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| Skpe CEO and Microsoft CEO |
The Internet communications provider is still waiting for European regulators to approve its pending acquisition by Microsoft. (The U.S. Department of Justice okayed the deal in June.) Skype says it expects to receive European approval before the end of the year. In the meantime, while the two companies aren’t yet formally collaborating on products, they are thinking about them.
As suspected, joint products will include a mobile version of Skype for Microsoft Windows Phones. Skype already offers a number of mobile applications, including versions for the iPhone, iPad and for Google Android phones, but it appears to be planning something unique for its Windows Phone app. Neil Stevens, Skype’s vice president and general manager of products and marketing, says the company wants to create an app that doesn’t feel like app but, rather, part of the phone.
Skype will be able to do this on the Windows Phone operating system because, as a (future) Microsoft division, it will be allowed greater access to deeper levels of the OS, said Stevens in an interview. “A Windows Phone app, if done well, can show people what a really great Skype experience is like when there are no hardware or vendor limitations,” says Stevens.
Skype runs into those very limitations when developing for Apple’s iOS operating system or Android, according to Stevens. Apple, for example, doesn’t let Skype touch the iPhone’s video processor or address book. Google allows the latter, but not the former. “We’re disadvantaged against [Apple’s video-chat service] FaceTime because of this closed environment,” says Stevens.
Stevens doesn’t want Skype to be an app at all. He’d rather it be integrated into the device or browser itself much like Skype is on Facebook following the companies’ July collaboration. “People don’t want to start an app when they’re making a call,” notes Stevens. “This is the way the world’s moving; it’s hard to do on phones but we have to move there.”
Cellphones aren’t the only place Skype will hook up with Microsoft. Stevens says Skype experiences will be incorporated into Microsoft’s key franchises, including Xbox, its Lync office communications software and, eventually, upcoming Windows 8 devices.
Leveraging Microsoft’s experience with online advertising, Skype will also start inserting more ads into its products. Stevens says Skype is testing different ad models now, such as click-to-call ads and a promotion with Netflix that gave Skype users free credits for subscribing to the video rental service.
These new products won’t go public until the Microsoft acquisition is approved, however. “We’re not allowed to do anything in the meantime,” says Stevens. “We can get a plan for a plan, but that’s it.”
Skype’s future plans also include a growing partnership with Facebook. The companies are still working on rolling out the online video-chat service they announced in July. It is currently limited to about 1% of Facebook’s global users but Stevens says most of the kinks have been fixed and the service will ramp up over the next few weeks.
Once Facebook webchat is deployed, Skype will add the ability to make outbound calls to landlines and cellphones from within Facebook and to call from Skype into Facebook. Some of these calls will require payment via Skype Credit, which will enable Skype to make money from the (currently free) service. A Skype/Facebook mobile calling app and group video-chatting on Facebook will also arrive, eventually. Stevens says the roadmap shows that Skype’s Facebook alliance is not a “one-time, one-product” relationship. “We have a plan to build out a number of products with Facebook,” he says. “We’ll be Facebook’s key partner for communications.”
Microsoft, which owns a 1.6% stake in Facebook, naturally likes the synergy with Skype. “[Skype CEO] Tony [Bates] and [Microsoft CEO] Steve [Ballmer] went to see [Facebook CEO] Mark [Zuckerberg] on day one of the Microsoft/Skype announcement,” points out Stevens.
Skype, which was previously acquired by eBay, has endured unhappy relationships with large corporate owners before. Stevens contends the Microsoft acquisition will be different. Skype, for example, will operate as an independent division instead of being subsumed into an existing Microsoft business group. Skype’s engineering teams will also stay in their current locations instead of moving to Microsoft’s Washington headquarters. (Stevens, who lives in London, will continue to be based there.) “Microsoft understands the loyalty people have for Skype,” says Stevens. “The last thing Steve [Ballmer] wants is for Microsoft to get in the way of Skype shipping products quickly.”
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