How Collaboration Can Make the Skype Deal Work for Microsoft

Posted on by Fabrice Talbot

Remember when AOL and Time Warner merged to create the world’s greatest media empire? Or when eBay admitted that it had overpaid in its $2.6 billion acquisition of Skype in 2005 - eBay took a writedown of $1.4 billion.

This brings us to the record-breaking deal between Microsoft and Skype. If we put the financials aside for a moment and look at how this could work on the ground, a few issues arise.

  • Different Cultures – blending different business cultures is always a challenges and getting the Skype team to believe in the Microsoft way of doing business may take some doing.
  • Integrating Technologies – the peer-to-peer technology of Skype needs to be assessed and merged into the development path for other Microsoft applications.
  • Internal Politics – Ownership is always an issue during mergers as power bases will inevitably change or be challenged.
  • Communications – Making sure that both sides sing from the same hymn sheet is the first challenge for the PR departments; then other divisions need to find practical ways to manage meetings and reporting structures. For example, do they start skyping each other or use existing Microsoft communications tools?
  • Information Silos – Getting access to codes bases is relatively easy but finding ways to extract information from skilled developers and Subject Matter Experts may not go so smoothly.

Remember, not everyone may see the benefit of this alliance. So, how do you tackle this? After all, you’ve paid several billion dollars.

Making Collaboration Work

With these issues in mind, let’s look at how Microsoft and Skype could use collaboration to make this work:

  • Information Democracy – Find ways to release information from silos and share data across business units. Create an open culture where both teams, e.g. the Skype and Microsoft security teams, share information that benefits both sides. Remember, they all work for Microsoft now, though the ‘I’m from Skype’ will take some time to fade away. Use collaborative technologies that encourage the sharing – not hoarding – of information and stimulate others to share their knowledge across functions and business units.
  • Increase Trust – It’s hard to generate goodwill from those you’ve never met. One of the challenges for brand managers is to integrate Skype into Microsoft's other offerings, for example, the Microsoft Office suite and Internet Explorer. The difficult here is that the Windows and Office business units (to a large degree) determine their own agenda and getting them onside will take some arm-wrestling. But you have to start somewhere. To justify the investment, Microsoft needs to bring these divisions on board. How do you get this started? Start on small projects. Collaborate together. Identify what works, smooth out the issues, and work towards larger projects.
  • Create Bridges Not Barriers – Talking about trust, synergy, and win-wins is fine but you need to demonstrate it to workers. One way to do this is to remove barriers and create a culture of sharing, openness, and one that sparks collaboration. How to start? Give everybody access to everybody else within the organization (the exception is sensitive data, such as HR and Financial data). If a business unit needs real-time information, for example, for a specific sales territory, they should be able to connect with the salesperson, without suffering any negative consequences.
  • Encourage Web Collaboration – With the rise of Social Media, companies are beginning to see real tangible benefits when engaging online. One suggested approach for this merger is to tap into the ‘wisdom of the crowds’ and get a feel for where Skype should go next.
  • Practice What You Preach – Remember, Microsoft already has a VoIP product, Microsoft Messenger which has 260m accounts. How do you integrate Microsoft Messenger, Skype (660 million) and other Microsoft products, such as Xbox? While this seems like the project from hell – imagine trying to integrate all these IDs into a single database without duplications or deletions – it gives Microsoft an opportunity to use collaborative technologies on a massive scale and then capitalize on the knowledge gained from this process.
  • Reward input – Collaboration is an iterative process. It can be difficult to gauge what works until the results trickle through. For sure, if employees feel intimidated or are reluctant to share their insights the company will stagnate. It’s probably not a coincidence that the most creative firm in the last ten years – Google – encourages employees to work on ‘pet’ projects. While not all of these come to fruition, it creates a culture of creativity. One where employees are challenged to contribute and collaborative with others.


Remember Microsoft had the idea of tablets long before Apple's iPad, but internal politics didn’t support the initiative. The Skype deal allows it to re-position itself with consumers and bask in the halo effect of this ‘cool’ brand. This requires both sides to pull in the same direction, build bridges where islands exist, and reward managers who use collaboration to make this happen.

Do you think they can make this happen?

About the Author: Fabrice Talbot is the founder of Agilewords, an online document review and approval application. You can read his blog at