Microsoft announced it would be purchasing VoIP provider, Skype for $8.5 billion on May, 10 this year. It is considered as Microsoft’s most expensive acquisition to date. Last Thursday, European Union approved the Microsoft’s proposed acquisition of Skype.
Many people express their confusion about why Microsoft, which has already owned IM and video chat in Windows Live, would like to buy Skype, which experienced nearly $7million loss in 2007.
However, I think buying Skype is a long-term business strategy of Microsoft:
- Skype reinforces Microsoft to compete with Facebook Chat, Google Voice and Apple Facetime. Although Microsoft has already had Windows Live, Skype is more dominant and owns more loyal users (approximately 170 million) with its worldwide name recognition and well-known brand.
- It provides Microsoft with great working relationships, for many companies who intend to transit themselves to the LTE-based network, seek to corporate with Skype for its proven technique and operation experience in the future.
- Skype provides low-cost or free phone calls online using their computers or smartphones. Skype updates the standard telephone network by creating voice and video calls via the Internet
Now, Microsoft has already announced Windows Phone 7 and it will continue to explore the future versions of Mobile operating system. Therefore, this acquisition strategy will assist to promote their products and make them perfect and advance.
1. Links of picture: http://www.physorg.com/news/2011-10-eu-microsoft-skype-takeover.html