Bill Gates says he advocated Skype takeover | Hacker News Reader

Bill Gates says he advocated Skype takeover

bbc.co.uk

75 pointsssclafani48 comments

Skype has 13% of calls. It has lots of connections to the various different telephone networks all around the world. MS bought the largest telecommunications company. MS wants into telecommunications in a big way.

Skype has a product that corporate users want - voip/conference calls/video conferencing. MS has access to that market, which Skype did not really have.

Skype has a massive user base(663 million registered users as of 2010). These users also have contact lists - business, friends, and family. Think of these social connections in a user base larger than facebook. MS wants more into social.

Skype has a massive amount of peoples credit cards on file, and agreements with those people.

Skype has a huge botnet(110 million+ active nodes). Many of the computers running Skype process data, and use their internet pipe for Skype. Remember Skype is a P2P network.

The Skype brand is quite strong, and is something people like. MS needs to buy into brands like Skype, which people love - since many people hate the MS brand.

Then there is the raw talent they are buying. These are some seriously good hackers, and business people.

I think MS got Skype for a great price.

Great points. What's more is that they pre-empt and sort of sidestep Google out of a big part of this too. People who criticize the high price paid for Skype should also think about their decision to invest in Facebook at a $15bn valuation early on - another bold move by Gates.

pedantic note: not larger than facebook, as pointed out in a dozen other comments on the skype deal, facebook's reported 600M+ users are _active_ users

Except Skype is not a product that corporate IT wants - as you point out, it is a botnet and they do not want their bandwidth being sucked up for calls.

MS does have access to the market - but it's one increasingly dominated by Cisco and their solutions just work. I do not think Skype will succeed in the enterprise.

Bill Gates is a savvy guy, but come on, he is the chairman of the board of directors of a Fortune 50 company. What's he going to say -- he was tepid on the deal they just spent $8.5 billion on? Boards don't operate like this (that is to say, boards don't air their internal disagreements or criticize sitting management in public).

How about nothing at all? If he truly thought the deal sucked, there are a lot of politically correct ways to feign corporate enthusiasm without saying "I was a strong proponent at the board level for the deal being done."

He's pretty much personally endorsing the deal, which is not savvy if he's tepid on it.

It doesn't have to do with political correctness, but rather stock price. If it comes out that Bill Gates thought this was a bad move, Microsoft shares will fall. He'd be hitting himself on the head with a hammer.

They would fall in the short term and then rise when a new CEO would be found. I doubt Ballmer would be able to stay as CEO if Gates went against him. Gates is not worried about fluctuations in the stock price of Microsoft. He's a long term investor.

You seem to be saying that if Gates didn't support the decision, then he would try to get Ballmer out. I disagree -- this isn't a big enough issue for that. (Edit: I should clarify. It is a big issue, but Ballmer wasn't acting on his own. Replacing him would accomplish little.) So while Gates is a long term investor, it still makes no sense for him to speak his mind on this at the cost of stock price. It might not affect him much, but why discourage others from investing, even the slightest bit?

I think a big part of the value for MS will be skype as a voip development platform.

https://extras.skype.com/

for the corporate world, MS can probably do some big upselling into the PBX world.

I think their could be some interesting tie-ins to getting an integrated system working between the pbx of the company you are contacting, and web-based support. Theoretically skype could provide that for their already installed base.

Microsoft already has a VoIP stack for enterprise through their "Microsoft Unified Communications", and its already integrated into many of their products, esp office (though my knowledge/understanding of this product line is limited).

I think the value behind the Skype acquisition is as a consumer-facing VoIP solution; think of integration with windows phone, windows messenger, and xbox. Its great for consumers because its a brand that grandmothers are familiar and comfortable with.

"I think it's a great, great deal for Skype. I think it's a great deal for Microsoft," he added.

Great,great for Skype but just great for Microsoft.

"It'll be fascinating to see how the brilliant ideas out of Microsoft research, coming together with Skype, what they can make of that."

Really, I promise.. I'm not trying to be snarky... but can someone point out to me recent examples of "brilliant ideas out of Microsoft research" making a dent in the world I live in lately? I'm struggling.

[Edit - Quora-style-summary]:

1. Kinect, mostly

[Edit - soft apology / further expression of confusion]:

So, ample down-votes so far (expected), and lots of comments.. but still very limited in terms of interesting input about projects that have come out of MSR that have (as I put it) made a dent in the world. So far lots of people pointing at Kinect (and one person pointing out it was acquired), some noise about Surface, a mention of .NET. Honestly, none of which have made my life any better. That's not a bad thing though. I guess maybe I'm in the minority, and lots of you are living in a much better world because of Surface, or something.

At any rate, sorry if I've offended. I really wasn't attempting to call bullshit on MSR at all, I was genuinely curious (and yes, a little cynically suspicious).

Although I don't use it, I think that Bing has forced google to up its game. I doubt the recent Panda update would have been as soon, as widespread (it even had a follow on update), or as publicized if not for bing.

Guess that's not really research.

Kinect is the closest I can think of. Not sure if you live in that world.

Would you credit Microsoft or Prime Sense for the Kinect?

Microsoft acquired the Kinect technology.

Oh my god not the "Kinect was acquired Herpa-Derp" argument again. On the kinect sensor, there's pose estimation being performed @ 200 fps which is the product of work done @ MSR. Here is the paper that describes how the kinect does pose estimation faster than any comparable tech on the market : http://research.microsoft.com/apps/pubs/default.aspx?id=1453...

MS research has produced a lot of stuff that is directly used in games today. Hugh Hoppes research on vertex cache optimization and SHPRT has been a shipping part of the DirectX SDK for years for example. Recently MS Research published a paper that greatly reduced Kinect latency that is likely to make its way into games and other applications.

I'm not as aware of other research to product transitions, but I imagine a lot of MS research's work has moved to .NET (I think F# might have started as a MS Research project?) Microsoft Research is one of the strongest divisions right now, they produce a lot of cool stuff, practical or not.

Didn't the MS Surface come out of the MS Research division.

edit: From wikipedia:

    The product idea for Surface was initially conceptualized in 2001
    by Steven Bathiche of Microsoft Hardware and Andy Wilson of
    Microsoft Research.

Which, to the questioner's point, ships maybe in quantity m's whereas the iPad ships in quantity mm's

did you forget ahem, MS.NET?

I think he said "making a dent" as in "improving". .NET has no positive impact on my life.

I think they pay for a fair amount of Haskell work, no? Not that it'll impact the world directly, but a lot of that stuff "trickles down" eventually.

If that's the case, best example so far (next to Kinect, maybe).

MS Research has been working on the life tracking hardware / software combo for awhile now. Which is something I've personally been interested in and I think is going to be huge going forward, especially with facebook getting people accustomed to a privacy free world. I just don't know how to turn that future technology into profits for me yet.

I expect lots of people to opt into a device the records their conversations... locations... images of the people around them... And the collates into some useable data using voice recognition + facial recognition + voice-to-text

The resultant data could be searchable by person... And bring up every picture of the person.. every conversation.. a map of locations where that person was with you (picture or voice)... etc... Anyway, MS Research has been working on similar stuff and I for one think that is going to be awesome technology someday.

http://techcrunch.com/2009/09/06/life-recorders-may-be-this-...

http://research.microsoft.com/en-us/um/cambridge/projects/se...

interesting, but wont this clash with US wiretap laws? As far as I understand, many states require two party consent

As an Illinois resident, I wonder this myself.

My thoughts? Maybe you'd life-record in certain situations. For example, I do not believe representatives of businesses are required to be notified of recording while performing their official duties.

Microsoft Research has been involved in many projects and papers, being one of the best R&D centers around.

You're also kind of lazy for asking, as you could simply check their website, which contains a list of projects and papers published: http://research.microsoft.com/en-us/research/default.aspx

The problem with Microsoft is that they aren't able to turn all that research into usable products. But that doesn't mean the research isn't valuable, some of the best ideas in the world have been happening ahead of their time you know ;)

Microsoft produces a lot of paper in a very large set of fields related to computer science. They invest a lot in research and I know it doesn't seem like it for those outside of academia. Hell I bet Bell labs didn't seem too impressive except for the transistor to the outside world.

Someone mentioned Haskell, they also do a lot in artificial intelligence, operating system research, security (yeah yeah I know), human computer interaction etc.

Not to long ago Apple passed Microsoft in profits, but that difference is much smaller than the difference in R&D budget. If you take that into account, Microsoft is much more profitable.

MSR has the biggest R&D budget in the country after the U.S. federal government. I think they'd hit brilliance inevitably. Probability would demand it.

Here is the list some notable products from MSR: http://www.quora.com/Microsoft-Research/What-products-have-c...

A recent success is the Kinect, which was the fastest-selling consumer product on record.

Since I can't see comment scores (sigh), I don't know how well voted this is.. but it ought to be at the top of the comment list because it's the answer to my question, exactly.

Thanks for the compliments, but the credit should really go to Ankur Dave, who posted that answer on Quora :)

Microsoft Research is one of the closest things to the old Bell Labs that still exists today.

What are Skype's patent holdings? Could those be worth $8.5 billion?

MS has had its own video conferencing via MSN messenger for years. I don't see the value of spending 8.5 billion in order to get Skype's tech - I would think that money would be better spent on a very fat pipe on which to run the live video.

Swype's tech? Who wants that? Now Skype' name/brand/subscribers/creditcards on the other hand...

*Skype. Swype is the Android keyboard.

1. Skype offers the best product in its market (and is the market leader)

2. Skype has 110m+ active users, and 660m+ overall users.

$8.5b is too much, in my opinion, but Microsoft obviously believe that it's a fair price to pay for the reasons above (among others, of course). The value gained is tremendous. What Microsoft does with that value remains to be seen.

I think they spent 8.5 billion dollars for the skype brand. It also reduces competition. In the article it sounds like Microsoft Research has a good amount of tech of their own. I almost wonder if Microsoft Research has the next big thing, and they're planning on using skype to put it out there.

I wonder how the Skype purchase will affect Messenger.

Hopefully it means the death of Messenger. And hopefully they don't make Skype like Messenger. They really did their best to kill Messenger over the years with all the re-writes.

If you look at the language: "I was a strong proponent at the board level for the deal being done"

What was he at other levels?

The presence of "at the board level" is distancing language. If he was personally fully behind the deal, he would be likely not to include that phrase and to add that information in a different structure.

My take is he's uncomfortable with the deal and was likely not fully behind it.

My take is he's uncomfortable with the deal and was likely not fully behind it.

Agreed it's distancing language but my guess is that he doesn't want to undercut Ballmer's authority.

I see it not being distancing language so much as an attempt on his part to emphasize that he's a strong proponent at the highest possible level. Besides, who's a strong proponent for something at the board level but tries to fight against it at lower levels? No way Gates doesn't feel like he can say what he wants at the board level.

That's a very unnatural way to read the sentence.

Bill's role is at the board level these days. He's not actively involved in the day-to-day running of the company.

But a decision of this magnitude is, without a doubt, a board-level decision. And there, at the very highest level possible, Bill was a strong proponent, he says.

And somehow you read this as him not being fully behind it?

Yes, he's at the board level, so he has no need to qualify his statement and introduce ambiguity.

If you take everyone, particularly people with great power, at the surface level of their language, you are missing most of the meaning. Indirect and qualified statements are usually that way for a reason. Read up on this - I'm sure you'll be fascinated.

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