No! Microsoft Didn’t Overpay for Skype – They Need to Bulk Up To Compete With Google: Where Does This Leave Apple, RIM???

Reggie Middleton's picture

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Zero Govt's picture

the problem with Microshite is they are shite at everything they do... they have a deserved reputation, earned over decades, for producing bug-ridden virus attracting 3rd rate garbage software. They are clueless at new ideas, pitiful at innovation and always have to crib, copy and steal others bright ideas

Skype on the other hand is a great, great service. They would have been so much better as a stand-alone operation rather than continually selling their souls to big diseased dinosaurs

How will this sparkling little gem look sitting on the turd that is Microshite?

...the omens are pretty crystal clear on that: Skype will lose its luster

as for the Google v Apple debate one is the space leader, the other the iSpace copy-cat and catch-up pretender to the iThrone. Google has taken up its rightful position as also-ran slotting in nicely the iSpace vacated by the dying diseased dinosaur, Microshite (RIP) 

SwingForce's picture

That Reggie is a brilliant man! Nice to finally see Sprint ("S", not FON anymore) recognized as WiMax, and see how they got Google Voice to take their 3G traffic? Sounds like MSFT may have done something right for a change.

BTW- Is there a requirement to read your articles before posting a comment? /s's picture

With all my respect to Reggie Middleton, he needs to stick to what he knows best - real estate micro and macro trends and economics. In technology field, he is like fish out of water. To properly evaluate technology opportunities, tech knowledge is essential. Did you know that Skype does not own its own product? That's right, JoltID, the company formed by its founders, holds and licenses its patents to Skype proprietary technology. Skype is provided a "black" box executables, they don't even have the source code for the product. Secondly, Skype cannot work on cell phones. The native client and IP around it is built specifically for PCs (actually a Kazaa stack with new distributed index). It does not work on cell phones, and the current existing Skype cellphone apps must be licensed from other patent holders, in order to be legal. This is why Skype does not have any advantages in cell phone market, except the brand name.

Keep it real, Reggie. Don't get sidetracked on "sexy" topics you seem know little about.

Kina's picture

Inevitable when somebody makes an arrogant superior criticism of another they find themselves getting Pwned.

Reggie Middleton's picture


  1. MSFT has the resources to fill in the Skype holes.
  2. Skype does work on cell phones, I just made a wifi/VOIP on mine. Take your own advice (stick to what he knows best). Technology is just as deep in my camp as the FIRE sector. Be aware.
  3. What is the term of the black box license? It just has to be long enough for MSFT to replicate it.
  4. MSFT has one of the most trafficked collection of sites in the world. They don't need to overpay for eyeballs (although I can't promise that they won't). They see where they can synergistically add value to the Skype acquisition. Exchange server currently replicates PBX, I would assume they are trying to fold in mobile VOIP, which would be a steam roller integration advangtage for WP7. Skype for the enterprise with enterprise class security would be a boon.'s picture

But see, you still don't understand. Having a functional cellphone app and being the niche leader are two vastly different things. Sure the cellphone app works, I never said it didn't. I said the structural PC based Skype technology advantages cannot be transitioned onto cellphone platform without engaging another partner and paying significant licesing fees. Basically, branding another technology. That's not platform leadership. That's being no different than dozens of similarly positioned VoIP apps, where Skype brand name being the only comparative advantage...

Microsoft does not have enough resources to fill in their own "holes".

The VoIP patent thicket is significant. There is no way Microsoft could "replicate" it without runing into legal issues.

Again, you are comparing the open tech PBX and proprietary black box Skype. Skype will never be adopted by enterprise, because it is a huge security risk. Many corporate admins block Skype ports altogether.

Still a huge fan, just fun to see you wrestling with new topics!

zice's picture


Intergration business side of OCS (Lync) telephony with skype is another angle into the cloud. This is the bridge they have been looking for and more than likely planned. Enterprise business has alot of money in it and while a few execs will wander into iGadgets and Droidian landscapes, most will fall back in line when MS further enhances enterprise management of their devices. The advent of the System Center(Config Manager,Service Manager,OP) line of products that have gone from weak to very strong offerings in this area of device management. These are fully supported for cloud services also.

I don't see anything like this for enterprise business from Apple or Google. There is no reason for all these cloud services provided to not have a top down enterprise framework. This loose cohesion will ultimately spell a loss for Google and Apple.


Reggie Middleton's picture

Intergration business side of OCS (Lync) telephony with skype is another angle into the cloud. This is the bridge they have been looking for and more than likely planned. Enterprise business has alot of money in it and while a few execs will wander into iGadgets and Droidian landscapes, most will fall back in line when MS further enhances enterprise management of their devices. 

Agreed, for the most part. The only variable that is less known is Google. Google's rate of development has been absolutely unbelievable (and I can believe a lot). I've been following this space since 1992-3, and the rate at which Google is extending Android has been unmatched. HC 3.1 and GB 2.3.4 already have enterrpise hooks within, and I believe they plan to truly solidify them in icecream sandwhich. Microsoft should be the winner in this, but then again they should have created the iPhone, the iPad, blackberry server/handsets, app market/itunes and Android as well. So should and did are not necessarilly corollary.

In addition, management has been notoriously slow in implementation (re: WP7). Time is not on thier side at the rate Google is growing Android. I don't see Apple in this race, but will have to revisit when they release their cloud offerings.

Ergo's picture

We use skype all the time and love it.  Main use:  talking to relatives in a foreign country.  Kids get to see each other.  Grandparents see the kids.  etc...  Beats the heck out of international phone bills, and video is much more personal.  It's the best way we know to keep touch with relatives. 

TheProphet's picture

Microsoft is a legacy business with a dying model, so, naturally, they bought what? A legacy business with dying model.

Where does this leave Apple? The same place they have always been: with 100+ million names, addresses and payment methods (Itunes) and 60+ million devices that are one software update away from deploying VOIP.

This hardly leaves Apple out in the cold.

In fact, you think Microsoft bought technology. I think they bought the Skype user base. If they can monetize the 100+ million names addresses and payment methods they're getting from Skype, then I could be convinced they didn't overpay. Until then... just another mediocre move from the world's most mediocre CEO.

technovelist's picture

Ballmer is not a mediocre CEO. Destroying hundreds of billions of dollars in shareholder value takes rare talent!

Zero Govt's picture

you mean Mr Slippy, Bill Gates, dodged that bullet and Bu-l-mmer took it for the boss

falak pema's picture

This is a three doggy race : AAPL, Google, Microsoft?  

Can Microsoft catch up with the other two?

AAPL with its product/market coverage of all segments, its hi-class hardware+ software and its own Apple store model. And Google's Android information highway to EOMs + its head on competition to Apple store programmed.

Looks like Microsoft has its work cut out in catch up ball.

What is not clear is :

a)  WHEN the smoke will clear up in the market to show where the MS/Margin trade-off cookies fall and where subsequent strategic positioning leaves each of the three big boys. 

b)  Will an economic downturn affect this growth segment? Or is it so deeply entrenched world wide that this technology roll will keep moving up; whatever the fall-out amongst these key players.