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Microsoft + Skype + Nokia?

7:00 AM -- Fresh from its partnership with mobile phone giant Nokia Corp. (NYSE: NOK), Microsoft Corp. (Nasdaq: MSFT) is set to splash up to US$8 billion on buying Skype Ltd. , according to the Wall Street Journal. (See Nokia, Microsoft Team Up, RIP Symbian & MeeGo: Nokia Ties Future to WP7 and MWC 2011: Microsoft & Nokia Court Carriers .)

Skype had been planning an initial public offering for earlier this year, but rumors have circulated recently about potential buyers for the VoIP service provider. That Microsoft is in the mix was first reported by GigaOm. (See Skype: In Numbers.)

If the deal happens, it will be the third time Skype has been acquired: eBay Inc. (Nasdaq: EBAY) bought the VoIP company for $2.6 billion in 2005 and then sold a majority stake in the company in November 2009 for about $1,9 billion. (See eBay Completes Skype Sale, EBay Buys Skype for $2.6B, Former eBay CEO Defends Skype Buy, Skype Goes on the Block and eBay Still Likes Skype.)

So how is Skype worth $8 billion to Microsoft now? The price sounds insanely high. That's more than nine times 2010 revenue, which was $860 million. Didn't eBay pay too much for Skype six years ago? (See Skype Targets $1B Revenues, CES 2011: Skype Steals International Scene and Skype's the Limit.)

The bigger question, though, is what Microsoft might do with Skype. Could the VoIP application become part of its mobile platform and find itself embedded in Nokia's smartphones?

Don't rule anything out...

— Michelle Donegan, European Editor, Light Reading Mobile

paolo.franzoi 12/5/2012 | 5:05:43 PM
re: Microsoft + Skype + Nokia?

 


I seriously think you need to update your view of Skype.  They are not really only VoIP.  You can get video services and IM from them as well.  They also have a problem with scammers.  I have had at least 3 "Nigerian" scams (although they came from Ghana) and periodic messages about how my PC (and I am on a MAC) is hacked and to click the link.


seven


 

stelabokun 12/5/2012 | 5:05:43 PM
re: Microsoft + Skype + Nokia?

Yep, and also, think of how great such a deal would be in those markets/regions where Nokia has a large market share and where voice services are too expensive for users –  here are some hints: Mayans and Aztecs, Burritos, Copacabana, Salsa, Samba, Mojito….:)

NetworkOptimizer 12/5/2012 | 5:05:42 PM
re: Microsoft + Skype + Nokia?

My hunch is that they bought Skype for the 200 million or so users it has. Now, you have a client running on all these systems which could be used to push more data.


VoIP/Instant Messaging/Video Chat/Video Streaming(Netflix competition)/Music service/Video games/Social networking (FB)/Deals (Groupon competition).


The opportunities are plenty when you have can have a client running on different types of machines (Windows/MAC/Linux/Smart phones/Tablets).


This is a smart move for microsoft and it's actually cheap compared to valuations of FB/GroupOn/Twitter. They can also integrate this in their XBOX platform.


We need to wait and see their execution ( MSFT doesn't have a good track record).


 

Michelle Donegan 12/5/2012 | 5:05:38 PM
re: Microsoft + Skype + Nokia?

thanks, Stela. The opportunities in Latin America are interesting, for sure. The Pyramid research note has more on that here:


http://www.pyramidresearch.com/points/item/110510.htm


But you mentioned Mojitos... and Burritos... so now I'm distracted...


 


 

cool-head 12/5/2012 | 5:05:36 PM
re: Microsoft + Skype + Nokia?

With the expectation of increasing broband penetration with LTE (in many countries), I expect this is going to be good move for microsoft. Countries like india would get huge customer base on broadband with LTE, and skype services will be more valued.

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