Sunday, May 15, 2011

BIG’s Blog: Why Would Microsoft Pay $8.5 Billion for Skype?

Talk about two shocking news headlines that were both amazing in their dollar value, and yet polar opposite in their implications for nonprofit fund raisers:

The first headline, Skype Deal Reflects Microsoft’s Mobile Ambitions

The second headline, US Postal Service runs $2.2B Q2 net loss

Wow, here is one commercial company (Microsoft) shelling out $8.5 billion dollars for an Internet-based calling and video chat service that isn’t making money, yet, while the US Postal Service has another multi-billion dollar loss in their 2nd fiscal quarter. The USPS lost $8.5 billion dollars in fiscal year 2010.

How many of you use the USPS? How many of you use Skype? While I know you all use the USPS, especially in your fund raising, from my experience, I also know that a lot of you are using Skype or know someone that does.

Sometimes we just need to step back and look at the big picture.

For Microsoft, they can integrate Skype’s popular (170 million connected users and growing at 600,000 a month) Internet calling and video chat service into their Phone 7 smartphone line-up, plus leveraging it across its other platforms including Xbox 360, Kinect, Windows, Outlook and its Lync instant messaging service.

For the USPS, they can’t seem to figure out how to keep losing customers and mail volume. Their revenue dropped 3.9% to $14 billion in Q2 compared with the same period of 2010, and this after cutting work hours by 3.2%.

Here is the question for nonprofit fund raisers, especially those of you that are overly dependent on direct mail for your fund raising revenue:

Which is the communications platform of the future, the Internet or the USPS?

Hint: The USPS again warned that it will face a cash shortfall by the September 31 end of its 2011 fiscal year, and default on payments to the federal government without major legislative changes.

Honestly, do you have a Plan B if there are adverse changes that come down from the Post Office?

If you don’t have a plan, but think it is finally time to look at options, call us and if we can’t help you we will recommend someone who can.


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