Windows Live Chat © —An Inquiry into Microsoft’s Newest Acquisition


Potential logo? Is this how the new Skype logo will look?

In case you hadn’t guessed by now, I’m actually talking about Skype, and its recent buyout from Microsoft. Purportedly having cost them $8.5bn., it was Microsoft’s biggest takeover yet—but I ask, why?

Skype has a long and colourful history. Starting out in 2003 and originally called Sky peer-to-peer, soon after it was abbreviated to Skyper and again soon after that the ‘r’ was dropped because ‘Skype’ domain names were easier to come by. In April 2003, the first Skype domain name was registered, and the software entered its initial beta phase. It wasn’t until October 2005 that anything else happened: the ground-breaking purchase of the Skype brand by eBay took place for $3.1bn. Skip forward a few years (and a few controversies) to 2010 and things hit a wall; eBay went public and sold 70% of Skype’s ownership for a value of $2.75bn.—less than they had paid for it.

Enter, stage right: Microsoft, paying “three times more than the company’s valuation in 2005″, (The Guardian reports the figure to be $8bn) and “more than thirty-two times the profit margin per annum” than the software was currently making. The Financial Times was worried it would create a new tech bubble and many other sources are questioning its purchase including The Economist.

Microsoft, however, knows exactly why.
Here are some facts and figures for you:

  • In 2010, Skype had 13% of the international calls market.
  • By January 2011, the platform had 27 million users, this rose to 29 million by the next month.
  • It was in February 2011 that Skype made an announcement, it was dropping Skype for Windows Mobile and that it would not create the software for Windows Phone 7.

In less than 3 months, Microsoft went from having a partial market share to the position where it was about to lose a major player in its selling point. The Neowin blog says “Instead, they are going to be focusing their resources on devices running the iPhone OS, as well as Android.” and sales would drop if their phones didn’t have it. Microsoft was going to lose billions of dollars if they didn’t do something. So they did what they do best—bought it out.

The fact Microsoft still have their share of the Skype-compatible market means that such a powerful company can push it out. This includes on their Xbox consoles (another huge market which was missing out before) and anything else that will bear its logo in the future. Maybe they will go ‘Windows’ with it and issue licenses to manufacturers so they can use it with their devices; some televisions are currently shipping with the software!

All-in-all, it’s no wonder Bill Gates wanted the deal to take place as he said in an interview with the BBC. Without Skype, Microsoft, his beloved software child, was set to lose even more money in markets where it was already struggling. It can now take this software on to bigger and better things (hopefully) with its (evidently) big money backing.

What are your thoughts on the takeover?

This entry was posted in Feature and tagged , , , , . Bookmark the permalink. Post a comment or leave a trackback: Trackback URL.


  1. Posted 06/05/2013 at 9:08 PM | Permalink

    I’m really enjoying the theme/design of your weblog. Do you ever run into any internet browser compatibility problems? A few of my blog audience have complained about my website not working correctly in Explorer but looks great in Safari. Do you have any ideas to help fix this issue?

  2. Posted 30/06/2013 at 9:38 AM | Permalink

    Hmm it seems like your website ate my first comment (it was super
    long) so I guess I’ll just sum it up what I submitted and say, I’m thoroughly enjoying your blog.
    I too am an aspiring blog blogger but I’m still new to everything. Do you have any tips for novice blog writers? I’d definitely appreciate it.

  3. Posted 24/12/2013 at 1:05 AM | Permalink

    Hi Dear, are you really visiting this site on a regular basis,
    if so afterward you will absolutely obtain fastidious experience.

  4. Posted 02/07/2014 at 9:50 AM | Permalink

    Hi! Would you mind if I share your blog with my zynga group?

    There’s a lot of folks that I think would really enjoy your content.
    Please let me know. Many thanks

  5. Posted 02/07/2014 at 10:33 AM | Permalink

    When someone writes an piece of writing he/she keeps the idea of a user in his/her brain that how a
    user can know it. Therefore that’s why this article is great.

  6. Posted 08/07/2014 at 5:21 PM | Permalink

    Hi! I simply wish to give you a huge thumbs up for the excellent
    info you have here on this post. I’ll be coming back to your website for more soon.

  7. Posted 22/07/2014 at 9:43 AM | Permalink

    Having read this I thought it was extremely enlightening.

    I appreciate you finding the time and effort to put this informative article together.
    I once again find myself spending a significant amount of time both
    reading and leaving comments. But so what, it was
    still worthwhile!

  8. Posted 28/01/2016 at 3:10 PM | Permalink

    Hello, always i used to check blog posts here
    in the early hours in the break of day, as i enjoy to
    learn more and more.

  9. Posted 25/09/2017 at 9:13 AM | Permalink

    The first time I read it I was very impressed :) Do you experience it by yourself or with friends?

Post a Reply to tripod for camera Cancel reply

Your email is never published nor shared. Required fields are marked *


You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

  • Welcome to TechRant…

    We are a group of techies from emerging students to full blown professionals who are enthusiastic about technology related subjects. Everyone has opinions and feelings about things, sometimes stronger than others. On TechRant, we will be sharing those opinions, and have a good ol' rant! We may also do non ranting type articles, like news, reviews, tutorials, tips and tricks, how-tos and even the odd interview.

  • Authors

  • Categories

  • Archives