Microsoft Acquires Skype In 2011. Microsoft purchased the online telecom company, Skype, to improve the video and voice communication capabilities of its Office products. In addition to gaining access to Skype's 107 million users, who were, on average, connected for over 100 minutes per month, the deal kept the platform away from rivals Google and Facebook. Microsoft knew that its business clients would benefit from Skype's friendly user-interface and sophisticated tools and features. However, the company currently had the homegrown Lync product in its portfolio, which was designed to integrate with Outlook and serve as clients' primary communications platform. Because of the redundancy of the two brands, Microsoft ultimately decided to eliminate the Lync brand and rebrand the tool's properties as Skype for Business. This allowed them to take advantage of the Skype brand's familiarity among consumers. Lync users could enjoy the same features they were used to but with the sleeker Skype interface and additional Skype features. Since many Lync users were already users of Skype's consumer product, the transition was fairly seamless. Microsoft initially managed the transition by giving IT companies two different Skype for Business options, with varying levels of departure from the Lync interface. Also, by maintaining core Lync features with which its customers were familiar. the transition did not interfere with one of Microsoft's core brand attributes--productivity. Overall, eliminating the Lync brand helped Microsoft make the most out of its Skype acquisition. Questions: 1. Make an argument for Microsoft to retain both Skype and Lync. 2. Consider how Microsoft's decision might have been affected if they had owned Skype and acquired Lync.

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Microsoft Acquires Skype

In 2011. Microsoft purchased the online telecom company, Skype, to improve the video and voice communication capabilities of its Office products. In addition to gaining access to Skype's 107 million users, who were, on average, connected for over 100 minutes per month, the deal kept the platform

away from rivals Google and Facebook.

Microsoft knew that its business clients would benefit from Skype's friendly user-interface and sophisticated tools and features. However, the company currently had the homegrown Lync product in its portfolio, which was designed to integrate with Outlook and serve as clients' primary communications platform.

Because of the redundancy of the two brands, Microsoft ultimately decided to eliminate the Lync brand and rebrand the tool's properties as Skype for Business. This allowed them to take advantage of the Skype brand's familiarity among consumers.

Lync users could enjoy the same features they were used to but with the sleeker Skype interface and additional Skype features. Since many Lync users were already users of Skype's consumer product, the transition was fairly seamless.

Microsoft initially managed the transition by giving IT companies two different Skype for Business options, with varying levels of departure from the Lync interface.

Also, by maintaining core Lync features with which its customers were familiar. the transition did not interfere with one of Microsoft's core brand

attributes--productivity.

Overall, eliminating the Lync brand helped Microsoft make the most out of its Skype acquisition.

Questions:

1. Make an argument for Microsoft to retain both Skype and Lync.

2. Consider how Microsoft's decision might have been affected if they had owned Skype and acquired Lync.

Expert Solution