Skype

  • Share
  • Read Later

Microsoft was a late arrival to this thing called the Internet. And it seems the company has never ceased playing catch-up in its efforts to close the gap with Google, Apple and Facebook. Microsoft's announcement that it is buying Skype--the voice-over-Internet-protocol provider--for $8.5 billion in cash is its most expensive effort to reduce that gap.

With the Skype acquisition, Microsoft will have a bigger part in the multichannel, multiplatform world in which we live. Think of Skype as a giant switchboard for the company, which will now be able to plug users in to all kinds of Microsoft devices. Yes, it is paying a premium for a business that isn't profitable. But given that Microsoft has about $50 billion in cash on hand, the purchase is one it can easily absorb.