Microsoft’s Skype Deal: Winners and Losers
This deal is an advantageous move for Microsoft mainly for the following reasons:
• It would give Microsoft a boost in the collaboration market because of Skype’s voice, video and sharing capabilities.
• It would give them a service that can help with adaptation of future versions of Windows Mobile OS.
• It would support Windows Phone 7 and Nokia. Microsoft needs a competitive offering to Google Voice and Apples communication platform – “Facetime”.
The other winners of the deal:
• Skype Investors
Skype’s investors bought in at a $2.5 billion valuation two years ago and are selling for $7 billion ($8.5 including debt)
• Marc Andreessen
Marc Andreessen is a partner at Andreessen Horowitz, one of the investors in Skype. He sits on eBay’s board and was key in putting the deal together.
• The Skype founders
Niklas Zennstrom and Janus Friis are the founders of Skype. They got $1.19billion.
• Skype executive team
Skype’s executive team is mostly made up of talent brought in from Cisco and other big companies by the new investors, only a couple years ago. They almost certainly won’t stick around for the Microsoft era and are probably already shopping for private islands and yachts.
• Facebook
Instead of having to actually buy Skype to keep it off Google’s hands, its longtime partner and shareholder Microsoft did it on Facebook’s behalf. Skype would be a great potential partner for Facebook, giving them added video and voice chatting capabilities.
• Nokia and Windows 7
Google has Voice, Apple has FaceTime. Now Microsoft has Skype.
• eBay
eBay gets 30% for its stake into the company
The losers are:
• Cisco
Cisco will has a strong rival in enterprise conferencing. A big source of growth for Skype was always going to be business conferencing. It will take a hit on Cisco’s biggest and most successful acquisitions: WebEx, a video conferencing suite.
• Google
Google was probably never really interested in buying Skype. But it was interesting in bidding up the price at one point. If Microsoft is smart about Skype, they can use it to compete better with Google.
• Index Ventures and Mike Volpi
Index Ventures, the most prominent European VC firm and an original investor in Skype, was slated to invest in the Skype spinoff, but got pushed out by the Skype founders’ lawsuit. In particular Mike Volpi, a former top Cisco exec and CEO of Joost, the Skype founders’ next venture, was sued by the Skype founders and booted out.
