Microsoft company Skype Approach

 Microsoft Skype ip telefoni Strategy Dissertation

RESEARCH OF MICROSOFT'S

STRATEGIC BUY SKYPE

Michael jordan Osypenko

Veranika Zdanovich

Ruslan Samchuk

Denis Solyan

KEY GOALS OF PROJECT

• Analyze Microsoft's latest purchase of Skype

• Understanding Skype's and Microsoft's business

types and their merchandise portfolio respectively

• Microsoft's reasoning lurking behind the acquisition

• Just how Microsoft got best benefits from the

acquisition

• To analyze data support of acquisition

• Make your very own critical conslusions

KEY FACTS AND FIGURES

tenth May 2011: Microsoft acquirers Skype by a price of $8. a few

billion (cash)

Financial many (Skype 2010):

other companies

High relative to

Organization value/EBITDA: > 32x

sector!

Skype keeps growing rapidly (from 2009 to 2010):

User base: forty percent

Calling minutes: 150% (18 months)

Income: 20%

EBITDA (adj. ): 40%

within the IT

AIMS OF THIS ACQUISITION PERTAINING TO

MICROSOFT

Proper reason

In line with Microsoft's growth strategy

Prevent competitors such as Google and Apple from buying

Merchandise reason

Skype is the perfect enhance to Microsoft's existing items

Live video discussion on House windows computers and Xbox 360

Communication when working with Microsoft Workplace

Call-back and instantaneous messaging features in Outlook

Increase competitiveness on the Windows phone app mobile platform

Network reason

Power the network effects

Direct series communication with Skype's significant customer base (ca. 700 million)

Connect Skype users with Lync, Outlook, Xbox 360 live and other

communities

MICROSOFT CAN EASILY LEVERAGE SKYPE IN

A NUMBER OF WAYS

Pros:

Acquisitions is in range with the company's growth technique

Stop competitors from acquiring Skype

Skype's technology can be complementary to MS products and can be included in all from the company's organization segments

The company received access to Skype's large customer base

Cons:

Concerns about the excessive acquisition price

Problems to combine (retaining staff, organizational and so forth )

MICROSOFT COMPANY

World's largest software business

based on software program revenue.

Microsoft's mission is always to create

technology that changes

the way people work,

enjoy and talk.

MICROSOFT'S PRODUCT

PORTFOLIO

REVENUE AND PROFIT OF

MICROSOFT COMPANY

MICROSOFT'S OBJECTIVE AND APPROACH

• Time is a important factor in this kind of business

it takes much longer the perfect time to develop

a well functioning item themselves than to acquire.

• By buying Ms gets Skype's existing consumer bottom network effect

• Large pile of money is being offer work

" Strategic relationships and acquisitions

have always enjoyed an important position

in Microsoft's strategy for expansion

and technology leadership. ”

Steven A. Ballmer (Microsoft CEO)

leverage the

SKYPE BUSINESS MODEL

Freemium

Free-of-charge providers

High quality services

SKYPE IP TELEFONI

SKYPE INCOME

THE DEAL

-- Total thought would be $8. 5 billion in cash

- Skype will become a new division of Microsoft

- Microsoft's largest purchase till time, surpassing the $6 billion paid for aQuantive The division of the thought between Skype's shareholders  Silver pond and other buyers - $4. 76 billion dollars for 56% stake that they can purchased by eBay pertaining to 1 . on the lookout for billion in 2009

 craigs list – 2 . 55 billion dollars for thirty percent stake (they had bought Skype in 2005 to get 2 . six billion and sold it for 1 ) 9+2. 55=4. 45 billion)

 Skype's founders – 1 . nineteen billion intended for 14% risk

REACTION TO ACQUISITION ENOUNCEMENT

KEY RISK FOR MICROSOFT COMPANY

The rate of economic performance may well decline

CRUCIAL QUESTION OF MICROSOFT

Just how have the buy affected on the

share overall performance?

FINANCIAL SUMMARY OF SKYPE AND

MICROSOFT

CAUSES OF NEGATIVE EFFECT

Skype did not seem to improve Microsofts and success

The valuation of Skype was very high (10x revenues and 34x

EBITDA v/s the industry common of...

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