Professor Elam

Tuesday May 10, 2011

MSFt buys Skype for $8 Billion

There are several interesting facets of this. 

The last sale on Skype was $2.5 B, Skype indicated it was going to do an IPO, put itself up for sale, and bingo, MSFT buys in at 3x the previous price. 

Observations

MSFT has always bought competition rather than innovate.

MSFT is really lagging, they need a winner so they paid up. 

This is typical top of the market thinking. Market tops see  big mergers and acquisitions, the positive social mood is inclusionary. Yet on the downside, the markets often regret their eagerness

Daimler for Chrysler

Time Warner for AOL

Fed Ex for Kinkos

Oh well, you heard it here first. I would hope MSFT would finally turn SKYPE into a true low cost conferencing tool.