Microsoft Skype $ 8.5 Billion Deal – Hurts or Benefits


The aforethought acquirement of Skype, announced and approved by the boards of directors of both Microsoft and Skype, as on May 10, 2011, for $8.5 billion in cash from the investor group led by Silver Lake, is the another leading affiliation of MSN against Google. A week before this alliance, lots of fore-sayings are there that Google and Facebook were both involved in buying Skype.

The blockbuster acquisition of Skype will set the free-calling service in front of exceedingly more computer users, advancing a technology that already troubles long-standing phone giants. Industry Analysts says that, Microsoft Skype Deal may affects its other affiliations such as with AT & T, Verizon and other Wireless Operators, as this affiliation threatens the business growth of those Wireless Operators.

Microsoft Corp. (MSFT) may have a tougher time convincing wireless operators to support mobile phones with Windows software after its $8.5 billion purchase of Skype Technologies SA, analysts said. ​

“Microsoft’s backing of Skype may be seen as a threat by wireless carriers such as AT&T Inc. (T) and Verizon Wireless because it could cut into voice revenue”, said Craig Moffett, an analyst at Sanford C. Bernstein & Co. in New York.

“It is kind of a head scratcher to me how Microsoft is going to navigate the complicated relationships that it has to have with carriers at the same time as it is repositioning itself as a potentially major threat to their wireless voice business,” Moffett said.

Nokia, the world’s largest mobile-phone maker by unit sales, said last month it plans to introduce devices running Windows Phone in volume next year.

Remember the Nokia MSN Deal that is intended to beat Google and Apple, so as to create an impact on Third Eco System.

“Cellphone giant Nokia has teamed up with Microsoft to build an ‘iPhone killer’. Standing alongside Microsoft’s chief executive Steve Ballmer, Nokia CEO Stephen Elop said that the Windows Phone operating system is now the software of choice for Nokia’s next generation of smartphones”.

Skype lets the users to do calls with data services, simply they make up this calls when surfing the Internet, alternatively making use of traditional voice minutes. Carriers usually billing customers for voice plans and data plans respectively.

“Using a data plan for voice or video calls can make them much cheaper for customers”, Moffett said. Google and Apple offer similar products.

This deal renders the software giant an online communications tool that will be interlinking through its Office applications, Xbox games and nascent smartphone line. But it had to compensate a high-pitched price. Any how, Skype owners will delight with a multibillion-dollar bribe, even though the company does not make a profit. Lets see whether this deal hurts or benefits for the business growth of Microsoft.

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