What happens to Skype now that it is officially Microsoft's?
Microsoft (NASDAQ: MSFT) ballyhooed its "official" ownership of Skype Thursday, although there are a few regulators around the world yet to approve the 8.5 billion acquisition. The question looming now is what will happen to Skype's largely free video calling service as Microsoft tries to make a profit off of it.
"It will be worth watching to see whether that basic business model changes drastically: for example, incorporating either more metered services, or further forays into advertising and freemium-style services, making the service, for example, a platform for advertising from Microsoft's own ad network," writes Ingrid Lunden at PaidContent.
Microsoft has said that Skype will remain an independent division, with Skype CEO Tony Bates taking on the role of division president. In a blog post following the announcement about the acquisition's completion, Bates said Skype will still be available on multiple devices and platforms.
"I'm sure on a lot of people's minds post-merger is the question, will the Skype experience change? The answer is an emphatic no," Bates says in the video embedded in the blog post. "The value proposition of Skype is being multi-platform across different devices, whether it's PCs, desktops, mobile phones, whether it's in the living room. That's key and that must stay. We're committed to that."
The software giant plans to integrate Skype into a number of its existing products, such as Windows Live, Windows Phone and Lynx corporate messaging. "Skype may well become as ubiquitous as Windows or Word in the longer run," Lunden speculates.
The combined forces of Skype and Microsoft could give Cisco a run for its money. Cisco has been trying establish a deep foothold in the high-end business video conferencing market, and a much cheaper and easier video calling alternative from Microsoft could interfere with that strategy.