Microsoft Buys Skype for $8.5 Billion. Why, Exactly?

Even the access to paying customers is hard to justify. The terms of the deal mean that for each Skype customer, Microsoft is paying about $1,000. And on average, those customers are worth a profit of about $30, presuming most of Skype’s income comes from subscriptions and call charges. That’s a huge disparity.

Windows Live Messenger users have shown no propensity towards paying money, unlike Skype’s 8 million paying users, and it may be a challenge to convert them from non-paying to paying. However, since at the moment they have essentially nothing to pay for, it’s difficult to use that as evidence that they wouldn’t pay if there were services worth paying for. Especially as there’s likely to be quite a bit of overlap between the customer bases; people aren’t giving Skype the money instead of Microsoft because they prefer paying Skype, they’re doing it because Microsoft simply doesn’t sell Skype-like telephony facilities. And Lync customers are already on the payment treadmill, so it should be far easier to extract further payments from them for additional services. —Microsoft Buys Skype for $8.5 Billion. Why, Exactly? | Epicenter |

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