Submitted by So, the biggest acquisition in Microsoft’s history. The Wall Street Journal reports – and it has been confirmed – that Microsoft and Skype will announce today that Redmond will buy Skype for $8.5 billion. That’s a lot of money for a company that hasn’t ever actually made any profits. Update: and it’s official: yay on Skype on the Xbox360 and Windows Phone, and this: “Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms.” Let’s hope this includes Linux.
Skype already has a history of being bought. The project and company was founded back in 2003 by the same guys who did Kazaa, only to be bought up by eBay for $2.6 billion back in 2005. eBay didn’t really know what to do with it though, so they sold a 70% stake to a group of technology investors in 2009.
And now, Microsoft is swooping in, even though both Google and Facebook were reportedly interested in buying the VoIP software company. It all seems a bit strange, though, since Skype never actually made any profits, and has a rather massive long-term debt ($686 million of the $8.5 billion). Still, Skype is a recognised brand the world over, and has 663 million subscribers. And, it’s pretty much impossible for Microsoft to make Skype’s interface on Windows worse than it already is, so there’s that.
It will be interesting to see what, exactly, Microsoft’s plans are for Skype. Due to carriers being notoriously averse to VoIP as it threatens their business model, I don’t think Skype will be integrated into Windows Phone 7. A more likely target will be to integrate it into Windows itself, most likely for tablets too. Skype runs on many operating systems already – iOS, Mac OS X, Linux, Android, Windows – so it would give them a pretty universal VoIP solution from the get-go.
Of course, assuming Microsoft is interested in properly maintaining the Linux version at all. Not that Skype itself has had much love for Linux, but at least Skype ran on Linux (somewhat), and now with Microsoft at the helm, I’m not so sure that’s going to last.
The end of Skype for Linux? … I suppose my family will have to live without us being able to video chat freely.
I would say it’s high time an OSS alternative to Skype appeared.
Microsoft will definitely start its Skype Linux-killing campaign very soon.
Yeah, it’s not like .ogg isn’t great for audio already. Let’s get a pidgin plugin already!
Not sure I understand your comment. But ogg, despite how good it is, is not an “alternative” to Skype. It’s just a format, not a full-fledged voip program.
Ogg (Vorbis) isn’t really intended for live chat, but Xiph’s CELT codec is and just recently Skype donated their Silk voice codec to be combined with it to create the IETF Opus codec under royalty free terms. Hopefully that’s too far along for Microsoft to kill.
Skype are also the biggest user of VP7 and have recently been championing VP8 as the future, again hopefully Microsoft won’t be allowed to alter that.
A truly OSS skype alternative would indeed be welcome. What are the chances it would retain the POTS bridges though? I frequently use Skype to call long distance to land line numbers. I could actually reverse that and have a land line number that forwards to my local Skype if I wanted.
I do see an OSS version being able to match or improve on Skype to Skype functions. Here’s hoping that OSS project can also manage to make a business of it and provide access to POTS lines. I’d be happy to give them my $2.95 a month instead of Microsoft.
Given Hackerspaces and community projects that have managed to setup and provide local ISP services, it’s possible. Come on all you Hackerspaces out there; get coding some voip and see if you can make it happen.
I’m sure there are a lot of OSS alternatives to skype. The problems with these alternatives are:
1) Quality – sound and video quality over slow connections made skype so loved. I’m sure though that there are products that offer good quality.
2) Market – Skype is not standard in any way but it is the de facto standard.
The problem with chat and VoIP is that you need a program that is compatible with what your friends are using. And since your friends have other friends and so on, you need to convince a hole market to adopt a new program.
Or at least to convince enough people to try a new chat(VoIP) and have to programs with the same functionality running at the same time.
Edited 2011-05-10 14:54 UTC
You don’t need to all use the same program. But you do all have to use the same protocols. And you all have to agree on a “central connection point” to find each other. That’s where most OSS VoIP/chat systems fall down. And where most user’s comprehension falls down (“Do you Skype?” “No, I use Ekiga.” “Oh, so I can’t talk to you.”)
There are lots of OSS VoIP solutions out there. But getting any three of them to talk to each other is the hard part. Especially when you add in “clueless” users.
That’s what Skype got right: make it brain-dead (relatively) simple to get an account, install the software, and start chatting with people.
Ekiga ? Google Talk ?
Ekiga, yes. Google Talk isn’t opensource, and isn’t available for Linux either…
Actually Google Talk is available for linux, it works inside GMAIL via an installable plugin:
http://www.google.com/chat/video
http://www.google.com/chat/voice/
Also, google talk works with pidgin and kopete and it is pretty much open source as it uses Jabber. Not sure about the voice side, but both kopete and pidgin can be used to connect to google talk and both support voice, so I think it is open source.
Actually, I’m pretty sure that
1/GTalk is based on open standards like Jabber/XMPP which anyone can easily implement, and there have been implementations of it in Pidgin/Empathy.
2/There’s a version of Google Talk for Linux, in the form of a browser plugin which runs inside of GMail.
Google Talk works over the XMPP protocol.
For the voice/video side works on an extension of the protocol called jingle although it’s a bit different than the “official” one (it’s opensource anyway as it’s under a bsd licence )
Regards
via http://jitsi.org
also: http://www.jitsi.org/index.php/Main/Features
Edited 2011-05-10 09:16 UTC
You’ve GOT to be kidding? ..written in Java .. consumes 250 MiB with 3 protocols active and 5 users online.. and i thought Skype was bloated crap!
I guess rewriting Pidgin in Java increases memory consumption by a factor 20!
Edited 2011-05-10 10:23 UTC
Jitsi is nowhere near the same as Skype.
First of all, it relies on 3rd party IM networks and protocol which means it’s bound to have days when it’s not working because the API got changed. Also, there’s the risk that Microsoft/Yahoo/etc. will just lock these alternatives out of their network completely.
Secondly, it doesn’t do phonecalls to, you know, actual phones. That’s one of the most important selling points of Skype, that it can place regular calls to cell-phones or regular phones anywhere in the world.
Thirdly, it doesn’t do SMS messages either. Some people use Skype for that too.
Fourth, it’s is an EVEN bigger pig on resources than Skype is. Geesh.
That’s not the case if you use open solutions like XMPP and Jingle (http://en.wikipedia.org/wiki/Jingle_%28protocol%29).
AFAIK there are (paid) SIP gateways.
I am not familiar with them tho, and a price of such service may be a different story.
I agree.
PS. I just responded to RshPL‘s claim by providing an alternative for video calls his family could use (other ones: http://altrn.tv/dmBw8x).
(I have no affiliation with Jitsi or any other 3rd party whatsoever, just wanted to help.)
But then you need to figure out what XMPP server you wish to connect to and so on, and THEN get all your friends and family on the same server. That’s too much hassle for the general populace to bother with, it needs to have a central server that’s used by all.
Again, that is not convenient. Users would have to learn what the hell SIP is anyways and then find someone to provide paid SIP services and so on, and THEN continue to configure the client to use the relevant settings. Not going to happen.
Yeah, there’s plenty of alternatives if you’re just going to use client-to-client video chat, but as a Skype-alternative Jitsi doesn’t come even close.
No, XMPP is decentralized: different parties can use different servers and communicate without any problem (http://xmpp.org/about-xmpp/technology-overview/).
I agree with your other arguments.
End user needs simple, seamless and effortless solution.
Example: Google Talk tries to provide that using interoperable (XMPP/Jingle) technologies. Mobile video calls using Jingle (http://goo.gl/326Dd) are a good step, but there is still a lot to be done there.
I hope Microsoft/Skype takeover will motivate other open solutions to go in that direction too (XMPP/Jingle).
Edited 2011-05-10 12:32 UTC
Try Google Talk
Not available for Linux: http://www.google.com/talk/otherclients.html
Available for linux, try kopete / pidgin both connect to google talk and both support voice to other google talk users, also works in browsers, See:
http://www.google.com/chat/video
http://www.google.com/chat/voice/
There is also a google talk app available in the chrome market place, which seems to use Flash, but again supports Linux
Also probably the end of Skype for Android…
And possibly the end of the iPhone version too. I can just see Apple banning Skype because it directly competes with Facetime, and it’s now owned by a direct competitor on top of that. Actually, when you consider Apple’s attitude, the Android version is probably more likely to stay alive.
I don’t know why, but it looks (to me) like bad news for the users.
Can anyone, other than Microsoft and Skype OF COURSE, sane qualify this as anything other than “naive wishful thinking”? I would have laughed reading that line if I hadn’t had such a bad gut feeling about the Microsoft+Skype marriage.
I am sure that’s not going to last.
Off-topic: the article needs some additional editing to be free from typos.
I don’t think Microsoft will stop doing anything Skype is doing today, including Linux support. First, because many would complain about Microsoft trying to kill Linux the bad way (and that would also spark anti-trust fire), second because Microsoft can make money out of Skype for Linux, even if not a pile of money.
While we need to wait to understand what plans MS really has for Skype (merging with Live Messenger would be too easy…), I think this is someway a marketing move.
There’s difference between having an high market capitalization (Apple, Google) and sitting on a pile of *cash* (Microsoft) and I think MS wants to tell people “Hey, maybe someone has an higher market capitalization than ours but how much money they REALLY do ? And how much money they REALLY have now ?”
I think Microsoft wants to tell anyone that looking at capitalization, the way analysts do now, and revenues per share could be less important that looking at other factors, including who has much money stored in vaults.
“Due to increasing customer requirements and a need to provide the highest quality possible service we have decided to temporarily withdraw support for Skype on some of the less popular platforms. We understand this may prove an inconvenience to some of our customers and we deeply apologize. This decision has been made after careful consideration and we do believe it will allow us to provide even better quality service. In the meantime, you are welcome to try the Skype for Windows 7 Ultimate Professional edition.”
There is no such “Windows 7 Ultimate Professional edition”. Stop trolling.
it’s a play on Microsoft’s marketing departments overuse of some words on their packaging.
Kind of like Ultimate Professional for Enterprise Small Business User edition.
I always liked Windows CE Phone Mobile Pocket PC Edition Embedded Compact.
Both are missing my the first, and my favourite:
… for work groups.
What a great tag line that was. I had no idea what a work group was at the time. But it sounded good, working in a group.
And it’s showing this by taking money out of its vault and burning it, thus leveling the playing field. This valuation makes its valuation of aQuantive or Yahoo look sane.
Buying Skype doesn’t seem like burning money out. Rather it looks like buying out a very significative player and yes, for a lot of money. Which is probably part of the plan.
It was quite significative that MS overtook Google and who else? Facebook maybe. Outmaneuvered on money, not talking.
Buying something at the wrong price does not make a victory. Facebook should be very thankful they didn’t take on this debt. $8bn in debt at 5% == $400mn/year.
I mean, Skype has revenues of $750mn or so. Just paying interest requires half of that revenue to be profit. But how much of that is profit? Zero. How long does it take to get that $8bn back? Forever, unless the business can be turned around. Skype is only significant in terms of brand – in terms of business, it’s a nonexistent player.
So for MS to get its money back, the first thing is needs to do is radically restructure Skype into profitability. I hope there are smart people figuring out how to do that. Even if they can, I struggle to believe that MS couldn’t have used its other brands to get that share for less than $8bn. (That’s essentially everything MS has lost in all of online services for the last 5 years – see http://www.businessinsider.com/chart-of-the-day-microsoft-online-op… .)
The valuations here are just unhinged from reality. Remember when Rupert Murdoch paid $500mn for MySpace? At the time it was a dominant player with a much larger network and that valuation proved to be extremely optimistic. IIRC it’s now written down to $100mn, and even that looks high. It’s always very speculative to buy something that doesn’t bring in cold, hard cash.
Mmm, Skype on the Xbox360… Now THAT is handy.
Quote: “If Microsoft ever does applications for Linux, it means I’ve won.”
Im waiting for Microsoft Linux distro now.
Didn’t they contract that project out to Novell?
(Zing!!.. couldn’t resist)
+1
It has been available since 2003, if you believe this web page: http://www.mslinux.org/
I was right. Seteve Ballmer confirmed that Microsoft will support Linux platform. Yahooooo!
http://tinyurl.com/4xdmnhb
Now. Where is that Linux distro info at microsoft.com?
The interface is terrible and skype got worse and worse which each release… I always hope the trend will reverse. It used to be such a simple and intuitive app.
I have this funny feeling the interface will see a whole new level of terrible once Microsoft start trying to put a ribbon in there.
So MS is now shipping a Qt product. Wonder how long it’ll take for Skype to get a .net rewrite, or for it to be merged with MSN.
Whatever happened to Google Talks submission for voice conferencing through the Jabber protocol?
I don’t know any details on how that is/would-be implemented but on first sight but the thought of sending more of my traffic through Google’s information harvesting servers makes me pretty leary.
What we really need is something that does end to end encryption under the control of the user; no Certificate Authority racket or “trust us, we’ll handle the encryption for you” service provider in the middle like the current mobile phone networks.
With end to end strong encryption, I could have more trust in streaming my data bits through Google or any other provider’s servers much like I trust Dropbox when used to host Truecrypt volume files.
With Skype, Microsoft could, in theory, set itself up as a whole mobile network operator in a position to compete with the established players.
It already has the ISP infrastructure from MSN in place (the ISP not the messenger app). So it would simply be a case of developing/buying mobile data coverage (no need for ‘voice’ infrastructure).
One 4g licence and they could undercut the UK mobile operators in terms of cost of calls.
4g licence(s) are going on sale here in 2012 and expected to sell for much less than 3g did. The current estimates are that 4G will cover 95% of the UK
Would certainly turn the status quo on its head here…
I would actually welcome that. Not that I would EVER want Microsoft as my carrier – I’d rather shoves pieces of faeces-drenched glass under my fingernails – but anything to shake up the carriers is welcome by me.
Thanks for that horrific mental image! (yuck)
Anyway, I doubt this is going to cause any impact on the wired and wireless voice carriers. I have a feeling that, as mentioned elsewhere, Skype technology will end up embedded in Windows 8, specifically for use on tablets but probably enabled on any device. By that time T-Mobile will be swallowed by AT&T, and likely Sprint as well by Verizon. That leaves us Microsoft-friendly AT&T vs Android-friendly Verizon, and VoIP concerns will wane in favor of the epic battle between the two carriers for your metered data consumption.
I also don’t think they would automatically kill the ports to Linux and other OSes; that would cut out a significant chunk of their Windows customers’ contacts. I doubt they will do much to improve performance and features on those ports either though; after all, they have an obligation to their shareholders to make Windows appear to be the superior platform.
And finally, don’t forget that Google Voice is still out there, integrates perfectly with Android phones (and fairly well with Blackberry phones as well) and is free for another year in the US. I’d be willing to bet that Microsoft has plans to use Skype to try to take a piece of that pie too.
But they could very well neglect. Leave it functioning but slowly reduce support until it’s far enough behind that users have to start giving up on it too. Then they trot out the old “we do not see enough market interest to continue this development branch”.
I do truly hope I’m being overly pessimistic.
I hope you are too, and we may both be completely wrong. But Microsoft has a certain reputation…
Anyway it goes though, I don’t think it’s ever really a good thing when a company that powerful buys up a smaller company. Someone always loses out in the end, and far too often it’s the consumer.
I for one am heartbroken that the best cellphone company in the US, a company whose customer support has me believing in “the customer is always right” again, is less than a year away from being chewed up and spat out by AT&T. I plan to leave T-Mobile by the end of the year, when I am free from my contracts. Sadly, I’ll likely go to a prepaid service and become my own customer support, since the rest of them don’t live up to even AT&T’s poor standard.
Me thinks I’ll be confirming that I have a copy of the Skype for Deb5 64bit encase there never comes a Deb6 64bit package.
And, AT&T. I know people who still have tramma scars from beign in call centers when the company was baught up by AT&T. I’m empathetic. Enjoy the carrier while you can. Hopefully there is local competition if things take a turn for the worst.
I have a friend who works as a CSM in our local AT&T call center. He advised me to try out Virgin Mobile if I don’t want to get swallowed up by AT&T next March. I’m definitely staying away from Verizon; as much as I loathe AT&T I hate Verizon even more. Sprint (parent of Virgin Mobile in the US) has decent coverage in my area so I should be good to go.
I figure by the end of the summer I can afford to break out of my contracts and spend the $200 for a Virgin Mobile Android phone that is more capable than my Cliq, and recoup some of the money by selling off my old devices (Cliq, Blackberry Curve and Nokia Nuron). I’ll also be paying about $100 less for the actual monthly service.
With the recent Google anouncements, you may even get timely updates for that new Android device by then. It could be improvements all around.
Rrrrright, because it’s not like Microsoft has any experience running a large-scale network that supports realtime communications on a global scale like Xbox Live…
Oh, wait…
How do you figure? They own ZERO Wireless or Wired Backbone.
If they purchase part of the 4G network, thats going on sale, they Will own the rights to use that in the same was as current wireless telcos do. This at a swipe would give them data coverage over 95% of the UK (official estimate).
Calls/sms/MMS all using the skype/internet protocols over their data network. Why would they need the wired network?
Their expirience as an ISP would doubtless be an asset in managing these data networks. Its a question of if they can be cheap enough to make people switch.
Dont get me wrong, we are prob talking a couple more billion of investment, but this is certainly achievable if they were so inclined and would open up a whole new market to Microsoft.
Oh sh*t.
My first reaction: thanks god it’s not facebook!
Second: F*ck!
Now: now what?
For those not aware, the Skype audio codec source code is available here: http://tools.ietf.org/draft-vos-silk-02“