Originally Posted by Ted Todorov
Matt: So what were/are HP's alternatives to WebOS in the mobile space?
So far as customer bases go where is Danger's customer base right now -- where is LaLa's? Customer bases have a way of heading to the exits in a big hurry.
Honest answer: HP would have been smarter licensing Android. I know that sounds foolish from your point of view, but it lowers their development cost significantly... as in, to near zero. And it cuts their ongoing production cost as well. Userbases tend to move and shift for the exits quickly if the product isn't what they want - and Skype may face that. Corel found that out when they picked up wordperfect.
But a big part of it is also based around the kind of product you have and the place you want it to go. But a big part of it is what properties you have.
4 Years ago, Microsoft bought a 1.6% share in Facebook at $240M. The only thing they got outside of 1.6% was the right to ads outside the US, and backbone driver support. At the time, some investors called it outrageously stupid.
Microsoft's valuation in 2007 figured Facebook as worth roughly 14.87B dollars. Give or take. And there were people who thought this was retarded. Current cap value: $85B.
So, in 4 years, MS turns around 4X it's money on stock returns alone.. but the real story is their advertising link... where MS is making far more then originally valued.
1.6% of a company is basically nothing (technically, right now based on reports, MS has somewhat more then that now), but it is enough that MS managed to land Bing, Location, and Networking contracts out of it..which has been very, very good for that side of the house. In fact, without it, Bing would probably be dead in a ditch somewhere. ( http://news.cnet.com...0019533-36.html
In the end, MS buys Skype for the obvious reasons:
The short answer, we believe, is “No.” As we’ve mentioned, Microsoft already has its own video calling and communications software, so the company is not buying Skype for its technology. Rather, Microsoft is buying Skype for its ubiquity, and the edge that this will give the company over its rivals.
While rivals such as Google Voice and Apple’s FaceTime continue to grow, Skype is the undisputed Voice over IP (VoIP) king with 663 million registered users as of 2010. Since 2007, Skype has included an increasing number of mobile phones in its list of supported platforms – including iPhone, Android, BlackBerry and Symbian. It seems highly unlikely that Microsoft would want compromise this key strength of its new communications platform.
Now, Apple fans may jump and leave and quit Skype for refusal to give MS money. Still, as a universally available video client, with 663M registered users and as I point out above, almost 200M paying users, it's hard to see that going to "0" anytime soon.
The buyout factor was in part for the userbase, but it was also to trumpcard the rival; there were three suitors in this the last few days - Microsoft, Facebook, Google. Google's VideoChat hasn't really gained any traction. Facebook is looking for the technology. Both wanted it because it would put them in the drivers seat.
Getting Skype was as much a part of keeping it away from Google as anything else. If Google grabbed Skype, they would have an instant platform across all their phones and a wide userbase. It'd be difficult for anyone to catchup.
That's the thing... you are thinking of this like "well, lots of users just quit and go somewhere else.." Yes, that's true.. on one end. But here, you're also talking about a pay service with nearly 200M users.. which means 200M virtually issued phone IDs.
I want you to think about when ATT brokeup. Sure, you could go anywhere.. so why didn't MCI/Sprint/etc. really rise up and wipe out ATT? Because lots of people said "oh well, I'm here, why hastle with moving?"
Whether this turns out to be a good deal or a bad one is going to be a long time to sort out.. but I think if nothing else, for MS, it's keeping this one away from it's competitors.
It's already been said there will be an option for Kinect/XBOX. So that's a done deal. I'm sure we'll see MS offer a licensing agreement to Facebook. And from there, we'll have to see what happens for user retention. Maybe you're right and they all hate MS and quit. We'll wait and see.