The Eight Billion Dollar Verb

The deal's done, the strategy revealed, the entrails available for augury. None of this stops everyone asking the question — why would Microsoft pay $8.5 billion for Skype?

It's not the technology, which Microsoft already has — with the exception of Skype's peculiar call routing system, which only makes sense if you have no infrastructure of your own and don't mind annoying enterprise IT managers. Microsoft, which has plenty of infrastructure and tries to keep enterprises happy, doesn't need that.

It's not the user base. Those 660-odd million users are overwhelmingly already Microsoft customers.

It's not the telephone revenues. Would you invest $8.5 billion on a business model based on voice minutes? In 2011?

What it is, is the word. Skype. Assuming the deal goes through, Microsoft has spent the cost of an aircraft carrier on a verb.

Skype is one of the few brand names of late to have become an actual word. People talk freely of skyping each other, much as they do googling for something, in a way that even Apple has never achieved. That Microsoft has no brand recognition in online services is a given — what does Live mean in that context? Lync? Windows? Azure? 365? — and that it wants one like life itself is also embarrassingly obvious. Every time someone in a tier-2 TV thriller or meh-grade movie says "I'll just bing that", in a way that nobody on the planet actually does, Microsoft's desperation shows through.

So try these on for size: Skype search. Skype apps. Skypebook. Skype Mobile. You already know what they mean. It doesn't matter much what the tech underneath them is; it's a strong online brand that one in ten of the planet's inhabitants already know and use.

Is that worth all that money? Is it worth Ballmer's career? Will adding yet another loss-making online service to a large collection of loss-making online services produce a miracle through the magic of brand marketing?

I wouldn't put money on it. But then, it's not my $8.5 billion.

[Edited to reflect the deal's confirmation an hour after this entry was posted]