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    Microsoft-Skype Follows Google’s Carrier Disruption Bid

    By
    Clint Boulton
    -
    May 18, 2011
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      There’s so much being said about the Microsoft-Skype deal still that I thought I’d call attention to two good pieces. One I agree with, one I don’t.

      Let’s start in the affirmative.

      Kevin Fury, formerly designer at Google and currently at Mozilla Labs, has a great, 35,000-foot view of how Microsoft and Nokia, and Apple and Google before them, have been making moves to disrupt the reviled telecommunications hegemonies in the United States.

      While most of us have been talking about Microsoft will get Web cred to better compete with Google and Apple, Fury noted that carriers may be the ones Redmond is targeting with the VOIP buy, as well as its Windows Phone and Nokia partnership.

      “Microsoft has a good mobile OS, they just bought a soft carrier in Skype, and whether the rumors of a potential acquisition of Nokia pan out or not, Microsoft’s recent deal with Nokia seems to go beyond a simple OS licensing agreement. If Microsoft is trying to turn the cellular industry on end, it’ll start out with Nokia hardware built to Microsoft specifications. No other hardware manufacturer would likely risk pissing off their major customers (AT&T, Verizon, etc.) with a move that so directly challenges the entire mobile industry.“

      As for Apple, Fury pointed to Apple’s FaceTime video chat application for the iPhone, iPod Touch, iPad 2, and Mac OS, as well as its secret deal with voice recognition provider Nuance as “a clear move toward carrier independence.”

      Google, Fury noted, obviously aimed for carrier disruption with Google Voice and pushig Verizon Wireless to the brink of war in the FCC 700MHz spectrum auction. Google also tried to sell the Nexus One without carrier help; it didn’t work but it signaled intent.

      “Add Amazon in as a wild-card and you have four new mobile telephone creators and carriers, all with ample experience with routing large amounts of data, passion for bringing new capability to their customers, and a consistent resentment of working with partners who get paid beyond what they bring to the table. And if any one of these companies moves to cut out the carrier, the others will race to compete at the same level.“

      Internet companies as modern telcos. What a great idea. As someone who groks the Web more than the traditional, nuanced and regulatory-laden telco space, I’m totally down with Fury’s idea. Of course, we’ll be advertised and marketed to death, but that’s another story.

      The second piece is Robert X. Cringely’s post on the Microsoft-Skype deal, which he claims was necessary to keep the VOIP giant out of Google’s clutches. Cringely wrote:

      “Were Google to buy Skype they’d convert those 663 million Skype subscriptions to Google Voice and Gmail and in a swoop make parts of Yahoo and MSN irrelevant. They’d build a brilliant Skype client right into the DNA of Android, draining telco revenue and maybe killing smaller players like Windows Phone. They’d cut deals with equipment makers like Cisco (Linksys) and NetGear and steal voice revenue from telcos and cable companies alike. That’s all Redmondesque behavior and if anyone is going to be behaving that way, Ballmer feels, it had darned well better be Redmond.“

      That theory is a fine one if you truck with the notion that Google actually wanted Skype. I’d be inclined to believe it if I thought Google were giving up on Google Voice.

      You can’t just buy Skype and demand loyal Google Voice users switch from the cozy cloud to the P2P network, or vice versa. The Google Voice and Skype network architectures are not sufficiently compatible, so I don’t believe Google wanted Skype.

      Google walked away from buying Skype years ago before the negativity swirled around it and I believe that if it was recently in negotiations it was simply to drive up Skype’s price to ensure Microsoft paid the maximum premium. And boy did it ever.

      Clint Boulton

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