As Skype Skips Through Approvals — What’s the Deal With the Deal?
As expected, the European Commission approved Microsoft’s $8.5 billion acquisition of Skype late last week.
Next, the deal for the popular Internet communications company — which had previously been cleared by U.S. regulators — is likely to officially close later this week (paperwork!), said several sources close to the situation.
Now, of course, comes the hard part — which is whether Microsoft can successfully integrate the more nimble Skype into the belly of the software beast and allow it to thrive.
Some key questions:
How smoothly can Microsoft integrate Skype into its existing products, such as its unified communications platform, Outlook mail and Hotmail, Office, Messenger and Xbox Live? And, perhaps most of all, Windows Phone devices?
That said, will Skype also get to do what it needs for its own success beyond Microsoft? That includes working with mobile rivals Apple and Google, who now dominate the smartphone market, as well as many others. It has already managed to buy GroupMe group messaging start-up for $85 million, just months after its own acquisition in May.
And can the division — which will be led by Tony Bates, Skype’s CEO and now a Microsoft president — operate successfully located mostly away from the power center of Redmond, Wash.? Skype has a substantial office in Silicon Valley, as well as key engineering units in Estonia and Stockholm.
In that vein, will Microsoft be able to hold on to new talent like Bates and Skype’s geek squad, all of whom have substantial choices elsewhere? Like a lot of large tech companies, Microsoft is not known for being able to hold on to those who come in from the outside, in large part due to its insular culture of longtime execs.
In other words, how big a welcome will Microsoft’s other powerful presidents — such as Windows division head Steven Sinofsky — give Bates and company?