In an unsolicited bid, Microsoft bought Skype for $8.5 billion, roughly 10 times Skype’s 2010 annual revenues. The company’s questionable investment in Skype has reignited speculation about Microsoft’s indeterminate future based in part on Microsoft’s past acquisition bungles.
Dissension in the ranks at Microsoft has arguably contributed to the company’s ineffective acquisition assimilations and habitually slow product releases. IB Times’ Jake Thompson spelled out three reasons why Microsoft’s buyout of Skype will fail, ultimately tracking back to Microsoft’s dysfunctional corporate culture.
With Skype, Microsoft has committed to an important change in its organizational structure that may help the company overcome some of the obstacles it faced with past acquisitions. The Skype division will be reporting directly to Microsoft CEO Steve Ballmer—a new strategy for Microsoft.
Tony Bates, the president of Microsoft’s new Skype division and former CEO of Skype, told the Seattle Times that this shift is “not just about the organization; it’s sort of a statement of strategic intent and strategic alignment.”
Bates will be the point person in charge of heading up efforts to integrate Skype with other Microsoft products. In reporting directly to Ballmer, Bates may be able to skirt some of Microsoft’s notorious in-fighting and focus on connecting Skype and Microsoft and building business for the Skype division.
More insight into the Microsoft/Skype deal: