How Microsoft And Skype Embarrassed Google

That means Bing, through Skype, could be in front of hundreds of millions of eyeballs that would otherwise default to Google (NSDQ:GOOG) for search and search advertising. And, as we all know, search advertising is the secret sauce that keeps Google hot.

Until today, Microsoft (NSDQ:MSFT) could never really obtain beachhead in search. The operative phrase, here, is “until today.”

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Ballmer and Skype CEO Tony Bates emphasized, repeatedly, during a press conference Tuesday morning that they intend to leverage the Microsoft-Skype marriage to score big with advertising – including video- and rich-media-based ads.

Ballmer and Bates also made it clear that the real bullseye for them in this deal is the commercial IT space -- where the marriage of VoIP and video have at times been pricey and integration with multiple platforms has at times been complex.

A Microsoft-Skype bundle for communications -- if executed correctly with Microsoft’s solution provider channel, which must sell and deliver the deal to the IT marketplace -- will be a game-changer. It would enable text, voice, video, collaboration and communication from the smart phone to the back office to the cloud.

In other words, for $8.5 billion, Microsoft gets its money’s worth. And Google and Page get a choice. They can respond with aggressive R&D, marketing and vision, or they can call the anti-trust lawyers and hope the courts can save them from a Microsoft-Skype union. Microsoft executives say they expect the regulatory process to finish up by year’s end. (It’s safe to say they are somewhat familiar with the process. MCTS Online Training - MCITP Online Training)

Microsoft and Skype, together, are each stronger and leave Google much weaker. From a solutions perspective, MicroSkype comes at the perfect time with the perfect weapons in its arsenal.