Many people have covered ad nauseum the Microsoft purchase of Skype yesterday and what it means to Microsoft and Skype. Â I wanted an evening to think about it and what it means to the real time communication space. Â I kept returning to the same question, why did Microsoft need Skype, forgetting the billions it cost them.
Microsoft Was Worried About Facebook
Microsoft’s Live Messenger team has been looking for ways to combat the damage that Facebook started inflicting to their network’s health in Western Europe. Â They started acknowledging the issue a year ago when Microsoft added a bunch of Facebook integration into Live Services. Â The issue is that, as I knew would happen with AIM, was that is like putting a band-aid on a giant leak.
Microsoft Needs a Distribution Platform for Communication Tools
I have an issue with this theory as well. Microsoft has a great consumer platform for real time communication in XBox360, they have the enterprise space, and a potential mobile solution with the Nokia relationship.
Microsoft Needs Help with Improving Video Technology
This is plausible until you consider that Microsoft is part of the patent pool for H.264 and the Skype acquisition does not give them technology like browser based video (though Skype has been working on it). Skype might be able to help them on mobile platforms but Skype’s architecture may end up hurting Microsoft more than help them with enterprise customers.
Microsoft Needs a Strong Consumer Brand
This is the best reason I can think Microsoft executives talked themselves into buying Skype. Is Microsoft now saying the consumer internet space is once again important to the company? If you go simply by the balance sheet that can’t be right. Skype is a verb, and that alone is always worth considering when buying a brand.
For Skype, I wonder if this will be any different than when EBay acquired them? It’s hard to integrate a real time communication platform into a company with an existing strategy. I do know that the acquisition worked beautifully for the investors. As for Microsoft, time will tell if they over paid, but after 24 hours to me it still feels like an over-reaction.
After last years Web 2.0 Expo where I only saw business development and product management people, I had little hope for Web 2.0 this year to be the technical juggernaut OReilly promised. I am glad I was wrong. This year there have been few, if any, vaporware announcements and developers are all over the place. We continue to see tremendous interest in Open AIM and we have fantastic swag to hand out at our booth in Moscone West.
Yesterday’s keynotes were really quite good. Microsoft showed off Live Mesh, which is very interesting as a content distribution tool and storage backup. If I take a picture on my mobile device from the conference, I can use Live Mesh to share pictures instantly with all of my ‘mesh.’ Mesh will run on XP, Vista, and eventually it will run on mobile devices and Macs. Microsoft, internally, has 6 mobile devices and Mac support working and say it will be released later this year. Clay Shirky spoke about how today’s youth spends their free time and how interacting with entertainment is important for them, not sitting idly in front of the TV. Max Levchin from Slide defended his company’s $500 Million valuation and how Slide is staying ahead of the curve with regards to monetization. He believes business models being used in Asia in the form of micropayments and premium services will be the next phase of Slide and other social network apps revenue streams.
Edwin Aoki spoke in front of 4000 people about Open AIM. He borrowed parts of my talk on the History of Open AIM which is a case study of how and why we opened up our APIs. Edwin did a terrific job and it was awesome to have an audience this size hear about AIM.
Its been a little quiet from me in the past month as we are working real hard on writing code.Â There is a lot of exciting stuff happening in the AIM world, and you guys will start seeing it in the near future.Â In the meantime, I thought I would pontificate on the MSFT/YHOO merger and what it means from an instant messaging/social network point of view.Â MSFT/YHOO already have inter operable messaging clients, and the success or failure of the move is debatable.Â Due to MSFT’s sheer number of employees working on client development, one must believe that the Live Messenger client will be the one to survive.Â I question really how this looks to the end user at the end of the day.Â The reason being, that where Yahoo IM is huge, Live is not and vice versa.Â Do they still skin a version of the IM client one for Live, one for Yahoo?Â It would be very weird where one day if you are a Yahoo user you no longer sign into the client with the Yahoo name space.
It will be interesting to see if this deal really does close.Â As MSFT’s stock loses value it makes the deal less attractive to YHOO shareholders.Â In the 12-18 months this deal will take to close, AIM/ICQ and others will continue to execute our plan of record.Â Lastly, it has been said by many, but combining two companies as big as MSFT and YHOO and getting the synergies right, is a HUGE challenge.
A quick post today on some developments over the weekend. First, we continue to research with Microsoft the Vista issue, though as I mentioned in the post last week, all indications are that this issue is not related to AIM. For the user who reported that un-installing Vista Update (KB94169), are you sure that it is in fact the correct update? My research shows that KB94169 is a patch for Windows 3.x for “IBM 4226 Printer Emulation.” If we can get that actual patch ID we would definitely appreciate it, as would the engineers in Redmond.
I have been getting a lot of feedback on AIM Music Link which is terrific. I have been looking into reported issues with Yahoo Jukebox, iTunes 7.5 and Windows Media Player 11. I am unable to reproduce the problem that status does not update. The only thing I can think of is that you may be away when playing the song. I have seen issues where status will not update when you are away.
For the person asking if I could add support for Zune, I spent a hour this afternoon looking into this, and have not found any API associated with the Zune Media Player version 2.1.888.0. I even looked into screen scraping the song, and so far no luck. If someone has figured this out, please share, and I will definitely add the support.
Lastly, I want to do a mailbag this week, so if you have questions you would like answered about AIM, Open AIM, or just general questions about social networking and media, please just leave a comment below, and I will get to as many of the questions as I can.