Microsoft’s Online Head Qi Lu: Skype Deal Is “Key Addition” of Marquee Consumer Brand

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going forward, the various parts of the company will be able to work with the Skype management teams to unlock the value.”

Indeed, it sounds like the deal will be important for boosting Microsoft’s offerings in communications and collaborative software. “Skype is a very valuable consumer online services asset,” Lu says. “It’s one of the marquee brands, and its user base is going through rather sustained growth. Particularly in scenarios that we really think are critical for the long-term future, which is connecting human communications with a lot more engaging, richer forms, [such as] video. These particular assets will be a key addition to the overall Microsoft online presence, collectively.”

Lu emphasized “the strong synergies that Skype will have in other Microsoft key assets.” As examples, he pointed to “powerful scenarios” that could be enabled by “having the ability to combine Skype with Xbox Kinect, Skype with Windows Phone, and even synergies on the enterprise side—Skype with Lync [instant messaging].”

Critics of the deal say that Microsoft overpaid for Skype by several billion—and that the Redmond, WA, firm faces big challenges in integrating Skype’s technology and business into its corporate machine. Lu declined to comment on these criticisms. He also wouldn’t comment on what, if any, lessons Microsoft has learned from the integration of Seattle-based digital advertising firm aQuantive, which previously had been Microsoft’s biggest acquisition, at over $6 billion, in 2007. (When Xconomy contacted several aQuantive alums earlier this week seeking thoughts on how the Skype acquisition might relate to their experience joining Microsoft, we got no takers either.)

So this deal is clearly a case of wait and see. My take is that, if nothing else, Microsoft kept Skype out of the hands of its chief online competitor, Google. And it seems clear that Skype, plus Microsoft’s partnership with Facebook, will provide a much bigger social platform than just Bing, MSN, Windows, and Xbox, and will be able to reach a lot more consumers—and bring them into the Microsoft fold.

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Gregory T. Huang is Xconomy's Editor in chief. E-mail him at gthuang [at] xconomy.com. Follow @gthuang

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