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How Google Stopped Itself From Buying Skype

The new owners of Skype are none other than the largest software maker in the world – Microsoft. It seems fitting that Microsoft adds another premier service to its stable, but the interesting thing is that Google contemplated buying Skype during an earlier period.

In fact, much of Google was on board to buy Skype until a clever plan from inside the company sabotaged the entire thing.

Wesley Chan, now a partner on the Google Ventures team, at the time in 2009 was in charge of Google Voice. Chan went to Europe to check out Skype, and came away with the impression that it was a bad match for Google's business.

“The worst thing about peer-to-peer is that it doesn’t work well with Google,” Chan told book author Steven Levy for In the Plex in February 2010. “Peer-to-peer just eats up your bandwidth, right, it’s like the old technology.”

Chan figured that an acquisition for Skype could take up to two years to complete after regulations approvals. “It would’ve been disastrous,” he said.

Chan had to find a way to sabotage the deal for the good of the company, and he and Salar Kamangar, one of Google’s first 10 employees and today's CEO of YouTube, went to Google co-founder Sergey Brin with a plan.

In a Google meeting about the acquisition plan, Chan would play the part of an acquisition supporter. Brin, on the other hand, would shoot down Chan's ideas and ask questions that would lead to the conclusion that buying Skype would be the wrong move for Google.

During Chan's presentation in favor of purchasing Skype, Brin took the floor “and started getting really negative,” Chan said. “He asked a series of questions that he knew would get unsatisfactory answers. Is this purchase data-driven? Who is going to spend all those months commuting to Europe? (No one stepped up.) How long is the government review expected to take?

“[Sergey] looks at me and says, ‘Why would I want this risk? We have a team capable of building the carrier, we have the users, we have hundreds of millions of Gmail users, why do we need to have Skype?’ And at that point, Sergey gets up and says, ‘This is the dumbest shit I’ve ever seen.’ And Eric gets up and walks out of the room, and I’m like, okay, the deal’s off.”

That, according to one account, is why Microsoft, and not Google, owns Skype.

Read more from Wired.