The U.S. Department of Justice recently approved Microsoft’s $8.5 billion bid for Skype, putting the software giant a big step closer to finally closing the deal for the VOIP provider. With this crucial regulatory approval, Skype is on track to become the Microsoft Skype Division and be led by its current CEO, Tony Bates.
Now the debate on whether or not the deal is good for stakeholders, including both companies, shareholders, consumers, and others, has fired back up. Some say Microsoft’s bid is bad news for users around the globe and might just hurt the software giant over the long term.
Others say it was a smart move on Microsoft’s part and should benefits most stakeholders. Though both sides make a compelling argument, full inspection of the deal reveals that Microsoft made a smart move by acquiring Skype. Here are the reasons why.
1. It improves Windows Phone 7
One of the first assurances Microsoft made following its announcement that it would acquire Skype was that the VOIP service would be integrated into Windows Phone 7. Microsoft’s mobile platform has not caught on with consumers, and iOS and Android have been performing quite well. With deep Skype integration, current Windows Phone 7 owners will benefit and Microsoft itself might be able to attract more users to its platform.
2. It was on its way to integration anyway
Skype is undoubtedly a fine service, but when one considers its potential as an option integrated into other platforms, including mobile devices and consumer goods, it becomes all the more appealing. Simply put, Skype is better when it’s an additional feature in an already appealing product. Skype knows that. Microsoft knows that. Even Skype users know that. Look for Microsoft to continue to integrate Skype across a wide array of products going forward.
3. It’s all about Kinect
When Microsoft launched its motion-gaming peripheral, Kinect, last year, the device was slight on features but big on potential. With Skype’s help, it might just be one of the most appealing peripherals in the living room. After all, Microsoft says that it will integrate Skype with Kinect,allowing people to engage in video chatting from the living room with other users. Kinect and Skype will be the killer combo in the living room over the next several years, and Microsoft and consumers will benefit from that.
4. It’s like FaceTime, but better
Apple’s FaceTime video-chatting service is arguably the best in the business right now. Users on iOS-based devices and Macs can engage in video chats at no charge. So far, Microsoft hasn’t been able to respond. But with Skype’s help it will, potentially making the software giant’s offering much better than Apple’s. With Skype, Microsoft can offer a video-chatting feature that works across platforms, including Windows PCs, Windows Phone 7 devices, Macs and Kinect, among others. Skype’s video chatting doesn’t have the limitations that FaceTime does, and as long as Microsoft keeps that in place, everyone will benefit.
Theres Potential Benefits for Business
5. Microsoft won’t demolish it
There is some fear among critics thatonce Microsoft takes control of Skype the software giant will eliminate all the fine things that made the VOIP service so appealing in the first place. That fear, however, is irrational. Microsoft has already made it clear that it won’t eliminate what made Skype special, including free calling and cheap international calls. The only thing Microsoft will do is make its existing products better with Skype’s help. By keeping Skype the same, but making its own services better, Microsoft is able to appeal to the VOIP provider’s current user base as well as those who haven’t yet tried it out.
6. The enterprise could benefit
With Skype’s help, Microsoft will likely deliver some new enterprise solutions for corporate customers who desire a new communication platform. Look for Microsoft to double down on video conferencing for the enterprise as well as Skype’s voice communication. Though consumers might be the focus of Microsoft’s Skype acquisition, the enterprise is still an important concern for Microsoft.
7. It won’t hurt non-Windows users
Following Microsoft’s acquisition announcement, Skype users on Mac OS X and Linux immediately became concerned that the software giant would no longer support their operating systems after the deal is approved. However, Microsoft has said that it will continue to support non-Windows platforms with Skype. Will new features come to the Windows version first? Sure. But that’s already the case with Skype. As long as Microsoft keeps its promise and supports other platforms with future versions of Skype, no one should be scared by this deal.
8. It should help with Facebook
Prior to Microsoft’s announcement that it had acquired Skype, some reports surfaced claiming Facebook wanted to buy the VOIP provider. Though that never materialized, Microsoft’s acquisition played in Facebook’s favor. Microsoft currently owns a small stake in Facebook, and the companies work together closely. Facebook desperately needs a Skype-like communication platform to round out its own offering, and what better way to get one than by partnering with Microsoft on Skype? For the more than 500 million Facebook users around the globe, Microsoft’s Skype acquisition might prove to be good news.
9. A Google-Microsoft fight is a good thing
Aside from Facebook, Google was also reportedly among the companies that wanted to acquire Skype. Since Google was outbid and Microsoft has a platform that it can use to take on Google Voice, another front in the battle between the two tech giants has opened. Though some hope for Google to win and others want to see Microsoft prevail, one thing is certain:A battle between Microsoft and Google is good for everyone. The companies will spend cash to innovate, they’ll help the entrepreneur community by acquiring smaller firms, and they’ll continue to find ways to improve their current services.
10. It gives Skype a better chance
Although some believe that Microsoft will do more harm than good with Skype, the fact is, the software giant came in at the right time. Google and Apple are both rapidly innovating in the communications market, and the firms were encroaching upon Skype’s territory. With Microsoft’s help, the VOIP provider now has the billions of dollars in cash it needs to stay one step ahead of the competition. Prior to Microsoft’s acquisition, Skype simply didn’t have the resources it needed to take on Apple and Google. Now that it will after the deal is closed, everything has changed in the marketplace. There is now a three-way competition going on for dominance in next-generation communication.
Editor’s Note: This story has been corrected to state that the U.S. Department of Justice, and not the Federal Trade Commission, approved Microsoft’s acquisition of Skype.