What Will Happen When Microsoft Inevitably Kills Skype?
Given the company's track record, Microsoft is bound to neglect Skype, in which case I propose another tech giant should buy it.
After Microsoft simply walked away from its purchase of aQuantive, leaving a whopping $6.3 billion on the table as if it was chicken feed, you have to assume that Microsoft can and probably will do the same thing with Skype.Then what?
The Wikipedia page listing Microsoft's mergers and acquisitions is pretty eye-opening. First, you'll notice that there are a lot of merger and acquisition deals listed. We must assume there are many that are not listed. The second thing you'll notice is that almost all of the companies disappeared without having made much of an impact. In the case of companies such as aQuantive, there was zero impact and this cost the company $6.3 billion.
In many instances, you can see the acquisitions may have been good for an idea or some personnel but not real products. Visio is one example of a real product that the company kept alive. Microsoft's acquisition of Forethought in 1987 became PowerPoint and its 1997 acquisition of Hotmail still exists as MSN Mail or Live Mail or whatever the company is calling it.
There are a few for sure, but when you really examine the list, it's clear that Microsoft spends money like a drunken sailor. It squanders the shareholders' resources in a horrendous manner.
It's obvious to me that most of these companies never had to be acquired. They had CTOs who invented technologies and were looking for ways to cash out. Microsoft could have tracked down these people and lured them away with a $5 million signing bonus and a 10-year deal with a fancy office and staff.
I suppose it was easier to buy the company for $100 million and let it fall apart. I'm sure the mergers and acquisitions attorneys love Microsoft!
Whatever the case, it is now apparent to me that Microsoft will walk away from the $8.5 billion Skype operation the same way it did with aQuantive.
You have to wonder why Microsoft would buy Skype in the first place. Did it somehow fit in with an initiative that already had similar technology and was pointless? Or was it that each user was worth $30 or so?
Skype has revenues approaching a billion dollars but this could result in enormous losses for all we know. Supposedly, there are some profits. According to sources, Microsoft paid 32 times the operating profits, which is generally different than actual net profits. That means the company made around $265 million in operating profits.
Although there is potential here, Microsoft seldom manages potential well, as we've seen with PowerPoint. It's hardly changed in almost 30 years.
So, you can be sure the company will abandon Skype like it has abandoned everything else. But what will happen then?
At first, I thought that we'd be stuck with all the mediocre SIP clients that stink by comparison. On second thought, though, I'm confident that Skype will linger under new ownership or be revived by the founders.
Much of the world has become dependent on Skype and nobody feels too comfortable that it's now owned by Microsoft, considering the company's track record. Here's a thought: sell it to Google. That would be interesting, no?
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