One year on, the value of Microsoft's Skype purchase remains mysterious

Skype logoThis week, the New York Times interviewed Tony Bates, President of Microsoft's Skype Division (and CEO of the company when it was independent). In the interview we learn much about Skype's independence of the larger Microsoft organization—to the extent that Bates uses a MacBook Air, and Skype employees have Skype security passes, rather than Microsoft ones—but little about how the software giant plans to make use of its purchase.

Microsoft's Skype takeover was announced a year ago, and closed seven months ago. The decision largely created puzzlement and confusion. Explaining the purchase, Redmond promised Skype integration across a range of products—Xbox, Kinect, Office, Windows Phone, and Lync—along with continued support for the existing cross-platform Skype client. But so far, the acquisition has borne no fruit, with the only a lacklustre Windows Phone client to show for Microsoft's $8.5 billion. The puzzlement remains.

The good news is that Microsoft purchase appears to have done little to Skype's perception in the market. Since the purchase, Skype's usage has grown considerably: monthly active users are up 26 percent over the last seven months, to nearly a quarter of a billion. The Skype division itself is growing too, with around 400 situations vacant.

Microsoft has also invested to make the Skype network more robust, and possibly a little more friendly to corporate users. Skype uses a peer-to-peer network, in which some unfortunate systems are nominated as "supernodes" and have to handle extra network traffic. Microsoft has been installing thousands of dedicated Linux machines to operate as supernodes, which both makes the network more robust—end-user supernodes have failed en masse after problems with bad updates—and possibly more palatable to corporations that are unwilling to use their own bandwidth for other people's communications.

The Times notes that Microsoft is still planning to integrate Skype with Lync, in some capacity, and that Xbox 360 integration is also still on the cards. It adds that the latter is unlikely to ship this year.

The interview also notes that Microsoft will be producing a Metro-style version of Skype for Windows 8. This is obvious, of course—how could Microsoft not?—but it's hard to see it making a difference to the bottom line. There's already a Skype client for the Windows desktop, and a Skype client for the iPad; creating a new one for Windows tablets will fill a market gap, but doesn't transform either Skype or Windows. Indeed, it's hard to see how it could: while the absence of Skype would be a huge black mark against Windows 8, its presence just means that Windows 8 is in the same position as any other platform of consequence.

Overall, though, the value of the Skype purchase remains as unclear as ever. Microsoft paid a lot of money for the communications company: shareholders will still be wondering why.

Source: Ars Technica

Tags: Microsoft, Skype

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