Microsoft Paid $8.5 Billion for Skype, Now What?

You’ve probably heard by now that Microsoft bought Skype for $8.5 billion. Most people think that Microsoft overpaid for Skype, and quite frankly it is irrelevant. Microsoft wanted to “guarantee” their acquisition of Skype (didn’t want to risk Google ousting them on the deal), and a couple bucks more doesn’t really matter if they have a solid plan on how they can take advantage of the acquisition and make billions more.

The first thing that comes to my mind in terms of Skype playing a strategical role in the future success of Microsoft is a FaceTime type competitor for Windows 7 Phones. If Microsoft can market the Skype technology (with some new features/innovation) being native on Windows phones, they can possibly recapture some of the lost market share in their benefit. Since Skype is already used by many millions, when marketing it, it wouldn’t be difficult for people to understand whatever they try to throw at consumers.

Of course there is Skype available as apps on Android and iPhone’s, but like I said, Microsoft will need to add on “special” functionality for Windows 7 Phones to one up the other two. And since they own Skype now, nobody is stopping them from doing so.

I also think Microsoft will tie in Skype with Xbox. This would be another somewhat obvious play on their part, but they could possibly make the gaming experience a lot better if it included live video streams of sorts, or maybe even virtual reality. Xbox already has Xbox live, so it could be a natural fit for that, however, there are also many problems with putting live video streams of people playing video games on another strangers tv. Seen the movie Gamer? Imagine if something like that was implemented in Xbox in the future. (Ok, maybe not that extreme, but perhaps along those lines).

More realistically, they could come out with some Xbox implementation to make the counsel more appealing as a set top box. The market of set top boxes is a thing a lot of companies are trying to get into and succeed at (Google, Boxee, etc.), but nobody has really nailed it yet. Throw in some Xbox kinect, with a little Skype, and some games, and it might be worth buying for trendy households.

It could turn out that Microsoft does something extremely out of the blue, like partner with major television manufactures and implement some kind of webcam in all new televisions. In fact, with the whole smart tv phenomenon, this wouldn’t seem far fetched. Skype would turn into a living room thing, with families, instead of just computer to computer or mobile. Microsoft has the abilities to land these deals and this would be a major stepping stone for Skype’s future. Grandparents wanting to see the whole family across the country before the nine o’ clock news? Done. 

In the end Skype has millions of users, and if you add millions of users with the right creativity, the outcome might be something very profitable. If all the cards fall in the right place, the $8.5 billion Microsoft paid for Skype will seem like a drop in the bucket.