Microsoft Acquires Skype: Anticipating the EU’s Next Step

So the iPhone announcements today blew away the speculators. And we’ll have to listen to another year of pundits speculating about the iPhone 5. So here’s something else to speculate about;we should have some direction as to where this story is going by the end of the week.

According to the recent information the European Union’s next statement on the Microsoft acquisition of Skype should appear in three days (Oct. 7). However, in the interim there are a couple of points to note:

• An Italian VoIP provider has filed an objection requesting that the purchase be blocked unless Skype is “removed from Microsoft’s ubiquitous Windows Office platform”. To which I can only say, “Huh?” While there was in the past an email toolbar linking Skype information into Outlook, that quietly went away a couple of years ago. (I had been a beta tester for it.) I have yet to find or install any Office product with Skype embedded. Somehow it’s tough to remove what is not there!
• Skype Journal’s Phil Wolff has written a long tome on Should the US have OK’d Microsoft’s purchase of Skype? Should the EU? He outlines many considerations that become overwhelming in the resulting comprehensiveness. It provides a range of where there might be competitors who could be threatened, but many are either fairly strong in their own niche or have markets with some level of feature set where Skype integration would actually be of benefit.

One can get embedded into discussing feature set, interoperability, protocol and other technology logistics; it can get to be a very complex and time demanding process. The bottom line should be a simple ruling that takes into consideration the need for there to be the ability:

• for any third party to have access for embedding Skype features (via, say, an expanded SkypeKit) to strengthen their own offerings through real time communications enhancements as well as
• for the various Microsoft offerings (such as Outlook) to have access to an API set for third parties to integrate their offerings, including real time communications services, into a Microsoft offering – via industry standard protocols. But developers, such as former Skype employee Peter Kalmstrom, have already demonstrated how to leverage Microsoft offerings successfully through innovative add-ons and services.

Bottom line is that coming out of this review should be an environment that encourages innovation, whether by Skype or third party services, delivering offerings that have the potential to actually achieve market adoption and success. Microsoft has to recover its $8.5B investment; developers need to see a fair and profitable opportunity for identifying and addressing market niches that can build on Microsoft platforms.

In passing on a review the U.S.’s regulatory authorities did not see any issues. The EU seems to figure out some way to be more aggressive, especially when it comes to Microsoft; some other issues are discussed in a previous post here. It will be interesting to see what comes out from the EU Competition Commissioners on Friday.