Microsoft Skype Strategy
ANALYSIS OF MICROSOFT'S
STRATEGIC ACQUISITION SKYPE
Michael Osypenko
Veranika Zdanovich
Ruslan Samchuk
Denis Solyan
MAIN GOALS OF PROJECT
• Analyze Microsoft’s latest acquisition of Skype
• Understanding Skype’s and Microsoft’s business models and their product portfolio respectively
• Microsoft’s reasoning behind the acquisition
• How Microsoft got best benefits from the acquisition • To analyze data support of acquisition
• Make your own critical conslusions
KEY FACTS AND FIGURES
10th May 2011: Microsoft acquirers Skype at a price of $8.5
billion (cash)
Financial multiples (Skype 2010): other companies
Very high relative to
Enterprise value/EBITDA: > 32x sector! Skype is growing rapidly (from 2009 to 2010):
•
User base: 40%
•
Calling minutes: 150% (18 months)
•
Revenue: 20%
•
EBITDA (adj.): 40%
within the IT
AIMS OF THIS ACQUISITION FOR
MICROSOFT
Strategic reason
•
In line with Microsoft’s growth strategy
•
Prevent competitors such as Google and Apple from buying
Product reason
•
Skype is the perfect complement to Microsoft’s existing products
•
Live video chat on Windows computers and Xbox 360
•
Communication when working with Microsoft Office
•
Call-back and instant messaging features in Outlook
•
Increase competitiveness on the Windows Phone 7 mobile platform
Network reason
•
Leverage the network effects
•
Direct line communication with Skype’s large customer base (ca.700 million) •
Connect Skype users with Lync, Outlook, Xbox Live and other communities MICROSOFT CAN LEVERAGE SKYPE IN
SEVERAL WAYS
Pros:
•
Acquisitions is in line with the company’s growth strategy
•
Prevent competitors from acquiring Skype
•
Skype’s technology is complementary to MS products and can be integrated in all of the company’s business segments
•
The company got access to Skype’s large customer base
Cons:
•
Concerns about the high acquisition price
•
Problems to integrate (retaining employees, organizational etc.)
MICROSOFT
World’s
STRATEGIC ACQUISITION SKYPE
Michael Osypenko
Veranika Zdanovich
Ruslan Samchuk
Denis Solyan
MAIN GOALS OF PROJECT
• Analyze Microsoft’s latest acquisition of Skype
• Understanding Skype’s and Microsoft’s business models and their product portfolio respectively
• Microsoft’s reasoning behind the acquisition
• How Microsoft got best benefits from the acquisition • To analyze data support of acquisition
• Make your own critical conslusions
KEY FACTS AND FIGURES
10th May 2011: Microsoft acquirers Skype at a price of $8.5
billion (cash)
Financial multiples (Skype 2010): other companies
Very high relative to
Enterprise value/EBITDA: > 32x sector! Skype is growing rapidly (from 2009 to 2010):
•
User base: 40%
•
Calling minutes: 150% (18 months)
•
Revenue: 20%
•
EBITDA (adj.): 40%
within the IT
AIMS OF THIS ACQUISITION FOR
MICROSOFT
Strategic reason
•
In line with Microsoft’s growth strategy
•
Prevent competitors such as Google and Apple from buying
Product reason
•
Skype is the perfect complement to Microsoft’s existing products
•
Live video chat on Windows computers and Xbox 360
•
Communication when working with Microsoft Office
•
Call-back and instant messaging features in Outlook
•
Increase competitiveness on the Windows Phone 7 mobile platform
Network reason
•
Leverage the network effects
•
Direct line communication with Skype’s large customer base (ca.700 million) •
Connect Skype users with Lync, Outlook, Xbox Live and other communities MICROSOFT CAN LEVERAGE SKYPE IN
SEVERAL WAYS
Pros:
•
Acquisitions is in line with the company’s growth strategy
•
Prevent competitors from acquiring Skype
•
Skype’s technology is complementary to MS products and can be integrated in all of the company’s business segments
•
The company got access to Skype’s large customer base
Cons:
•
Concerns about the high acquisition price
•
Problems to integrate (retaining employees, organizational etc.)
MICROSOFT
World’s