GraemesPSP (99.49)

Could Skype become MySpaced or even worse Netscaped!

July 19, 2012 – Comments (2) | RELATED TICKERS: MSFT

Wall Street News Journal Corp bought MySpace for a bit over half a billion. They let it rot and few years later they managed to sell it for about $30 million.  Even worse, Netscape was purchased for $10 billion not long before AOL was bought out by Time Warner.  And then it almost seemed like they purposely tried to kill it themselves except that I don't think anyone is smart enough to actually think of a strategy that would disappear the biggest and best known brand in the Internet space as fast as they did.  

 I wonder now if Microsoft is going down the same path with Skype.  The reason I am wondering this is because a friend of mine is pressuring me to get rid of Skype on my iPhone and use something called Viber instead.  The reason - Skype has to run in the background, consuming battery and processing power in order to work.  If Skype is running, it is running down my battery.  And if it is not running, I won't be receiving any Skype calls. Viber on the other hand uses the Apple notification system.  So it doesn't need to run at all.  Except if someone calls me the iPhone will automatically start Viber and let it answer the call.  

 When I installed Viber on my phone I was surprised to see that almost 1/4 of my contacts had already had it installed.

 Now, I'd guess it would take about 10-20 man hours for Microsoft to update Skype to use the Apple notification system. To be fair, assuming the beaurocracy of a company the size of microsoft, it could well be 100-200 man hours.  Microsoft paid $8.5 billion for Skype.  So 200 hundred man-hours at $100 an hour ($20,000) would be a pretty good investment to stop Skype ($8.5 billion) becoming a worthless asset.

 I'm sure Roger Waters could write songs about this.  But for the sake of a mere $20,000 update Microsoft is at risk of MySpacing their entire $8.5 investment in Skype.