9:20am

Tue May 10, 2011
The Two-Way

Analysts: Microsoft Will Build Skype Into All Sorts Of Products

Now that it's been confirmed that Microsoft is buying Skype for $8.5 billion, a couple questions arise:

Where does Skype fit into Microsoft's plans?

And will Microsoft succeed where Skype hasn't so far — by making money from the Internet telephone service? Or is that not the point?

A few earlier analyses:

-- "With Google and Facebook also reportedly sniffing around, the strategic value to Microsoft could — if it pulls off the integration challenge — make the deal look almost reasonable. For Microsoft more than either of its counter-bidders, Skype could form the glue between its PC, mobile and gaming businesses that it has hitherto lacked." (The Financial Times)

-- "The biggest reason for Microsoft to buy Skype is Windows Phone 7 (Mobile OS) and Nokia. The software giant needs a competitive offering to Google Voice and Apple's emerging communication platform, Facetime." (Om Malik at GigaOm)

-- "Buying Skype — a service that links users via Internet-based telephony and video — gives Microsoft a recognized brand name on the Internet at a time when it is struggling to get more traction in the consumer market." (The Wall Street Journal)

-- "The $8.5 billion, all-cash purchase is indeed a big, big outlay but, again, expect to see Skype making its way into just about every corner of Microsoft's business. Time will tell whether it ultimately pays off." (Time magazine's TechLand)

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