May 11, 2011, 11:23 AM — Still trying to to figure out whether Microsoft made a good move buying Internet phone and videoconferencing company Skype for $8.5 billion?
Don't worry, nobody really knows for sure. But there are opinions and predictions aplenty in cyberspace, and ITworld has gathered some here so you can find one or more that suit you best.
Let's get started. Up first we have Forrester Research analyst Andrew Bartels, who in this Reuters article questions the hefty price Microsoft paid:
"It does strike me that by almost any dimension Microsoft is overpaying. There's some strategic benefits but I have a hard time seeing them being anywhere close to what they're paying."
Indeed, most analysts mentioned the high cost of the deal, the most expensive acquisition Microsoft has ever made. In the same Reuters article, Patrick Becker Jr., a principal at Becker Capital Management, took it to the next step:
"To go out and spend $8.5 billion makes me wonder about internal execution. They obviously felt they didn't have the product in house to compete with Skype, Google and Apple."
Gus G. Sentementes, who writes a tech column for the Baltimore Sun, is more optimistic:
Many seem to be skeptical that Microsoft can generate value -- and profits -- from the deal. I, for one, think Microsoft can find some interesting synergies and integrations with the Microsoft Kinect and the Xbox, and Skype. And don't forget, Microsoft is now a major partner with Nokia, and could make Skype a major player on smartphones, though it has to be sensitive with the mobile carriers.
Speaking of which, Microsoft depends on AT&T and Verizon to sell its Windows-based phones, which will feature Skype's free Internet-calling service, which wireless carriers fear will cost them revenue. In this Bloomberg article, Sanford C. Bernstein & Co. analyst Craig Moffett says:
"It is kind of a head scratcher to me how Microsoft is going to navigate the complicated relationships that it has to have with carriers at the same time as it is repositioning itself as a potentially major threat to their wireless voice business."
It was another threat to its own fortunes that compelled Microsoft to buy -- and possibly overpay for -- Skype, according to technology analyst Rob Enderle, quoted in this Associated Press article:
"Either Microsoft or Google could turn Skype into an international standard.