Et tu, eBay?

Today, one of the biggest technology acquisitions was announced: Microsoft buys Skype for $8.5 billion. I have read conflicting analyses of the deal: some people applaud it as a way to improve Microsoft’s offerings in internet communications, while others say that Microsoft grossly overpaid.

I have just one question: how will Microsoft make a success out of Skype when eBay failed?

Yes: eBay previously bought Skype, then later sold it off at a loss. At the time eBay bought Skype, people said that eBay would get great value from synergies: buyers could chat instantly with sellers online and improve the online shopping experience. Except these so-called synergies didn’t materialize, and eBay sold Skype at a loss.

So what’s new now? Ah yes, more promises of ‘synergies’ with Microsoft’s Windows Messenger, Xbox, Windows Phone 7, Lync and a number of other technologies that few have heard of. Except, Microsoft already has chat, voice and video calling in these products today. In other words, Skype is redundant with a wide range of existing Microsoft technologies.

So what did Microsoft buy, exactly? A brand? $8.5 billion seems like a lot to pay for a brand that’s not exactly a household name.

And why will Microsoft make Skype profitable when eBay couldn’t? At least eBay didn’t have the technology; with Microsoft, it seems like they spent a fortune to buy technology they already had.

(I am aware that Skype had a patent issue that was resolved after eBay sold them. Again, if Skype was so valuable after the patent issue was resolved, eBay could have bought them back.)

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One Comment on “Et tu, eBay?”

  1. Maria Says:

    Personally, I think Microsoft will ruin the company and the product. I can’t seem them making it better, and if it isn’t better, than how can it turn a profit? $8.5 billion. There are so many better things to do with that kind of money.


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