Microsoft purchased Skype for $8.5 billion. Did they overpay? Absolutely not! It’s a fantastic deal considering the number of users Skype has. 663 million at last count (170M active or connected users and 9M paying)!
Just to put that in perspective, Facebook with its 600 million users is valued at 100 billion dollars! True Facebook’s users are different than Skype’s and Skype does not have as much demographic data about its users as Facebook has. But there’s one key difference. Skype is used for business purpose AND it has 9 million users who pay for using its services! That’s a big deal!
Skype is in a different league as far as communication is concerned. Yahoo Messenger, AOL Messenger, Google Talk they are all primarily used for personal communication. Skype is used in big way for business communication. And we are not talking about chat or instant messages. We are talking about voice and video conversations.
Although every IM service lets you do voice and video calls between computers, nothing comes close to Skype in terms of quality and reliability of the service. The unique P2P approach behind Skype makes it super successful. I know people who run their entire businesses over Skype. I know people who don’t have a real phone number or who forward their real phone number to Skype.
And Skype works everywhere. On PCs, on Macs, on mobiles. Flawlessly!
So coming back to the topic, what would Microsoft do with Skype? If I was Microsoft CEO, this is what I would do with Skype –
- 1 What would I do with Skype if I was Microsoft CEO?
- 2 What I definitely would NOT do with Skype as a Microsoft CEO?
What would I do with Skype if I was Microsoft CEO?
Kill Windows Live Messenger
I will kill the Windows Live Messenger bundled with Windows. It will be painful but no point in supporting two competing products at the same time. Google did that with YouTube and killed Google Video. Yahoo didn’t do that with Delicious and kept developing Yahoo bookmarks as well. Delicious lost its charm and Yahoo had to sell it.
Transfer Windows Live users to Skype
Automatically transfer all Windows Live users to Skype. That means people can login to Skype using their Windows Live, MSN or Hotmail ids. And when they do so, all their contacts would also be available in Skype. Make the transition for existing users painless.
Leverage Microsoft Enterprise Customers
I would leverage Microsoft’s enterprise customers and offer them Skype as an alternative to WebEx. WebEx is big in enterprise space. Skype is not. Microsoft is big in enterprises. Many major companies use Microsoft Exchange and other enterprise products. Refine the Skype technology, back it up with support and a Service Level Agreement and corporations will adopt Skype. Not just for internal communication but also for web conferencing.
Offer Web Conferencing Service Free with Skype
I would offer a GoToMeeting like service for free with Skype! GoToMeeting charges $50/month for screen sharing and web conferencing. Skype has screen sharing capability although not as good as GTM. I would refine it and offer it for free! That will break GTM’s back! I am Microsoft! I can afford to offer services for free that other’s are charging outrageous amounts for! Another nail in Cisco’s coffin!
Bundle Skype with Phones & PCs
Microsoft already has partnerships with mobile device and PC manufacturers. I would bundle Skype with every phone and PC shipped. I would get in partnership with carriers to offer some free minutes for Skype usage. That way Microsoft can still stay relevant in the mobile space which is quickly becoming a bastion of Apple and Google. The most important application on mobile will still be voice and video communication. Microsoft can make a big impact in that space with Skype.
Build Skype Web Version
I would build a web version of Skype. Which has complete functionality of the Skype client. So users don’t have to install Skype client.
Use Skype for Targeted Advertising
I would harness the data of the 600 m+ users to better target them with advertising. Skype is a hidden social network. Skype’s data combined with already rich data of Hotmail/Live users, is a gold mine for any marketer! Imagine ads like a 5 second ad message when you initiate a call or a small ticker ad at the bottom of the screen when you do a video call. Don’t forget MS already has an advertising deal with Facebook. Advertising provider for two of the most used modes of communication on the Internet! Boy it gives me Goosebumps! I can make Google sweat!
What I definitely would NOT do with Skype as a Microsoft CEO?
Merging Skype & Live Messenger
I would not merge Skype into Live messenger or make it a part of MS Office.
Make Skype a Windows Only product
I would not make Skype a Windows only product. The major reason for Skype’s success is that it runs efficiently on every platform. I would continue that effort and not force people to use Windows to use Skype.
Making Skype Obese
I would not turn Skype into a feature rich obese product like many other Microsoft products and lose focus on its core functionality. People user Skype for a specific purpose, to communicate. I would keep it a communication tool – I won’t turn it into a TV or yet another Facebook/Twitter client or an RSS reader. Let plugins add those capabilities.
Kill Skype as a Brand
Last but not the least I would not kill the Skype brand! I would not even add the Microsoft moniker in the name. Many people get spooked by that name. I’d take a cue from Google and keep it Skype like YouTube. People would know who owns Skype. Skype has its own identity, I would preserve it!
So, there you have it – Do’s & Dont’s if I was a Microsoft CEO