More Skype Rumors: Big News Soon, Microsoft In The Mix
For the past week or so, rumors have been swirling around Skype, the Internet telephony company. Reuters has reported that the company has been in talks with both Facebook and Google, either for a partnership or for an outright acquisition.
Context & Ripple Effects
Deal chatter around Skype has a long tail: GigaOM reported Google sniffing around the company back in November 2007, and argued even earlier that year that Skype was becoming infrastructure for a new kind of distributed workplace. More recently, Skype has been pushing beyond its desktop client with a move into the browser announced in December 2010.
What changed by May 2011 is the number of suitors on record: per Reuters reporting cited by GigaOM, Skype has been in talks with both Facebook and Google over either a partnership or an outright acquisition, and Microsoft is now rumored to be in the mix as well. With three of the largest consumer-platform companies circling one asset, the story reads less like idle gossip and more like a bidding dynamic — though every element remains unconfirmed.
First-order effects
- Facebook, Google, and Microsoft each face a near-term decision on whether to pay up or walk away, while Skype's current owners gain leverage from having three rumored bidders at the table rather than one.
Second-order effects
- Whichever platform lands Skype gains an installed base of voice-and-video users overnight, forcing the other two to accelerate rival communications efforts — and Microsoft, whose roughly $215B market cap reflects persistent investor skepticism despite profits comparable to Apple's, has extra incentive to deploy cash on a consumer-facing win.
Third-order effects
- If the pattern holds, standalone internet-telephony brands get absorbed as features of large ecosystems, echoing the analyst view that scale players suffer a 'Wal-Mart Disease' valuation discount they can only counter through strategic acquisitions rather than organic growth.
The trend: Real-time voice and video communication is consolidating from independent services into a strategic building block contested by the biggest consumer platforms.