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Business of Technology
Tue May 10, 2011
Analysts say Microsoft should keep Skype as-is in company's biggest-ever acquisition
Microsoft's biggest acquisition ever might have people in the region worrying about layoffs. Often when companies merge, redundant workers get pink slips.
But it sounds like employees of the Redmond tech giant don't have much cause for concern with Microsoft's $8.5-billion purchase of Skype.
It's the most Microsoft has ever spent on an acquisition. It's an all-cash deal. And it's for an internet phone service with lots of customers, but not much revenue.
"It's a very large business with a very large installed base. So, it'll be interesting to see whether Microsoft can actually extract the value, in terms of making it a more profitable business," says tech writer John Cook.
Cook has been covering venture capital for more than a decade - now as the founder of Geekwire.com, a new technology news startup.
He say the deal was the talk of his table at the annual Technology Alliance luncheon in Seattle. He doesn't think Microsoft employees have much to worry about – because the company is acquiring technology and workers that it doesn't have yet.
But what about Skype users – do we need to worry about big changes to the internet phone service that's become so popular? Two sources at his table agreed one one thing:
"Probably the best thing for Skype would be for Microsoft to just leave it alone and have it operate more as a stand-alone entity. And if it does that then, it could be more successful."
Cook says past examples are a mixed bag. The airline ticketing tool Farecast is still very useful as a feature of Microsoft's search engine, Bing.
But that's just one in a history of deals that were often designed to squelch competition, rather than to bring innovative new tools to consumers.
Mark Anderson on Technology