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Microsoft ? Skype enormous deal, creates shock waves to world markets

Microsoft is expected today to close a -approximately 8bn dollars-deal with Skype who is hugely popular worldwide. Some market analysts claim that the price is too high, while others remain sceptical, trying to guess the reason for MS’s decision to conclude the deal. Stay tuned to http://www.naro.gr/ειδησεις/επιστήμη.html for all latest news regarding the Microsoft-Skype deal. But lets take a closer look on the two «sweethearts»:

In 2005, auction giant e-Bay  bought Skype for 2.6bn dollars, with the sole purpose to incorporate Skype into their auction software, thus allowing the people participating in their auctions, to call to each other ahead of their close. At the same time, Google has been reported to be interested in buying Skype, but finally  decided against it. Now back to the Skype – eBay deal, unfortunately the deal faltered,  after facing severe  implementation problems,  and e-Bay was forced to abandon this idea, before selling out 70% of Skype in 2007.  Since then, Skype never really recovered (in terms of profitablity), having barely bumped along on profitability and sales numbers. The company remains still,  a well known brand with 663 million users worldwide, however debts have risen dramatically, reaching a total of 686 million dollars, creating the ultimate contradiction: although Skype is  considered the most popular internet phone service (663 million Skype users) worldwide, it was not making any money!

On the other hand, Microsoft, already has a VOiP service called Lync, which combines email, instant messaging and voice communication via computer, since 2005. This proved to be a huge flunk and it cost Microsoft over 8bn dollars (since 2005).

But why Microsoft decided to go ahead with such a deal? Om Malik of GigaOm, upholds MS’s decision to buy Skype because it can blent in  with other Microsoft products (such as Docs.com). Ok, i can go with that, but still the 8bn dollar price is considered «extremely high» by any standards. Well, perhaps it has something to do with the 663 million Skype users,  or the fact that many multinational companies, news agencies, tv channels (Reuters, NBC News, Fox etc), prefer using Skype instead of microwaves and cellular for local coverage. Also, Microsoft can implement Skype within the upcoming Windows 8-a nice add on tool! But perhaps the greatest reason in favour for buying out Skype should be, Microsoft’s phone mobile software. Indeed, Mobile carriers have a hostile tendency towards Skype, because it allows people to make calls for free, via data links rather than voice connections. Perhaps Skype can bring to Microsoft the competitive advantage they were so desperately looking for in the mobile market. Imagine new Nokia- Microsoft  smartphones with Skype technology allowing you easily to send instant messages, merge emails and spoken communication-all in one!…tempting idea eh?

Michael Orfanos is Marketing Manager for naro.gr

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