“With Microsoft having confirmed its acquisition of Skype, sources tell TechCrunch Europe that Redmond outbid its closest rival, Google, by almost two-to-one,” Steve O’Hear reports for TechCrunch. “Meanwhile, Facebook is said to have never been in the running.”
O’Hear reports, “According to a source who claims knowledge of talks held between all parties, Google came in second at a price of $4B, while Microsoft will be paying $8.5B.”
MacDailyNews Take: Microsoft. We like their “strategy.” We like it a lot.
O’Hear reports, “Meanwhile, according to our sources, Facebook was never actually in the running to buy Skype and may have simply been inadvertently used to turn up the heat on Microsoft to push through a deal. Facebook was never approached, says one source, but that this didn’t stop rumors that the social networking site was “sniffing around”, a tactic often employed to close a deal.”
Read more in the full article here.
Om Malik writes for GigaOM, “It won’t surprise me if Microsoft comes in for major heat on this decision to buy Skype — and the software company could always botch this purchase, as it often does when it buys a company. The Skype team is also full of hired guns who are likely to move on to the next opportunity rather than dealing with the famed Microsoft bureaucracy. I also don’t believe Facebook and Google were serious buyers. Google, with its Google Voice offering, doesn’t really need Skype. In essence, I feel Microsoft was bidding against itself.”
Read more in the full article here.
MacDailyNews Take: The big dumb sales guy got played yet again.
May Ballmer remain…
[Attribution: MacNN. Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
Chairs are already flying in Redmond! You better believe it! ™ =;~B
To secure Skype’s death knell, all Apple has to do is add the following to Facetime:
1) Allow video over cell networks (as Skype does) so that Facetime becomes an anytime/anywhere app
2) Distribute a free Facetime program for Windows (as they do with iTunes).
Those two things will destroy Skype (if Micro$oft’s purchase hasn’t already). Without them, it will take a little longer…
They need to do these adjustments to FaceTime regardless. FaceTime is implemented so much better than Skype, but not being able to do it over 3G is beyond terrible. Makes it as bad as Skype for this reason alone.
Having to call people before I Skype and saying ‘Log in already’ is not much better either…
Isn’t the exclusion of FaceTime over 3G a carrier issue? I figured that it was one of those things that Apple had to initially release on WiFi and then coax AT&T and the rest to support on 3G. Darn uncooperative data pipes…
When Apple announced the iPhone 4 with Facetime chat, Apple said it “needs to work with cellular providers” for video over 3G. I wish these cellular providers would stop balking about Facetime when Skype is apparently free to do what it wishes.
FaceTime works on 3G with plenty of carriers. It works as expected here in Switzerland. This isn’t a technology problem, but a political one.. political being the carrier!
Not going to work. Skype is unique in the field of video messengers in that it can punch through any firewall out there and make a connection when all others are blocked. Some serious IT security staff at a company I once visited (defense contract) were quite surprised and embarrassed when an audio-video Skype call was successfully (and effortlessly) made from a MacBook Air hooked up to their internal, private WiFi, which was only supposed to allow web traffic (TCP on port 80).
Neither WVM, nor AIM (i.e. iChat), nor Yahoo messenger, nor ooVoo, or any other video messenger, can operate without at least some ports (Beside 80) open.
Ironically, I’m pretty sure one of the first orders of business for Skype under Microsoft will be to re-write some of that code to play nice with corporate firewalls, which will eliminate its primary advantage over others.
The bidding numbers are interesting. They sound made up though. How would Malik know what the final offers were?
Of interest is that of MSFT’s $50B cash hoard, $42B is overseas. So rather than repatriate that cash and buy US tech, MSFT bought Luxembourg based Skype. Smart, that.
Smart strategy or not, I still think MSFT will screw it up and kill Skype though. I’ll bet AAPL’s Facetime team couldn’t be happier right now!
Better to repatriate the money and pay some taxes than to blow it. Paying taxes is not always the worst thing that can happen. You can end up with nothing, which is where Microsoft is headed with that $8.5B.
Yes, that is correct. Tax implications although negative for funds repatriated back to the United States are far better than flushing the entire lot down the toilet.
Why the fire-sale push to unload Skype? Was the company burning cash at a rate too steep for the owners?
I think M$ doesn’t give a damn about anything other than the brand, the patents & the customer base. If I worked @ Skype I’d be circulating my CV- if not already.
Fire sale ?? they made 6bn in two years after buying it from ebay for 2.5bn.
That’s like saying I tricked my dog into eating that spoonful of peanut butter. No tricking necessary…he’s a dolt.
I’ve had several dogs who LOVED peanut butter. Best way to slip them a pill when needed.
Maybe your dog is smarter than you give credit.
Ugh! My dog is smart, but predictable. Ballmer, is predictable, but stupid.
You can’t script a better comedy.
At first I thought maybe MDN is just fanning this a bit…well, with SB, jokes seem to just write themselves. I am, however, a bit disappointed that none of the recent articles didn’t feature a Ballmer smug mug. C’mon…
Dang… you’d think a “sales guy” would know enough of the tricks of the trade to avoid getting played like that! Reportedly, Microsoft didn’t use any financial advisers at all in forging this deal – meaning Microsoft’s negotiators were either extremely confident, or extremely foolish. (No prizes for guessing which of those is more likely.)
My dog is always “sniffing around” the cat’s litter box. What sort of deal is he trying to close?
Cat scat is still full of protean. You should buy a better brand of dog food.
First it was Nokiasoft…now it’s Sykpe-Soft..what’s next.. Dell-o-Soft???
These clowns will be out of biz at this pace in what, say two years!!
What the heck are you doing Ballmer? What’s gonna happen with Windows Live Messenger? Why did you build and market WLM in the first place anyway? You failed that one and why would you think buying skype will be better? Skype is (was) a good product and now it looks like it won’t be anymore. C’mon Ballmer, do something right, for God shake! I used to like skype, but now I am really not sure of its future. You ruin it!
When you get accustomed to selling overpriced cr@p, I suppose that you might con yourself into buying someone else’s overpriced cr@p. Microsoft is so desperate that it is making incredibly expensive and foolish moves. That’s close to $10B between Skype and Nokia in the first half of 2011.
Well, Microsoft’s CFO has egg all over his face now… A story written just a couple days ago, Microsoft’s Biggest Acquisitions And What Happened To Them, concludes with this paragraph:
As CFO Peter Klein (shown here) told investors at a Morgan Stanley conference last week (transcript here), the company now looks at partnerships like the Yahoo and Nokia deals as a better way to get a leg up in relatively new businesses.
SB might have been in sales, but no one ever said he was any good at shopping.
So much for Skype. Tossed into my Trash. Sad to see you go. On to another technology…
Ballmer has yet again punched another massive new hole into the side of his sinking ship.
You know sometimes when you buy something, get home and realise, with a downer of a feeling that you’ve probably wasted your money and you’re regretting your buy?
Well imagine how that feels for Ballmer right now with these stories coming out about how he’s massively overpaid for Skype and the whole thing will ultimately crash and burn. It’s my guess that the $8bn pricetag will have brought on an unsettled stomach for him round about now and I suspect his stools will be watery for the next few days.
Ballmer’s bald head will become shinier on top after he’s realised what a dunce he is.
Bwaaaaaaaa! Haaa Haa Ha!!!!!!
Amazing that the Board went along for the ride .
If Microsoft takes $8.5 billion and hands it to Skype, and then Skype and its $8.5 billion become part of Microsoft, then Microsoft hasn’t really lost $8.5 billion. It’s just been transferred from one division of Microsoft to another.
I really hope you’re trolling
Not really, Skype’s shareholders take the money and run!
Not exactly. When you buy a can of tuna, you don’t walk away with the money you paid for it.
If you paid a hundred box for a 25cents can of tuna, is is very hard to sell it for 1 hundred.
Market value for skype was not 8.5 billions, but Microsoft pay that because Ballmer tough he was beating google bid that was less than a half of what Microsoft finally is going to pay.
Let me analyse it this way: You walk into Walmart & buy a can of dog food. You pay the cashier on the way out. That’s 8 bucks right there out of your pocket. Except in Microsoft’s case it’s $8 billion.
You take the dog food home and instead of serving it to your dog you eat it yourself. You’re still down 8 bucks but you probably would have saved 10 bucks not eating dinner at a swanky restaurant. That’s probably Microsoft’s thinking: buy something ‘cheap’ that comes with an existing customer base so you save time and money on not having to build that base out from scratch.
It gets interesting when you look at what happens afterwards – whether you poop out turd or gold. That will depend on how you’ve digested that dog food going down your alimentary tract. That’s how Microsoft will reason it out. They haven’t lost $8 billion if they can leverage that and gain $10 billion in terms of brand involvement, expansion of user base, sell more WP7 licenses off the back of Skype, whatever Ballmer will use to justify the purchase price.
Did he just said that he wasted an aditional 4 thousands and five hundred millions from the investors in a business he did not knew how much they were bidding for?
Can you get any more $tupid than that?
hahahahahaahahahahaaha…..
…aaaaaaaaaaaaaaaa…..
ahahahahahahahahahahahaa!!!
I hate to see an American company get “played”. Still, stupid is as stupid does.
Geeez Ball-me. Just cut down on the whale blubber that you snack on daily and you’ll make up that extra 4B you had to spend.
Ballmer….what a fool
Hmmm….
Let’s see…. $8.5 billion
Let’s assume that it was over priced by a factor of two.
That’s still $4.25 billion.
Let’s assume that half of that was for the installed customer base and Skype “name”.
That’s still $2.125 billion.
Let’s assume that half of that is for current contracts held by Skype (not customer base) and other international agreements still unfolding.
That’s still $1.0625 billion
That’s still about 4,250 man-years (at a net cost of $250k per year on average) worth of “work” they paid for. Is Skype’s code worth THAT much? Did anywhere near that much effort go into it?