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It’s been tempting for media and analysts to look at Microsoft’s $8.5 billion acquisition of VOIP provider Skype as an assault on the Google Voice cloud calling service.
Google Voice has perhaps a few million users, while Microsoft would virtually own the VOIP market, as Skype has some 700 million worldwide users. It is believed that between 150 million and 170 million people actively use the PC-to-PC calling service.
However, some analysts believe Skype’s peer-to-peer architecture limits its scalability going forward.
With Skype, Microsoft essentially paid a ton of money for a company that doesn’t make a whole lot of money. Gleacher & Co. analyst Yun Kim said only about 8.8 million of Skype’s users actually pay for the service.
So what has Microsoft purchased Skype for? To take a page out of Google’s playbook. Google is gradually layering Google Voice throughout its Web services. The company added Google Voice to Gmail last summer.
One day, you might well expect to do a search on Google.com and see links to click-to-call businesses with Google Voice. The mechanism already exists in Google’s click-to-call ads, though users are using their mobile phones to make those connections.
Microsoft shows an inclination to do the same cross-platform integration with Skype, pledging to weave Skype throughout products.
An obvious starting point is augmenting Microsoft Lync unified communications for businesses with Skype, but other services such as Live Meeting, Outlook, Bing, Windows Phone 7 and Xbox could all benefit from Skype’s communications properties.
If Microsoft successfully stitches Skype into Outlook or Lync, it might provide a more lucrative suite than Google Apps. Microsoft might also integrate Skype capabilities into Bing, potentially drawing more users to its search engine.
Google Execs Not Worried About Microsoft Owning Skype
Global Equities analyst Trip Chowdry has a different take.
If Microsoft doesn’t manage to kill Skype with its classic internal politics-look how Hotmail, Danger and Aquantive suffered from lack of investment-they still have a challenge in maintaining and growing an old-fashioned P2P network in an era defined by cloud computing.
P2P, Chowdy noted, lacks the collective intelligence capabilities that characterize cloud computing.
“From a pure technology point of view, I would say Skype is the past and Google Voice is the future,” Chowdry told eWEEK. “If I ask you what the next things you can see in Skype I can bet that neither you know, neither I know, and neither Microsoft knows because there is no step beyond what you see right now because of the P2P architectural limitation.”
Conversely, Google Voice’s construction as a Web platform allows it to dovetail nicely with the rest of Google’s products. This gives Google Voice an advantage of scalability even as it lacks Skype’s massive user base.
Privately, Google executives feel the same. Though no Google executive would discuss the purchase on the record at Google I/O last week, most told eWEEK off the record that they felt Microsoft paid a lot of money for Skype with no guarantee of getting the money back.
Ironically, Google seriously gunned for Skype years ago. There were talks that Google and Facebook were talking with Skype again recently, yet most feel Google was simply trying to drive up the price for Microsoft or Facebook.
“It is likely that Google gamed Microsoft to a higher price, that would be consistent with the firm’s personality,” said analyst Rob Enderle, who consults with Microsoft. “Recall they did something similar with the spectrum auction a while back.”
“The risk, however, is if Microsoft pulls off convergence, and Microsoft has been working on that for over a decade now so has a lot of stuff already in the hopper, they could define the next technology wave.”
Google doesn’t seem too concerned with that prospect.