skype Microsoft close to a deal to buy Skype

Many people around the world love Skype for its internet-based telephony and video services, and it would seem that powerful corporations like Microsoft are no exception. Apparently, the Redmond giant strongly believes that being able to build up its own communication infrastructure that is capable of serving as a source of information and entertainment is vital enough to its plans for competing in the consumer market that it has reportedly offered to buy Skype for a handsome sum of money.

Read on to find out more.

skype Microsoft close to a deal to buy Skype

Even though the traditional desktop and notebook PC still factor in very heavily in most users' digital life, it cannot be denied that the world is slowly but surely starting to experience a shift in the way we utilize our technological toys to satisfy our digital needs. Gone are the days of using a desktop PC for sending emails to friends and co-workers; today, communication tools are meant to be sources of information and entertainment, and needless to say Skype is one such tool that is popular among many for delivering just that.

And as it turns out, Skype's appeal and potential is so great that it has attracted the attention of one of the world's most powerful corporations. Apparently, word has it that Microsoft is currently in talks with the software vendor for what will be the former's biggest acquisitions if the deal goes through, which is to purchase Skype for the handsome sum of US$7-8 billion.

According to a report published by the Wall Street Journal, anonymous sources close to Microsoft and Skype have reportedly claimed that both parties are rather close to reaching an agreement, and that the deal could go through by as early as this Tuesday if negotiations are successful. However, the Wall Street Journal also claims that, in spite of the discussions having reached such an advanced stage, the negotiations are still not finalized and there is a very real possibility that both parties may end up pulling out at the last minute.

skypelogo Microsoft close to a deal to buy Skype

What Microsoft intends to do with Skype if it is successful in closing the deal remains to be seen. However, some are speculating that the software giant may move to integrate Skype's Internet-based telephony and video services into its Windows Phone 7 offerings in order to give the platform the momentum it desperately needs to go up against Apple's iOS and Google's Android in the smartphone and tablet space. Due to Skype's huge following in the consumer space, Microsoft is probably banking on the fact that some mobile Skype users may gravitate to a platform which boasts well-integrated Skype functionality right out of the box as opposed to having download a separate app.

Of course, should that happen, it will almost certainly mean that Microsoft will have to play its cards very carefully, as one must remember that it is often the carriers which have a huge role to play in the  popularity of any mobile phone platform, and Windows Phone 7 is no exception.  This is due to the fact that Skype's VoIP protocol conflicts directly with carriers' duration-based pricing systems, and can potentially allow users to bypass their carrier's airtime charges. Suffice to say, no carrier in its right mind will want to offer customers a phone which has the potential to siphon huge chunks off their revenue earned from phone calls, especially when most calls made via VoIP are either completely free or priced at rates significantly lower that what most operators charge.

However, to avoid getting too far ahead of ourselves, we really should point out that until the deal between Microsoft and Skype falls flat on its face or is successfully closed, any information about Microsoft's plans for Internet-based telephony and video services are purely speculation. Do check back for updates though; we will definitely be keeping tabs on how this deal between Microsoft and Skype turns out.

Source: Wall Street Journal