Posted on | July 5, 2011 | Comments Off
A Skype + Facebook partnership that will create more enhanced Skype capabilities inside of Facebook for its 750 million users is expected to be announced tomorrow. Skype of course pending completion of the acquisition is owned by Microsoft (MSFT). Moreover, Microsoft owns a small chunk of Facebook so this is a natural partnership.
More capabilities inside of Facebook is important for the company to continue to grow and to increase the time that users already spend in the walled off garden on the web that is Facebook. Even more importantly, Facebook’s continued increase in power and influence on the web is good for Microsoft when it comes to its search engine Bing which is now using more Facebook data in its search algorithm.
I’m in the minority in that I like Microsoft’s acquisition of Skype, and the new features with Facebook could have been heavily influenced by Microsoft. Facebook CEO Mark Zuckerberg actually announced that Facebook’s Seattle development office is the one spearheading this. Pretty interesting proximity perhaps to the software giant, Microsoft.
Moreover, the Windows 8 functionality for mobile phones continues to get great reviews. Microsoft could have a real winner in the mobile phone space in the near future which will be very welcome news for Nokia (NOK).
Lastly, the Office 365 product is seen as a great step for Microsoft to continue to grow its Office franchise.
Things might be turning around for the software giant. Shares are already about 7% off their lows from a couple weeks ago when they were trading at $24 a share. I entered my Microsoft position at the $24 level, but actually bought about 50% of my original position today again at the $26 level. This is a great low risk stock and the mid-$20s might be never seen again. We will see.