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Analysts: Microsoft Will Build Skype Into All Sorts Of Products

May 10, 2011

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Reported by

Mark Memmott

Now that it's been confirmed that Microsoft is buying Skype for $8.5 billion, a couple questions arise:

Where does Skype fit into Microsoft's plans?

And will Microsoft succeed where Skype hasn't so far — by making money from the Internet telephone service? Or is that not the point?

A few earlier analyses:

— "With Google and Facebook also reportedly sniffing around, the strategic value to Microsoft could — if it pulls off the integration challenge — make the deal look almost reasonable. For Microsoft more than either of its counter-bidders, Skype could form the glue between its PC, mobile and gaming businesses that it has hitherto lacked." (The Financial Times)

— "The biggest reason for Microsoft to buy Skype is Windows Phone 7 (Mobile OS) and Nokia. The software giant needs a competitive offering to Google Voice and Apple's emerging communication platform, Facetime." (Om Malik at GigaOm)

— "Buying Skype — a service that links users via Internet-based telephony and video — gives Microsoft a recognized brand name on the Internet at a time when it is struggling to get more traction in the consumer market." (The Wall Street Journal)

— "The $8.5 billion, all-cash purchase is indeed a big, big outlay but, again, expect to see Skype making its way into just about every corner of Microsoft's business. Time will tell whether it ultimately pays off." (Time magazine's TechLand)

Watch Planet Money for more.

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