Microsofts Acquisition of

Skype

1521005 Supraja Nanduri

1521006 Vinay Mohan
1521007 Subham Lohani
1521013 Raghawendra Pandey
1521016 Abhilash Kulkarni
1521028 Aditya Tekumalla

PART A:
Q. What is the valuation of Skype using CLV?
A. The valuation of Skype using CLV is 4860.8 million $.

PART B:
Q. Give three strategic reasons why Microsoft would benefit by acquiring Skype.
A. Three strategic reasons why Microsoft would benefit by acquiring Skype:
1. Enterprise collaboration
Enterprise collaboration across various product portfolios of Microsoft like Microsoft
exchange 365, Lync, and outlook will help Microsoft to integrate and connect all the
products with a single common interface.This will also give VoIP support to its
Windows phone around the world, hence competing with Apples Facetime and
Google.

2. Keep it away from competitors

Google is one of the competitors of Microsoft. Google acquiring skype would mean
Skypes integration with Android, google maps, apps, gmail, gtalk and google voice.If
this happens, Microsoft will suffer a damage which will take long time to recover,
because it takes more time and efforts to develop a product than acquire a brand.

3. Leverage network effects

Integrating microsoft with Skype would mean access to Skypes 700 million customer
base and overall incremantal value addition to its current customer base.