For Microsoft Corp. (MSFT-Q25.67-0.16-0.62%), the only thing better than acquiring Internet communication powerhouse Skype is ensuring that Google and Facebook didn’t.
Under immense pressure to make up ground to its rivals in the smart phone and mobile communication market, the Redmond-based software giant has opted to spend $8.5-billion (U.S.) on Skype, a company it hopes will immediately vault it back to the top of the leaderboard, thanks to Skype’s 107 million active users and presence on almost every type of personal computing device on the planet, from desktops to iPhones.
Skype offers users free or relatively cheap Web-based audio and video calls. The all-cash deal – the largest in Microsoft’s 36-year history – ends months of negotiations that are believed to have involved heavyweight suitors such as Google and Facebook. Both rivals had entered the bidding war for Skype with the same strategy as Microsoft, hoping to integrate audio and video-calling services into their existing products.
However, Microsoft appears to have presented the richest offer, and is now left with the daunting but potentially lucrative task of building Skype’s services into everything from instant messaging to e-mail to productivity software. Perhaps most importantly, Microsoft will also try to use Skype’s technology to boost the appeal of Windows-powered smart phones, which currently lag behind devices from companies such asApple Inc. and Research In Motion Ltd.
