The Challenges And Opportunities For Microsoft And Skype

Microsoft will have a lot more opportunities to use Skype as a conduit for its other business, and to also use Skype’s voice and video chat services to enhance its own products. But will it all be smooth sailing for Skyposoft? Microsoft has laid out massive ambitions for Skype to enhance its existing business. In its statement announcing the deal, it names no less than six products and services where it hopes to integrate it: Xbox, Kinect, Windows Phone, the corporate IM service Lync, Outlook and Xbox Live. But operationally, will Microsoft’s culture mesh just as easily with Skype’s? Tellingly, perhaps, Microsoft is bolting Skype on as a separate division, and keeping its CEO, Tony Bates, at the helm of the operation.

Scale: Microsoft already has huge reach with its most successful products. Skype, with 700 million downloads, has demonstrated that it could give Microsoft even more -- and crucially in ways that it has been trying to move, across multiple platforms like Internet and mobile. No word on what kind of crossover Microsoft and Skype users there is at present.

Mobile: A huge opportunity here for Microsoft. The company is in the middle of revamping its Windows Phone platform -- the latest iteration will be launched in two weeks’ time -- and it’s looking for services that will both help it compete with and exceed what Google and Apple are respectively doing with Android and iOS.