As Microsoft agreed to hand over $8.5 billion to capture the voice and video online calling company Skype, the computing giant essentially bet its future on its ability to integrate conversation and video into the company's myriad services already familiar to millions of consumers.
"When I look at the price tag, I go 'What?'" said Harry Wang, director of mobile research at Parks Associates, a tech research and consulting group. "$8.5 billion for revenue less than $1 billion a year? The long term, incremental value makes sense but it's not exactly a match with the price tag."
By securing Skype's 600 million registered customers, Microsoft aims to scale up its range of online services to take on the Google threat.
"The user base will definitely boost Microsoft's online presence," said Wang. "That's one of the key battlegrounds for them to gain in the future and they have to be there."
"It looks like Microsoft got into a bidding war, that Google and Facebook tried to acquire Skype," said Wang. "To use the Mastercard tagline, keeping competitors away from your key asset is priceless."
"The deal reminds me of the eBay purchase of Skype about six years ago," said Wang. "You draw a nice picture, you hope it will turn into reality, but maybe it'll turn out Microsoft has made another dumb move with this acquisition."
From the article, "Microsoft Bets Its Online Future On Skype" by Amy Lee
