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Skype Deal Is Unlikely to Pay Off for Microsoft

NYT - Microsoft has only recently embraced the Internet cloud. But from the perspective of its shareholders, that’s certainly where its $8.5 billion deal to buy Skype belongs.

In theory, it has potential advantages. In practice, Microsoft’s poor track record on mergers and acquisitions and the high price it is paying for Skype mean the transaction is unlikely to pay off.

The idea is that Microsoft can integrate Skype’s voice, video and messaging tools with Office e-mail and its mobile operating system. A recent deal with Nokia could support efforts to promote Microsoft’s smartphone platform, which is an also-ran. Adding Skype, one of the few Internet names other than Google to become a verb, could help, for instance to compete with Apple’s FaceTime video calling. And gaining a Microsoft-like acceptance behind corporate firewalls might extend Skype’s reach.