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November 6, 2012

Microsoft retiring Messenger in 2013 and moving users to Skype

Posted by David Hunter at 2:16 PM ET.

While titled "Talk to your Messenger Contacts on Skype" this blog post by Tony Bates (President, Skype division, Microsoft) is more than interoperability – Messenger is being retired in 1Q2013:

We’ve got good news to share! Skype and Messenger are coming together. Millions of Messenger users will be able to reach their Messenger friends on Skype. By updating to Skype, Messenger users can instant message and video call their Messenger friends.

This effort started with the release of Skype 6.0 for Mac and Windows a few weeks ago, which allows you to sign into Skype using a Microsoft account. Now Messenger users just need to update to the latest version of Skype, sign in using a Microsoft account, and their Messenger contacts will be there.

Our goal remains to deliver the best communications experience for everyone, everywhere. We want to focus our efforts on making things simpler for our users while continuously improving the overall experience. We will retire Messenger in all countries worldwide in the first quarter of 2013 (with the exception of mainland China where Messenger will continue to be available).

One of the perils of a large company is too many overlapping products so this seems like a wise move since Skype is bigger and has the momentum while Messenger is declining, but getting 100 million plus Messenger users to convert should be exciting.

Filed under Executives, Microsoft, Skype, Tony Bates, Windows Live, Windows Live Messenger

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May 10, 2011

Microsoft buys Skype for $8.5 billion

Posted by David Hunter at 10:05 AM ET.

Microsoft today announced that it is purchasing the Skype Internet telephony service for US$8.5 billion:

Microsoft Corp. (Nasdaq: “MSFT”) and Skype Global S.à r.l today announced that they have entered into a definitive agreement under which Microsoft will acquire Skype, the leading Internet communications company, for $8.5 billion in cash from the investor group led by Silver Lake. The agreement has been approved by the boards of directors of both Microsoft and Skype.

The acquisition will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities. The combination will extend Skype’s world-class brand and the reach of its networked platform, while enhancing Microsoft’s existing portfolio of real-time communications products and services.

Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms.

Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Ballmer.

The acquisition is subject to regulatory approvals and other customary closing conditions. The parties hope to obtain all required regulatory clearances during the course of this calendar year.

Om Malik has some perspective on why Skype’s owners were anxious for it to be sold and suggests that if Microsoft does not botch the acquisition, the big winner could be Facebook (who already has a relationship with Microsoft) and that a joint announcement could be expected shortly. Still, the big question is how the acquisition will work out, including how much of the Skype team will stay with Microsoft and the basic economics of the Skype service which has already suffered through a failed acquisition by eBay:

Despite its popularity, the service has struggled to maintain profitability. Since most of its services are free, Skype makes much of its income from a small group of users who pay for long distance calls to telephone numbers. In 2010, Skype recorded $859.8 million in revenue but reported a net loss of $7 million, according to a filing.

Microsoft’s deal-making history is mixed. The company has often been an smart acquirer of start-ups and smaller companies, analysts say, picking off technical teams that are then folded into products likes Windows, Office and Internet Explorer. But during Mr. Ballmer’s tenure as chief executive, beginning in 2000, the company has also made far larger, riskier bids, most of which have been viewed as unsuccessful.

In 2005, eBay bought Skype for $2.6 billion with hopes of tightly integrating the service as a sales tool. But the deal never lived up to its promise and eBay took a $1.4 billion write-down on its investment.

I’m frankly a bit dubious about the success or at least profitability of this acquisition since Skype doesn’t even seem to be a side dish, but more of a garnish on Microsoft’s plate and a very expensive garnish at that.

Filed under Acquisitions, Executives, Facebook, Lync, Microsoft, Office, Office Communications Server, Outlook, Skype, Tony Bates, Xbox, eBay

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August 8, 2006

Nokia, Sony join the personal media player party

Posted by David Hunter at 10:15 AM ET.

I was only kidding a little bit last week when my reaction to Google’s declaration that they wouldn’t sell music was, “They seem to be the only ones.” Today, Nokia jumped in by buying Loudeye:

Nokia is to buy Loudeye, the US digital music company that owns On-Demand Distribution (OD2), the European music download supplier started by Peter Gabriel. The Finnish mobile phone giant is paying $60m in cash for the company.

Nokia described the deal as the foundation for its own music service with which it will target owners of its phones, in particular is N-series handsets. It said the service will go live next year and target Nokia handsets the way Apple’s iTunes Music Store targets iPods. You can tell that’s the model Nokia has in mind: it specifically described itself “the world’s largest manufacture of digital music players”.

More details here and here, but you have to admit that Nokia has a nice foot in the door.

Less robust are the chances for the Sony “mylo” which was announced yesterday. The mylo features Wi-Fi connectivity with three built in instant messaging services (Google, Skype, and Yahoo), Web browsing, and Skype VoIP service. Along the way:

While you chat or browse the Internet, the 1GB of the flash memory on the mylo personal communicator lets you enjoy your music too. It supports the playback of MP3, ATRAC® or WMA (secure and unsecure) files. The mylo communicator has a built-in speaker for listening to music so you can share your music with those around you. You can also view MPEG-4 personal videos by transferring files via USB cable or with Memory Stick Duo™ media. You can also store JPEG pictures from the Internet or your digital camera.

Providing networking possibilities without a wireless network, the mylo personal communicator detects when it comes into the presence of other mylo units. With the ad-hoc application, you can share play lists and stream music between mylo communicators one at a time.

Supposedly, you can add up to 4GB of Memory Stick storage, but it seems a little thin in that regard for a full fledged personal media player, although the networking feature seems to anticipate what Microsoft is planning for Zune. The mylo is USA only and the real target apparently is an instant messaging user in range of a Wi-Fi hotspot which would seem to be an odd demographic. Text messaging is much more popular overseas, but is cell phone based. There’s no word of a dedicated music download service, so I think we can chalk this up as another one of the odd generic players trying to get traction with novel features.

So what do these mean for Microsoft’s Zune? It means that Microsoft will have to work all that much harder to separate themselves from the crowded field of aspirants for the iPod’s throne.

Update 8/11: Concerning PlaysForSure licensee Nokia, Jupiter Research’s Michael Gartenberg asks “Is Plays for Sure Dead?

Filed under Argo, Coopetition, Microsoft, Nokia, PlaysForSure, Skype, Sony, Technologies, Yahoo, Zune, eBay

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June 20, 2006

Will MSN Messenger by another name smell sweeter?

Posted by David Hunter at 12:52 PM ET.

My apologies to the Bard for the title, but that’s the question as Microsoft released the latest version of MSN Messenger under the Windows Live brand:

Windows Live Messenger, which had been available in test form, will officially launch Tuesday.

The free program is an upgrade to MSN Messenger, the previous name for the software maker’s tool for quickly communicating online. Such products have become incredibly popular for a wide variety of audiences, from teens to business people.

The basic service gives people a way to quickly type messages back and forth. Windows Live Messenger also offers video calling and ways to easily share files, among other features.

Competitors, including market leader AOL, also are adding such functions.

Yahoo released the latest beta of their IM offering yesterday with similar features.

MSN Messenger was the second-most popular instant messaging service, after AOL, for U.S. home and worker users, according to May data from Nielsen/NetRatings.

Globally, MSN Messenger is the most popular instant messaging client, with 204.6 million users in April, according to comScore Media Metrix. Yahoo is No. 2 with 76 million users, while Time Warner Inc.’s AIM and AOL messaging products together had about 51.3 million users, the research firm said.

That’s what we’re used to seeing, but there are various ways of counting for these market stats so you may see different rankings like eBay’s Skype as number 1 followed by AIM and then Yahoo.

The official press release has more on the new features in Windows Live Messenger and something else:

We can’t bring ourselves to let the company’s feeble attempt to link the launch to the new Pirates of the Caribbean film pass without comment. Actually we can. But have a look at the press release here, and share our pain.

Aside from the pain, it was rather odd since Windows Live Messenger has enhanced importance as the leadoff hitter in Microsoft’s lineup of the Windows Live online service offerings (discounting the misbranded Windows Live OneCare which launched last month). Microsoft underscored the importance in a press Q&A with Martin Taylor, Microsoft Corporate Vice President of Windows Live and MSN:

Windows Live Messenger is the first core, global service to launch of the more than 20 new services currently in testing for Windows Live, a set of personal Internet services and software designed to give users greater control over how they stay informed, connected and protected on the Web.

PressPass: Why did Microsoft choose Windows Live Messenger as the first core Windows Live service to launch?

Taylor: We regard Windows Live Messenger as one of the most pivotal services within Windows Live, because it’s built to help people connect and share in all kinds of rich, unique ways. Windows Live Messenger offers people the ability to see, talk and share with family and friends in such a seamless way that puts them in control. Windows Live Messenger is also integrated with many of the Windows Live services to serve as a convenient entry point into consumers’ online world so they can do even more than IM right from one place. From directly within Windows Live Messenger, users can launch a shared Windows Live Search query so they can pick out a restaurant with the person they’re talking with, or visit a blog on MSN Spaces to see what their friend has been up to, or browse to their favorite Web sites using Windows Live Favorites, or check their Windows Live Mail. So in many ways Windows Live Messenger is one of the main hubs of Windows Live. Windows Live Messenger also is the first core service that incorporates the sleek user interface and look-and-feel that will be used across all of the Windows Live services.

PressPass: How big of a role will Windows Live Services play in the future of Microsoft’s business?

Taylor: Windows Live is a huge growth opportunity for Microsoft. The online advertising opportunity will be a big growth driver for Microsoft in the coming years, as the market continues to expand. To ensure we are ready to take advantage of this opportunity, we plan to dedicate roughly US$1.1 billion of the company’s overall $6.2 billion research and development budget toward Windows Live and MSN in the 2007 fiscal year that starts next month.

As usual, Jupiter Research’s Joe Wilcox has an interesting take:

Granted, there are many new features in the updated Messenger client, but like many of its Windows Live counterparts, the software is rebranded MSN. As I said at the start of this “Live” drive, MSN rebranding would be the real new thing. Interesting, Microsoft is making more noise over Messenger than Windows Live OneCare, which is something new. That product launched about 20 days ago.

About half the Windows Live products–nearly all betas–are MSN updates or rebrands, while some of the others moved from MSN to Windows Live testing. As of yet, there is little brand-spanking new, although Microsoft is improving products and cross-integrating loads of features among the “Live” stuff.

Wilcox also observes that if you had to pick a target for all this Microsoft effort, Yahoo might well be a better choice than Google.

Filed under AOL, Coopetition, General Business, MSN, MSN Messenger, Marketing, Microsoft, Online Services, Public Relations, Skype, Windows Live, Windows Live Messenger, Yahoo, eBay

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