The biggest news of the week and perhaps the biggest merger news of the year happened yesterday when Microsoft announced that it was purchasing Skype for $8.5 billion. Microsoft quickly started to name off many of its plans for the service and was tickled to death to have grabbed Skype when Google and Facebook were eying the purchase. Wired has a very interesting story from insiders at Google that have come forward to note that Microsoft didn’t take Skype for Google, rather Google didn’t want Skype after all.
The story comes by way of an interview with Google’s Wesley Chan, who was once in charge of Google Voice when it was under development and is now part of the Google Ventures Team. Chan notes that after working on the due diligence with the possible Skype purchase he became convinced that Skype was not a good buy for the search giant. The major reason Chan says Skype wasn’t a fit was that the tech used in Skype is peer-to-peer, which he calls old technology compared to the cloud services Google is so big on today.
Peer-to-peer eats up bandwidth according to Chan. Many of the top execs at Google were behind the deal to buy Skype so Chan hatched a plan to derail the purchase with Salar Kamangar. Apparently, the plan to derail the deal didn’t have to move forward, Chan says that Sergey Brin seized the floor during a meeting about the purchase and asked questions that no one could answer. Ultimately, Brin said, “Why would I want this risk? We have a team capable of building the carrier, we have the users, we have hundreds of millions of Gmail users, why do we need to have Skype?” Chan says that Brin then got up and said, “This is the dumbest shit I’ve ever seen.” With that, the deal was off.