost confidence. Microsoft no longer believes it controls or even can control the game. Worse still, they don’t have confidence that they even know the rules. So they’ve adopted a defensive posture and this Skype acquisition is more of a block than anything else.

Microsoft bought Skype to keep Google from buying Skype.

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