Microsoft reported its first-ever quarterly loss this week, thanks to the huge writedown of its 2007 aQuantive deal. But one acquisition, Skype, is turning out to be the little engine that could for the Redmond giant, at least based on the information Microsoft is providing.
According to Microsoft’s Q4 earnings report, revenue for the Entertainment and Devices Division grew by 20 percent in the fourth quarter, or $292 million, and 8 percent for the year, “primarily reflecting the addition of Skype,” the company said. Microsoft told analysts that Skype users made 115 billion minutes of calls (voice and video) during the quarter, a 50 percent increase over the same period last year.
Skype has been expanding its footprint through partnerships such as powering video calls on Facebook.
And Skype may soon get another boost in users. As noted by TechCrunch, the company is incorporating Skype into the next version of Microsoft Office, using it to power the “presence” feature in Outlook and giving Office 365 home users 60 minutes of premium Skype credit per month.
From a financial perspective, Microsoft said revenue in its Entertainment & Devices Divison increased $292 million or 20% to $1.78 billion in the quarter ended June 30, “primarily reflecting the addition of Skype.” On the downside, the division slipped to a $263 million loss for the quarter, thanks in part to Skype-related costs and a larger payroll.
While we know how much Skype is being used, what we don’t know is exactly how many people are using it. Skype reported those numbers publicly back when it was planning to go public — citing 145 million connected users as of the end of 2010 — but Microsoft hasn’t been disclosing user stats since buying the company.
Microsoft announced that it was acquiring Skype in May 2011, and the deal was finalized in October for $8.5 billion.
What do you think? Will Skype continue to soar inside Microsoft?