Microsoft’s purchase of Skype

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Microsoft has purchased Skype for $8.5 billion; the largest deal in the software giant’s long and storied history.

Before the deal was finalised, industry insiders believed Google and Facebook were thinking of spending up to four billion dollars on Skype, but the company had been considerably undervalued (not only does it have a yearly revenue of over one billion dollars, but purchasing Skype also keeps the VoIP software out the hands of one of Microsoft’s key competitors. Skype are also considering an IPO).

At a press conference, Microsoft outlined three reasons the purchase will benefit Microsoft.

•tSkype’s immense size – 170 million users and counting
•tThe fact that over 40% of Skype’s users’ activity is video based
•tThe major role Skype plays in mobile communication

And as thrilled as we all are that the billionaires at Microsoft will seemingly get a little bit richer, most of the common man’s concern lies in how Skype as a program will be affected by this sale.

There is speculation that, especially with the initial public option, the fantastic and free service which is Skype will be compromised. So how will the sale affect Skype users long term? YOURLifeChoices investigates.

Skype will remain primarily free

A small percentage of Skype’s 170 million users actually pay for the privilege. Although we cannot predict the future, it does not look like there will be more associated costs with using the service, although there may be a huge jump in the number of ads on Skype, especially targeted video ads.

This may be exacerbated specifically by the fact that Google has implemented its own Skype-like program into its product range, Google Talk. Google Talk (or Google IM) is a VoIP protocol instant message program that is very similar to Skype. It is available on Blackberry and Android based phones and comes pre-loaded on Nokia N900 phones. Now that Skype has some greater competition from the big players in the technology world in Google, its owners Microsoft are now furiously working to recoup the $8.6 billion they have spent on purchasing the program, making more advertising is inevitable.

No more server outages

Anyone who uses Skype can remember the massive meltdown Skype experienced last December. Now with the major muscle of Microsoft behind them, you can expect a more consistent service from Skype.

Smartphones market heats up

It’s no secret that both Nokia and Microsoft (who have teamed up) are almost non-existent in the Smartphone market. Now, their latest coup, Microsoft can use Skype to their advantage and create cross-platform technology (sync tablets, Windows Phones and computers) to start to gain a foothold.

The influence this deal could have on the Smartphone market could be huge. After all, Smartphones are notorious for their exorbitant call charges. If people find a way to use Skype’s video, voice and text services on their smartphones correctly then there is a possibility that a new market of people who are sick of paying large bills for Smartphone communication will be created.


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