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It's official: Microsoft, Skype marriage consummated

Skype chief praises new master's 'disruptive innovation'

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Microsoft is wrapping up the last regulatory approvals, and has formally added Skype as a new division within the company, closing the deal that cost Redmond $8.5bn.

The last regulatory hurdles to the deal cleared in Europe last week (the US okayed the deal in June) and Redmond has already trimmed a layer of senior management from the company prior to its full integration. Skype CEO Tony Bates survived the cull, and will take on the new role of president of the Skype division at Redmond, and is stressing that the first step for the division is to reach over a billion users.

“When I think about what we can do together - the assets, the technology, the way both companies push forward with disruptive innovation – I see us reaching that goal quickly,” said Bates in a new Microsoft video.

On the face of it, that’s not going to be too hard. Pre-takeover, Skype had around two-thirds of that figure already, and Microsoft customers are going to be seeing a lot of the technology going ahead. Redmond looks set to integrate the Skype technology, with its Lync platform and Xbox systems as priorities. For both groups, the addition of Skype widens communications options, and can be used to bring videoconferencing into the mix.

There have been some interesting rumblings from the mobile division too, although adding VoIP to Phone 7 does raise some interesting negotiation points with the operators that Microsoft is looking to recruits for its handsets. By and large, telecoms companies are not fans of Skype, since it and others are very disruptive to their business – but no doubt an accommodation could be reached.

Microsoft Office users are also likely to be seeing the technology coming to their desktops. A simple Skype button in the Office toolbar could be a good way for Microsoft to claim that it is bringing videoconferencing to the masses. Sure, the quality wouldn’t be remotely good enough to compete against dedicated videoconferencing units, but Microsoft has made a career of delivering “good enough” applications to corporate users with the whole Office suite.

There has been a lot of talk in the last few months from Microsoft and others about the move to video as a primary form of communication. We are supposed to be using video for everything these days, now that the technology has advanced far enough and the bandwidth is available.

The problem is El Reg has been hearing exactly this kind of argument from technology companies for a decade or more, and while the technology may be there, the demand just isn’t – or at least isn’t yet. There have been endless studies showing that video confers more understanding during conversation and enables work to get done faster, but they all ignore the central point that a lot of people prefer impersonal contact that doesn't require attention, such as email and SMS, rather than phone calls and MMS.

And – and let's be honest here – many of us regard ourselves as simply too unattractive to want to spread our face across someone else's display.

Microsoft is taking a gamble that Skype will be worth the $8.5bn it paid for it, and video seems to be the direction it wants to go. But Redmond will have to do a good job of integration and also find some way to make people want to use it.

Based on Microsoft’s previous forays in the area, success is far from assured.

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