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Microsoft buys Skype

May 10, 2011

In February of this year Nokia and Microsoft announced plans for a broad strategic partnership to better position both firms vis a vis Google and Apple.  The partnership still has yet to prove itself and after several highly publicized failed attempts at developing and marketing its Windows technology for phones – many (me included) are left wondering if the window of opportunity to become a player in this space may have passed Microsoft by.  Although their latest technology is widely recognized as leading edge, public perception has not changed and Windows Phone accounts for approximately 2% of all phones.

Today rumors were confirmed that Microsoft outbid Facebook with a deal to purchase Skype (the former ebay spin off) for $8.5 billion.  This makes Facebook’s offer from last week (which was rumored to be $3-$4 billion) paltry by comparison and could establish Microsoft as the defacto leader in VoIP.  Analysts concur buying Skype would give Microsoft a potentially valuable communications tool as it tries to make a bigger splash on the Internet and become a bigger force in the increasingly important smartphone market.

One wonders what will Microsoft do next? How will Skype fit into Microsoft’s marketing strategy to become a dominant player and how will this deal help with the Microsoft / Nokia partnership? Are there more deals yet to be announced? Will there be more acquisitions?

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