Microsoft to pay $8.5 billion in cash to acquire Skype; what happens next?

Microsoft has officially announced its purchase of VoIP provider Skype for a whopping $8.5 billion. As we reported late last night, it's Microsoft's most expensive acquisition to date. This is a big, big gamble for Microsoft, but one that could ultimately pay off in several key areas. I'd expect to see Skype deeply integrated in the Windows operating system — with Windows Phone 7, Xbox 360, Office and Windows Live, at the very least. Microsoft's official stance is as follows:

"The acquisition will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities. The combination will extend Skype's world-class brand and the reach of its networked platform, while enhancing Microsoft's existing portfolio of real-time communications products and services …

… Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms."

At the very core of Skype's offering, we've got instant-messaging and video-messaging capabilities that overlap with Microsoft's Windows Live Messenger application. I'd hope that Microsoft would basically merge Skype and Windows Live Messenger together and then phase out the Windows Live Messenger name altogether since Skype is more well known.

We'll undoubtedly see calling, instant-messaging and video-conferencing features added to Microsoft's e-mail software, Outlook, along with similar features to promote group collaboration within other Office products like Word, Excel and PowerPoint.

Video conferencing via Xbox 360 consoles using the new Kinect camera is also a no-brainer. Microsoft already offers a feature called Video Kinect that lets you video-conference with your Xbox Live friends and Windows Live Messenger contacts, so I'd imagine your group of contacts would expand to include your Skype contacts too.

And then there's Microsoft's new Windows Phone 7 platform, which will basically find its instant-messaging, video-chatting and VoIP features powered by Skype. We may be in for some additional features as well: international calling, contacts synching and perhaps even instant-communication features added to Windows Phone 7's mobile Office apps.

Om Malik makes a nice point that Facebook will likely benefit from this deal, as Microsoft owns a decent stake in the popular social network.

It'll be interesting to see what will happen to devices from Microsoft's competitors that currently use Skype. Sony uses Skype on its PlayStation Portable gaming machine, and there are Skype apps for the iPhone and Android.

Microsoft has pledged to "continue to invest in and support Skype clients on non-Microsoft platforms," and in the interest of maintaining and building the Skype user base, it'd be smart to keep everything running normally. But Microsoft may decide it doesn't need to keep building Skype apps for outside platforms in the future, or it may build feature-restricted versions to try to entice people to use Windows-based products.

The $8.5 billion all-cash purchase is indeed a big, big outlay, but again, expect to see Skype making its way into just about every corner of Microsoft's business. Time will tell whether the move ultimately pays off.

Source: techland.time.com

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