Imagine a company with the largest subscriber base for on demand video, the highest number of user hours of any operating system, and the fastest selling consumer electronics device of all time. Now imagine that company bought the most popular international voice communications platform on the planet.
I once did a video conference while playing Uno in the back seat of a Jeep. I was cutting edge. That was using Microsoft technology nearly five years ago. Microsoft didn’t need to buy Skype for its tech. Microsoft has better technology in Steve Ballmer’s left pinky toe than Skype has in its entire portfolio. What Microsoft bought was users; the ability to integrate with devices; and the ability to really make Microsoft do what it has always wanted to do: be everywhere.
Nokia phones running Windows Mobile connecting to Xbox 360 consoles via Kinect, while a third person connects via a Windows 7 PC — that completes a circle no other company has. Sony suddenly looks on the ball with its selection of devices, if only it had an online service (80710A06). Apple doesn’t have enough market share in any of the three-screen experience, and Apple’s living room screen experience is non-existent. (Apple TV has about the same install base as VHS at this point.)
Twitter is dead, people. Users are over 140 characters that you can send from anywhere. This is 2011. Text is a medium for old people in their rocking chairs. Face-to-face communication is the way of the future. Even Facebook wants to do video chat. You know how Facebook will do that? Skype integration. Microsoft will bring back the API, the embed, and the use our code ’cause you can’t build this yourself nearly as well as we can model. Microsoft will be the gate keeper. If it is smart, those gates will be most of the way open and the bouncer that keeps out the riff-raff will be someone to whom you can slip the door fee and be able to get in.
$8.5 billion isn’t a big deal. Microsoft was just sitting on that money, anyway. Microsoft paid a premium to buy Skype before someone else realized it should be the new telecom provider. Net neutrality — maybe you have heard of it? Everything gets converted to IP and suddenly Comcast isn’t in the TV business, it is in the packet business. If your packets and my packets have to be treated the same, instantly Microsoft can say, “Hey you like TV, you like games, you like talking to people on phones. We can do that! And if you get a better deal from Frontier next week on your Internet, you won’t even have to call to tell us you switched. Hell, if you go on vacation you can use all your services on the beach in Tuvalu. That’s the meaning of TV, isn’t it?”
You can picture Ballmer doing the monkey dance as Steve Jobs figures out that shiny hardware is easy to copy, but user acquisition is hard. All those people who are on iTunes are barely a drop in the bucket next to the combined Xbox Live and Skype user base. If Microsoft can leverage those shares in Facebook for something like convincing Facebook that Microsoft Live 365 is the Facebook chat and video platform, Microsoft instantly has something like 80% of the world’s Internet users as members.
If you missed that Microsoft now has a Google Docs competitor that is prettier, more user friendly, and generally just plain better, you might also have missed that Microsoft is once again looking to reclaim lost market share in the productivity space. Google couldn’t do free forever, and Google Docs, Apps For Domains, and even App Engine all just got more expensive. Suddenly Microsoft is price competitive, feature superior, and already integrated with many other products you were already using.
Now if Microsoft would just get over the whole we don’t release half of our good products on non-MSFT platforms attitude, it could stop almost winning and start taking over the world like it should have done 10 years ago when it was top dog.