Microsoft is one step closer to adding Skype to its lineup. On Friday, the European Commission approved the software giant's $8.5 billion acquisition of the voice-over-Internet communications company.
The U.S Federal Trade Commission approved the purchase in July, and the company awaits decisions from regulators in the Ukraine, Russia, Serbia and Taiwan.
'Not Significantly Impede' Competition
The European decision was handed down by the commission official in charge of competition, Joaquin Almunia.
A Skype competitor in Italy, Messagenet, had asked the commission to block the sale unless the Skype user network was opened to other companies, but the request was not granted.
In a statement, Almunia said the "deal would not significantly impede effective competition in the European Economic Area." The commission's investigation found the two companies already overlap in video communications, considering that Microsoft offers such capabilities through its Live Messenger and other products. It also found that this media communications market is growing and has "numerous players," including Google.
For enterprise communications, the agency also found that Skype's presence is limited and does not compete with Microsoft's Lync enterprise communication product.
One question addressed was whether Microsoft might downgrade Skype's interoperability with other software, or if Microsoft would integrate Skype with its widespread Windows operating system, creating market advantages others could not match.
On the first matter, the commission found that Microsoft would have no incentive to diminish Skype's interoperability, since it's to the advantage of the Skype brand that it be available via as many partners and platforms as possible.
124 Million Registered Users
Concerning whether Microsoft could integrate Skype with Windows, as it had been accused of doing with its Internet Explorer browser, the commission reasoned that most users can readily download a version of Skype if they want, and that most users who buy a PC with Skype pre-installed are already registered Skype users.
In one obvious area of growth for Skype, enterprise markets, the commission determined Microsoft does not have an advantage, and already faces strong competitors such as Cisco.
Assuming it has the all the necessary governmental approvals, Microsoft has said it intends to create a separate Skype business division, with the current CEO, Tony Bates, as the head. The plan is to integrate Skype and its huge user base into the Lync VOIP Platform, Messenger, Hotmail, and Xbox Live. The Redmond, Washington-based company has also said it will continue to offer Skype clients on non-Microsoft platforms.
Skype was founded in 2003 by Niklas Zennstrom and Janus Friis, and it has about 124 million registered users. It is the largest Internet communications company, but has had difficulty becoming profitable. eBay bought the company in 2005 for an estimated $2.6 billion, but then sold it to an investor group last fall for an estimated $2 billion.
Posted: 2011-10-09 @ 9:02am PT
In the meantime, completely off the world media radar, Skype has been hit by a forced shutdown of 100% of their Italian SkypeIn online numbers.
The Ministry of Economic development has ordered Eutelia S.p.A., who provide Skype with the Italian phone numbers to distribute amongst their customers, to shut off the numbers entirely over a week ago. The apparent reason is that Skype has not complied with repeated request to adhere to a norm that requires users to provide positive identification to get a phone number through any provider, VOIP or traditional.
As of now Skype has not responded to the requests for resolution or an explanation of the developments by outraged and stupefied clients who rely on the service for business and personal communications.
Furthermore, the portability of the Skype/Eutelia number is also in question, leaving customers stranded and fuming.