Microsoft is buying Skype. One of the world's biggest software companies now owns the leading name in online telephony and video conferencing. It's the biggest acquisition in Microsoft's long and storied history.
So, um... what now?
The diversity of Microsoft's software lineup - everything from spreadsheets to games - means there are plenty of products Skype can transform.
Adding Skype's video conferencing capabilities to Office 365, the cloud computing version of the Office suite, would allow Microsoft to compete simultaneously with Google Docs and Cisco's teleconferencing solutions. Windows Phone can potentially bake Skype deep into the OS, not just as an app. And marrying Xbox Kinect with Skype is a dream for both: Microsoft can expand Kinect's video conferencing capabilities beyond Xbox Live users, and Skype gets an awesome motion-sensing camera to serve as its flagship hardware for the living room.
But Microsoft doesn't have the best track record when it comes to big buys, even when they seem to be a good fit.
There's Danger, the guys behind the (at the time) hot Hiptop and Sidekick phones. The eventual result of that purchase? The Kin One and Kin Two phones, which lasted all of two months before being canned. There's also in-game advertising firm Massive, which doesn't exist anymore; and WebTV, which... well, I don't need to say anything more about WebTV, do I?
But it goes beyond corporate acquisitions. Microsoft is a far more innovative company than its public reputation suggests. You just don't know it because many of their greatest products never get the spotlight they deserve, because they're caught in the company's massive bureaucracy.
Remember Surface? It introduced multi-touch computing years before the iPad... but where Apple targeted consumers, Microsoft sold Surface to businesses. Has anyone actually seen one? (I haven't.) There's also Courier, Microsoft's dual-screened tablet that never saw the light of day. There's PhotoSynth, the quite unbelievable photo-stitching software that has quietly existed for years without getting the attention it deserves.
Still, there are positive signs for Skype. The first product listed as having Skype support in Microsoft's press release is the Xbox, which is arguably one of Microsoft's most successful products of the last decade. The Xbox business has both made effective acquisitions (Bungie) and has been very proactive in pushing innovative products to market (Kinect). The Xbox division is seen as being extremely well-run, and Skype can only benefit from a close working relationship.
The other is that Skype is simply to big to disappear like Danger or Massive did. Microsoft says it will continue to support Skype on non-Microsoft platforms, so there's no reason for people to stop using it. For me, the worst case scenario is that Skype will not be fully integrated with Microsoft's various businesses, and will exist as it does now. Which would be a shame, because there is a real opportunity for Skype to make an impact on multiple levels of Microsoft.
Of course, that's what eBay probably thought, too.