Microsoft is said to have bought Skype for $8.5billion and it may not go down as the smartest business moves in history. In fact it may go down as one of the worst. Analysts have been left shocked by the news, claiming that Microsoft have made a vast overpayment. Slipping into the record books, the deal is Microsoft's most expesnive aqusition beating the previous leader advertisement compantyQuantive who cost $6billion.Skype is a popular and succesfull service with good potential and it's high cost may be due to the fact that the likes of Facebook, Google and Cisco Systems having also been interested in acquiring it.
But a bit of number crutching provides some very worrying data for Microsoft. Check out the financely history of Skype and Microsoft-
2005- Ebay buy it for $2.5bn
2005- Bing stops being provitable for Microsoft (and still isn't now)
2007- Ebay knocks $1.4bn off Skypes estimated value and sells 70% of its shares
2010- Skype makes record loss of revenues- $859.8million
2011- Skype has a staggering debt of $686 million
2011- Bing's loses at $8bn
But then of course, numbers work both ways. Micrsoft could potentialy bring Skype to 660 million users worldwide with integration from Xbox 360 and Kinect to Office. Plus, Skype already has 663 million registered users. But with the cost of this intergration likely to be in its millions (possibly billions) if Microsoft do see a profit it's going to be a long time before they see it. It's hard to see what Mircosoft could really do to boost Skype's profits, the most logical step would be to charge users for calls, but this would cause a slump in the number of users. Only time will tell, but this looks like another Microsoft clanger in the shadow of Apple’s rise to the top of the tech rich list.
One thought on “Microsoft Buy Skype: Their Worst Business Decision Yet?”
Articles like this make me laugh, the author clearly knows why it is a GOOD thing for Microsoft to purchase Skype but he obviously gets cheap thrills from putting Microsoft down thus he writes what can only be described as an idiotic and falsified article. Microsoft buying Skype is possibly one of the best decision’s they have ever made. Good vision Microsoft, good move.