8.5 billion? DOLLARS?

New is breaking across the interwebs of Microsoft’s purchase of VoIP provider Skype, the audio and video conferencing tool that has always had a hard time defining a truly profitable business model.

Much of the commentary I’ve read thus far is either very critical of MSFT paying that much for Skype, fearful that MSFT will do to Skype what it does to, well, everything they make (MS Windows Vista Ultimate Home Small Business Premium Deluxe anyone?), or that MSFT will make Skype proprietary/paid/non-free.

The more interesting question, I think, is what does MSFT get from the deal?  Andy Ihnatko has a good take on the different reasons “Very Big Tech Company A [buys] Tech Company B.”

Microsoft makes operating systems, business software, and consumer hardware and Skype helps them out in all three of their businesses. Now, Windows can offer its developers a videoconferencing toolkit for enhancing pretty much anything they’ve got going; Microsoft Office now has fundamental tools for business conferencing and online collaboration, and the Xbox becomes a phone network.

As Kris pointed out before, good marketing and good business are much more than just good ideas; they’re all about the execution.  Unless you can turn those great ideas – and in MSFT/Skype’s case, the great potential – into flawless execution, then you’re just stacking up scribbled-upon cocktail napkins … which is fun, right up until the point that you run out of money.

Hopefully MSFT and whatever remains of the Skype team (assuming that the MSFT lawyers negotiated their payout clauses correctly) can turn the potential into some good execution, because I for one would love to see them actually deliver on the promise.1


  1. As an avowed Apple fan-boy, you might read some sarcasm in this sentence … I can assure you that there is none. I honestly am looking forward to what MSFT can do if they can just get out of their own way first.
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  1. Skype: An option for a brain drain « Marketing Muster

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