Growing Your Company – Current Event – Microsoft’s Recent Acquisitions

A few months ago Microsoft’s acquisition of Skype was finalized in a major deal for the company at $8.5 billion. This was the largest purchase in Microsoft’s history. Their previous largest acquisition had been that of aQuantive an online ad company at $6 billion. The acquisition of Skype was finalized in October 2011, but Microsoft has faced much opposition from various companies who see the purchase as a threat.

Skype is a well known company with billions of users who favor it over similar programs. There is no doubt that Microsoft would see huge successes when it put Skype alongside its other software. Microsoft has Xbox Live which is similar to Skype but has not reached as many users as the acquired company. This acquisition will be a great addition to all of Microsoft’s systems bringing along the many loyal users Skype currently has.

Although this M&A has been great for both Microsoft and Skype, there are other companies who see this as a major threat. Cisco Systems Inc., just a few months ago challenged the European Commission’s approval of the acquisition (Jarzemsky 2012). Microsoft has been adamant that it will continue to support all of Skype’s non-Microsoft systems. Cisco has been trying to grow in the video communications market and uses Microsoft as one of its suppliers. Although this could be seen as a threat to Cisco, this is how companies work and grow. They take chances and jump at opportunities. Google had previously been reported to be bidding for Skype, but Microsoft won out.

Just two weeks ago there was word that Yammer, which is a social media network for the workplace, had agreed to sell itself to Microsoft (Vascellaro and Ovide 2012). It will be acquired at an estimated price of $1 billion. There are many out there that see these acquisitions as very out of character for Microsoft Corp., since it tends to make smaller M&A in the past.

Microsoft is a company with a great reputation that makes very strategic moves. There is no doubt that any purchases Microsoft makes will be implemented well alongside their other systems and devices. Now we are left to wonder what Microsoft’s next big move will be. They have been taking bigger risks in the last couple of months so we will have to see if they pay off. Especially that of Skype who’s purchase had previously been a failure for eBay, who sold the company at a loss.

The next big acquisition for Microsoft seems to be on the horizon. And this time it seems like it could be Yahoo!, the company has been struggling and is said to be taking bids. We will just have to wait to see the outcome of this and how Microsoft will integrate Yahoo! alongside its many systems and devices.  

Sources:
"Microsoft Completes Acquisition Of Skype." Channel Insider (2011): 1. Business Source Complete. Web. 22 June 2012.

"Microsoft Finalizes Acquisition Of Skype For $8.5 Billion." Eventdv 24.10 (2011): 11. Business Source Complete. Web. 24 June 2012.

“ Cisco Appeals Europe’s Approval of Microsoft-Skype Deal.”Jarzemsky, Matt.Wall Street Journal (Online) [New York, N.Y] 15 Feb 2012: n/a.