Microsoft's bid for Skype follows a long series of moves the software giant has been executing to cater more to consumers than corporations.
It's $8.5 billion bid for the Voice over IP market leader comes after reports last week that Skype was entertaining offers for a buyout or joint venture from Google and Facebook.
The value for Facebook: it could instantly supply premium voice and video conferencing to its 500 million users.
Google already has Google Chat, a voice and video chat service, that hasn't generated much of a following. Part of Microsoft's bid might have been to keep its rival from the grabbing the top VoIP player.
"Microsoft doesn't want Google to get Skype," says Rob Enderle, principal analyst at the Enderle Group. "It would much rather grab the technology and share it with Facebook."
IDC analyst Al Hilwa says the defensive element helps explain the steep price. "If Skype ended up in the hands of Google, it might have been able to use it to strengthen its ecosystem at the expense of Microsoft," says Hilwa.
Skype could help Microsoft achieve its much coveted goal to become a big player in the consumer market. Microsoft has come to the realization that it must do more partnering with the suppliers of popular technologies to reach that goal, says Gartner analyst Leif-Olof Wallin.
In 2007, Microsoft invested $240 million in Facebook, and last October the software giant announced a partnership to tie its Bing search engine deeper into Facebook. Last Friday, Microsoft CEO Steve Ballmer in a surprise announcement said Bing would become the default search service for BlackBerry.
"This is the only realistic consumer strategy for Microsoft," says Wallin. "It needs to be as agnostic as possible and make sure it is on whatever platforms consumers in different geographies choose to use."
Skype, a global player, could put Microsoft's consumer strategy into turbo boost. "Now they can push Bing as a preferred alternative to all the millions of Skype users," says technology analyst Jack Gold of J. Gold Associates.
Likewise, Microsoft can integrate Skype into both is corporate and home entertainment products and services delivered over the Internet, says Gold.
Xbox Live and Kinnect, for instance — the company's popular online gaming service and hot-selling motion sensor — could get a big, immediate boost. "Skype would add scalable technology that can handle millions of users," says Gold.
As with all mergers, the devil is in the details. "Success will pivot on whether Microsoft is able to exploit these synergies,"says IDC's Hilwa.
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