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The Fate of New Acquisitions: Whither or Wither?

By Jeremy Wagstaff

I’m writing this on a Windows PC using a great piece of Microsoft software called Windows Live Writer. And that’s only part of the problem.

As you no doubt know, Microsoft have announced they bought Skype, the Internet telephony company, for $8.5 billion. You’ll have to look under a lot of stones to find someone who thinks this is a good deal for Microsoft. Skype made $20 million last year on revenue of $860 million, posting a net loss of $69 million because of interest expenses. In short, this is not a company about to fill Microsoft’s coffers with dosh.

Whenever a big company goes on a buying spree I reach for my gun and head for the hills. These things never end well. A few weeks back we heard about Cisco buying and then killing Flip, those great little pocket cameras so simple to use people actually use them. I used to keep a list of these acquisitions, because I naively used to think that a big company buying a smaller one was a happy ending. I’ve nearly always been proved wrong.

Yahoo bought a browser bookmarking service called delicious that they parked in a siding until eventually selling it, a few weeks back, to someone who actually seems to understand the product. In fact a fun game is to quiz Yahoo PR people about the state of their company’s lesser known products and count how many “I’ll have to get back to you on that one” responses. I’ll give you a head start: Ask about Konfabulator, a sort of desktop widgets program which was excellent, but has quietly withered on the Yahoo vine. The developer’s blog hasn’t been updated since 2007.

Yahoo are probably the most egregious offenders but everyone does it. Google boughtJaiku, a twitter-like service that was better than twitter, but have done precisely nothing with it. Nokia bought dopplr, a social networking service for people who travel, and have done precisely nothing with it. (Product blog hasn’t been updated since September 30 2009, two days after Nokia bought it.)

So why do it? Buying companies makes people money, somewhere in the chain. It disguises ineptitude, or it is what is called a defensive play: I’ll buy it so you can’t.

The Skype deal neatly illustrates Microsoft’s problem is a simple one: It lacks direction. It doesn’t seem to know what it wants to do so it creates a new brand, a new product, a new division—often out of an old one. The product I’m writing this on is part of (frankly the only good part of) the Windows Live array of products—whatever that is; I’ve never quite figured that part out. (Type live.com into your browser and something different seems to happen each time; now it’s a sort of stream of consciousness page that’s more of a stew of Microsoft’s various offerings. ) Windows Live Writer was part of a product Microsoft bought called Onfolio; it has survived, somehow, though few people seem to know about it outside a very narrow group of enthusiasts.

And here’s the rub. Microsoft has no idea what to do with all these products it spews out or inherits, so it forgets about them. Most of you know that Hotmail and Bing are Microsoft products. But how about Lync? Or Kin? Anyone remember Zune? And what is the difference between Windows Live and Windows Live Essentials, for example? Or Windows Messenger, Office Communicator, Windows Live Messenger and MSN Messenger? Or Sync Center, Live Mesh, SkyDrive, FolderShare and Live Sync?

No, I’m not sure either.

Go to Windowsmarketplace.com and you’ll be told that “Windows Marketplace has transitioned from an ecommerce site to a reference site.” Confused yet? Go togetpivot.com, the website of what was billed a year or so back as “the most ambitious thing to come out of Live Labs” and you’ll get directed to, er, bing.com. Live Labs itself was disbanded a few months later. Now old links to Live Labs go to bing.com, which was where those members of the team ended up that didn’t quit. Out of the 14 projects initiated by the lab counted on Wikipedia, all but five are dead. Of those, only a couple seemed to still have any life in them.

When a company diverts a link from one of its own press releases barely a year old to, effectively, nowhere, it’s a pretty good sign that’s where the vision has gone too. This was after all Microsoft’s big research team—at least the most exciting one (Microsoft spends about $9 billion per year on R&D, according to Jean-Louis Gassée, a French analyst.) Microsoft products seem to get lost in a labyrinth of confusing branding, branching and segmentation tunnels, confusing and demoralizing the user to the degree they throw up their hands and go buy a Mac.

Not I. I know about Microsoft products because I use them. A lot. And the more I usemy Mac the more impressed I am with parts of Windows 7.  The problems with the operating system could be fixed in an afternoon: Watch a couple of users try it out and then ask them what was missing. Build those bits into a new version, ditch the trash and you’re good to go. (Some clues: something like iPhoto but better than Photo Gallery for handling photos. Something like iMovie but not Movie Maker. Apple’s products all come pre-installed. Microsoft’s are a confusing, lengthy and intrusive download and reboot away. Oh, and something half way between Microsoft Word ($200 or thereabouts) and the freebie WordPad; Apple’s equivalent Pages costs $20. It’s not as good as Word, but it’s a 10th the price.)

So where is Skype going to fit into all this? Well, the problems start with Skype itself. Since eBay bought it in 2005 it has been something of an orphan, passed around with little idea of what its future might be. It wasn’t always thus. I drank the Kool-Aid back in 2005, and thought like others it was going to change the way we communicated and did business online. I joined the vision of a world where everyone from clairvoyants to business consultants (ok, that’s not such a wide swathe) would offer services over Skype. Audio, text, video, you name it.

That hasn’t happened. For most people it is just a way to avoid paying rip-off phone charges and do the odd video call. Everything else is marginal. The most recent Extra—the add-ons that were supposed to be part of this new Skype ecosystem–is dated January 2010 and that’s just an update on an old program. One guy I interviewed in 2005 had set up a network of 30,000 experts in 50 countries on a website called Jyve.com that was going to piggyback this new Skype-connected world. He’s nowhere to be found now and Jyve.com is an empty page.

eBay didn’t get it, of course, but that’s only part of the story. About a year ago I wrote a piece calling on Skype to realize that it was at heart the world’s most effective social network tool. I wrote:

If Skype dovetailed with Facebook, twitter and LinkedIn it could position itself at the heart of social media. After all, it’s probably the only application that most Internet users have installed, loaded and [have] active on their computer. Unlike Facebook et al, Skype is there, right in the moment. It’s the ultimate presence app.

Indeed, it’s much more like an instant Rolodex (remember those?) than all the other networking services we use. If I want to contact someone the first place I check is Skype—if they’re online, what’s the point of contacting them any other way?

In other words, Skype offers a granularity that other social networking tools don’t: Not only is it comfortable with one to all (the status update message), it’s also comfortable with the one to several (add people to a chat or call), it’s also great at instantly connecting one on one. You can even reach people offline via it, if they have call forwarding enable, or you have their SMS details stored.

No other social network offers that.

Skype sits on every computer (and most smartphones.) By definition all the people the user is connected to are people he wants to actually communicate with—rather than just ‘friending’ or ‘ ‘connecting to’. It’s an easier way to share stuff—photos, files etc–and it’s now pretty easy to set up groups and stuff (In Afghanistan we used it as a way to share security updates; people could see the information in real time or catch up on messages when they got online. In Singapore I use it to talk to my students via teams and the whole class.)

Unfortunately Skype may have read my piece, or they may not. Either way, they half went down this road by trying to throw in lots of things that people didn’t need—including an annoying Firefox extension that turned every number on a webpage into a phone number, including bank accounts. Now Skype is so big and clunky it crashes on my Android phone and my Windows computer.

But in a perfect world Skype works. It’s simple. For many people it’s a telephone. For others it’s a presence indicator: I’m online, I’m not. My computer is connected to the internet (green button showing) or there’s a problem with the connection (grey downer button showing). For some people it’s become a very useful way to organize teleconferences (though don’t talk to my colleagues on an Indonesia project about this; they spend hours trying to get a connection going.)

Skype wasn’t first but it worked better than others, which is why everyone has a Skype account, and why asking for someone’s Skype ID is almost as natural as telling asking for their email address.

But unfortunately I’m not sanguine about a Microsoft/Skype future. Either they integrate the technology behind it into their other smorgasbord of products, in which case you wonder why they didn’t develop the technology themselves, or they leave it as it is. Either way it’s not good: While analysts have focused on how Skype might fit into Microsoft’s non-PC products like Kinect and Xbox, it’s hard to imagine that Microsoft won’t try to shoehorn Skype users into one of its misbegotten sub-brands, losing non-Windows users along the way.

Skype Messenger anyone? Live Skype? Skype Office? Skype Explorer? I shudder to think what will happen. I may be wrong—I’ve been plenty wrong about Skype before—but my fear is of a Skype that gets as clunky and overloaded as MSN Messenger, as bewildering as the Live family of products, as impossible to separate from other Microsoft products as Microsoft Word, as doomed as Outlook Express and anything from the Live Labs mob.

I do hope I’m wrong because of all the networks I have on my computer and cellphone, Skype is still the one I actually need. Skype: whither or wither?

The Third Screen Talks to the Second

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Nokia has finally woken up to the potential of connecting its phones to a computer. I’ve written elsewhere about the PC Suite, but its latest version has made some great strides in allowing you to use the computer to manage and monitor your cellphone.

The vision is a simple, and yet elusive, one. We work on our computers when we’re stationary. And on our phone when we’re mobile. But as far as we’re concerned we’re still doing the same thing: working. We can synchronize our data between those two devices, but operating both in real time is more problematic: there are tools to allow us to access our computer data from a phone, but sending and receiving SMS messages, for example, is still considered a phone activity, not a computer one.

It’s a technical barrier, not a lifestyle one.

Nokia, the biggest cellphone manufacturer in the world, has been slow to wake up to this weak link, but they’ve now seemed to see it. We should be able to send and receive SMS messages just like we can send and receive email messsages. It shouldn’t make any difference to us how people communicate with us; the medium shouldn’t matter.

But anyone thumbing out SMS messages in the office when they’d rather be typing them knows it does.

The PC Suite, once just a way to synchronize data between phone and computer, has now started to move into this space. Now it’s not a suite, so much as a Communication Centre. It’s become the interface for your phone (or phones; Bluetooth lets you connect more than one device simultaneously) when you’re at your desk.

The real improvement, therefore, is in the way the desktop software (Windows only) works with messages and contacts on the phone. Previously it was clunky and slow; it felt like the computer was downloading all your messages and contacts each time you wanted to do something. It was often faster just to tap the message out on the phone.

Now it’s fast and easy to use. Your computer will also let you know when a new message arrived, something the old software didn’t. The software is also good-looking and remarkably rich in features. Indeed, I’d argue that you don’t really need Outlook for your contacts with this kind of software working so well. (And yes, it handles non-Western alphabets well too.)

Some weaknesses: there’s still no way to add a phone number to existing contacts—as opposed to creating a new one. And when I first ran the software it ate up nearly all my processing power, which wasn’t pretty (it’s since settled down.)

Intriguingly, there’s a Firefox extension for synchronising bookmarks between your computer and phone browsers.

This is the closest I’ve seen to making the phone an appendage to your computer, where it seamlessly integrates in terms of data and functionality. Some steps to go, but kudos to Nokia for pushing the envelope. Hopefully soon enough we won’t notice or care what medium—SMS, email, chat–we’re using, because it will all be one simple interface. That day just came closer.

Wire Mesh and Lost Souls

You have to love the Internet. It brings you into contact with all sorts of unusual people, the likes of which I haven’t encountered since my days of being driven by tuk-tuk around the sois of 1980s Bangkok. Here’s Linda, for example, who just asked to be my buddy on Skype, introducing herself thus:

Me! A Chinese girl! My main work is to sale wire,wire mesh and wire rods!If you need my service, please contact me unhestantly!

I just don’t know when I’m going to need wire, wire mesh or wire rods so I’ve added her to my contact list. Now I can see the commercial benefits of Skype.

And then there’s my blog. Frankly, it drives me nuts, but two years ago I wrote about how awful some Nokia service centers were, and now it’s become the Mecca for any Indian resident looking for a service center. Why me? And why India? Heaven knows, and I’ve tried to explain I’m not a Nokia Service Center, but still they come. This, for example, just now, from Sreedhar Durbhakula:

I purchased NOKIA 3120 handset before one year. Now it has created me some problem like some times I am finding the device Switchd Off. I need to switch on the set to work with it. Some times it is showing blank screen and again loading the signal lines and feature.Some times when I press some key for my operations it won’t respond and will get switched off showing me the blank screen. Please let me know what caused the problem? How much would be the cost for getting repaired.. I am in India Bangalore..If possible let me know the good customer Care Center in Bangalore..?

This is one of more than 100 comments left on that page, nearly all complaints or moving accounts from India of failed bids to get Nokia’s care and attention. Frankly I am developing a warped view of the subcontinent, as this place criss-crossed by lost souls bearing malfunctioning handsets, desperately looking for salvation in the form of a glowing Nokia logo.

Anyway, maybe I should introduce them all to Linda. A wire rod or two may be just the answer.

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