Microsoft (NASDAQ: MSFT) should have bought Facebook four years ago, when it might have had to pay only a few billion dollars. Since then, the social network has cruised past MSN, Aol (NYSE: AOL) and Yahoo! (NASDAQ: YHOO) in both number of global members and U.S. display inventory. Microsoft missed that chance, but the world’s largest software company has started to rectify it by the creation of an important alliance with Facebook.
Microsoft’s VoIP unit, Skype, which has 130 million active members of its own, is releasing Facebook-to-Facebook Skype call features. “This new development in the Skype-Facebook partnership is the latest example of how Skype is removing communication barriers and making it easier to connect with friends, family and business colleagues,” Skype management wrote. The news is more than just good public relations.
Through its Skype purchase, Microsoft has developed the ability to establish the equivalent of a global telecom operation. Skype will be part of many new releases of Windows, for both individuals and businesses. It probably will be a part of future updates to the Bing search system and to new content on MSN. Those in-house projects will deliver Skype to new user bases that will be well into the tens of millions. The Facebook relationship only enhances the effort to get Skype closer to ubiquity as a voice and video communications platform.
Microsoft has been criticized for its missed opportunities in cloud software, search and social media. It now has a new business in communications that is larger than most other global systems. The Facebook alliance may be the keystone to its efforts.
Douglas A. McIntyre
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