Skype Founder: Microsoft Has Huge Opportunity

Skype founder Niklas Zennstrom admitted that Skype's full potential hasn't been realized yet – there is a lot more work to do on the core technology to improve quality of video calls as it is. But he's also confident that the overall Skype experience will improve as the capabilities of networks and smartphones also improves.

During an interview at the e-G8 forum in Paris, Zennstrom indicated that Microsoft needed to capitalize on its (insane) $8.5 billion acquisition of Skype by expanding into mobile and improving video call quality. "I think that Microsoft has a huge opportunity to integrate it into a lot of their different services," he said.

Reuters reports that Zennstrom declined to comment on how Microsoft could incorporate Skype into its business, leaving it up to the Redmond company to disclose the details. "Of course they have so many different assets," he said. "If they do a good job integrating Skype, the company can grow even more."

If that comment sounds disconnected, there's good reason: Zennstrom is no longer part of the management and plans on selling off his shares in Skype when the deal with Microsoft closes. Currently Skype shares are down more than six-percent since the deal with Microsoft was originally announced on May 10.

Zennstrom founded Skype along with partner Janus Friis back in 2003. Since its launch, the VoIP service has grown to 145 million users a month. E-commerce giant eBay purchased the service (along with Zennstrom's shares) for $2.6 billion in October 2005, but then turned around and sold off 65-percent of its Skype holdings in 2009 to an investor group – including Zennstrom – for around $2.025 billion. When completed, Skype will be Microsoft's largest acquisition to date and headed by Skype's former CEO Tony Bates.

Zennstrom believes that Skype is now in its second stage of evolution, moving from being a mere PC-to-PC VoIP service to focusing on connecting friends and family through video, mobile devices and desktops. "That is a huge opportunity that still has room to grow," he said. "We still all travel a lot for meetings because you can't match the intimate experience of seeing someone in person, even with Skype video calling."

Microsoft head honcho Steve Ballmer announced the acquisition two weeks ago, saying that "Skype is a phenomenal service that is loved by millions of people around the world," According to a press release, Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a "wide array of Windows devices," and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms.

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  • eddieroolz
    He's right. Skype has a lot of room to grow - and potentially displace other competitors like FaceTime. Its quality is quite good by itself already, but it *can* be improved.

    Now of course, we have to hope that North American telecoms don't ruin the whole plan. I'm looking at you, Canadian telecoms.
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  • jhansonxi
    "Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms."

    Cutting off third-party integration isn't an improvement.
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