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Steve Ballmer, chairman and chief executive officer of Microsoft Corp.

MIKE SEGAR/MIKE SEGAR/REUTERS

First disclosure: I've recently become a Microsoft Corp. shareholder. Second disclosure: I bought the stock knowing full well that it is a bloated company that couldn't innovate a sturdier paper bag to hold its considerable cash.

With that out of the way, I'll turn the discussion about Microsoft's decision to buy Skype for $8.5-billion (U.S.) over to other observers. From what I've seen so far, the tone is skeptical - in particular, that the purchase underlines Microsoft's failure to create anything worthwhile on its own, and that it will merely drag down Skype's cachet.

Anthony DeRosa of Reuters: "The reasoning [for the deal]provided in a rather unimpressive press conference by the awkward and uninspiring Steve Ballmer, was to bring new customers to Windows and Office. I can tell you with some degree of experience, business users want screen sharing but they don't have a great need for videoconferencing. It isn't a tremendous business advantage or productivity tool.

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"If, instead, Microsoft predictably turns Skype into Windows Messenger Live Video Vista Professional Edition, then we will have watched one of the most exciting products developed in the last century killed off in the interest of it's shareholders."

Joshua Brown at The Reformed Broker gives what looks like a backhanded compliment: "At first blush, I kinda like it. Microsoft's been blowing money on the web with nothing to show for it after a decade. This deal gives them an answer to GChat, Google Voice, Apple's Facetime, etc. It's big money, but what the hell else is Microsoft going to do with all that cash and equity - buy Yahoo? LOL"

But then there's I Heart Wall Street, which entitled its entry "RIP Skype:" "This is surely going to be the big topic/headline du jour. And surely if anyone can fsck it up, Microsoft can. We'll see. It's an interesting play on the back of it's Nokia/Blackberry partnership moves."

And Om Malik at GigaOm: "It won't surprise me if Microsoft comes in for major heat on this decision to buy Skype - and the software company could always botch this purchase, as it often does when it buys a company. The Skype team is also full of hired guns who are likely to move on to the next opportunity rather than dealing with the famed Microsoft bureaucracy."

With thoughts like these, it is little wonder that Microsoft shares were down 0.9 per cent in afternoon trading on Tuesday.

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About the Author
Investing Reporter

David Berman has been writing about business and investing since 1995. He has written for a number of magazines, including Canadian Business and MoneySense. He worked at the Financial Post as an investing writer and daily columnist before moving to the Globe and Mail in 2008. More

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