How Microsoft And Skype Embarrassed Google

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If Microsoft put together a welcoming committee for Google’s new CEO Larry Page as Page assumed his new job recently, it couldn’t have done a better job.

First the Redmond, Wash.-based software giant took the wraps off its Office 365 beta, which turns out to be far and away better than any single aspect of Google’s Google Apps offering.

Now, Microsoft announces it's buying Skype for $8.5 billion, and Page and Google have never looked weaker and more vulnerable from a solution perspective. The information technology world is changing faster and more meaningfully than it ever has, and Google now is far behind Microsoft in key areas and could rapidlty lose its advantage in another.

To wit:

Microsoft now has potential to embed Skype audio and video calling into Office 365, Outlook and Web mail products. While Google has for some time integrated audio and video into Gmail, it hasn’t picked up momentum in this space -- largely because Skype has maintained fierce user loyalty. Microsoft now has that 170 million Skype installed base in its column, and that’s one big bat it can use to beat up Google;

Once this deal closes, Microsoft will immediately have a presence on tens of millions of smart phones that now have Skype Mobile -- the powerful video-and-audio calling that works even at 3G speeds. That presence will even include Android phones -- which had previously been Google’s playground.

Skype Mobile now becomes a gateway on Android phones into Microsoft’s Office, SharePoint, Exchange and even SQL Server. That means Microsoft’s current installed base across all products need not abandon its IT investment regardless of which smart device platform it selects to reach the edge of network.

Microsoft, as part-owner of Facebook, is now positioned strongly to drill Skype deep into the world’s largest social networking platform. Facebook with voice and video baked in would be a more powerful Facebook, and it will bear watching to see if a Microsoft-Skype duo becomes a trio with Facebook;

And, for Microsoft Chairman and CEO Steve Ballmer, here’s the beauty part: Microsoft can now integrate its Bing search technology into Skype on both the desktop and smart platforms.

Next: Microsoft's 'Search' Beachhead

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