How Google Sabotaged Itself So It Wouldn’t Buy Skype

How Google Sabotaged Itself So It Wouldn’t Buy Skype

Microsoft bought Skype for $US8.5 billion, presumably beating out both Google and Facebook. But it turns out, Google didn’t want Skype. Not at all, in fact. They even went so far as to sabotage themselves from a potential deal.

Back in 2009, Google execs, CEO Eric Schmidt included, were interested in landing Skype from eBay to presumably supplement the not-yet-released Google Voice. GV product manager Wesley Chan was investigating whether Skype would be a good fit for Google and decided it wasn’t. Skype’s strength peer-to-peer technology, which Chan termed old technology, and wouldn’t fit well with Google’s desire to own the cloud. That’s when Chan “laid the grenades” to derail the deal.

According to Chan, he and another ally went to Sergey Brin to convince the Google co-founder that buying Skype would be a big mistake. They brainstormed an idea to kill the deal in a meeting with all the top Google execs, Chan would praise Skype and then Brin would shut him down. Wired says:

Brin seized the floor “and started getting really negative.” “He asked a series of questions that he knew would get unsatisfactory answers. Is this purchase data-driven? Who is going to spend all those months commuting to Europe? (No one stepped up.) How long is the government review expected to take? As Chan had figured, the advocates of the deal were unprepared to respond to these last-minute objections.

“[Sergey]looks at me and says, ‘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?’ And at that point, Sergey gets up and says, ‘This is the dumbest shit I’ve ever seen.’ And Eric gets up and walks out of the room, and I’m like, okay, the deal’s off.”

And poof. No Skype for the Google. Google instead continued its build out of Google Voice and Microsoft just spent $US8.5 billion today. [Wired]