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Skype (Microsoft) Blows $85 Million on GroupMe
[August 22, 2011]

Skype (Microsoft) Blows $85 Million on GroupMe

Originally posted on VoIP & Gadgets Blog, here:

Skype was in talks with GroupMe to acquire them before Microsoft's (pending approval) bought Skype. With Microsoft purchasing Skype you would have thought Microsoft would have squashed any pending purchases by Skype or at least approve them. The fact that Microsoft didn't stop Skype means Microsoft must agree with the GroupMe acquisition. I'm honestly not sure why though.

GroupMe is simply a group SMS platform that enables you to create group messages leveraging SMS. That's it. That's the feature. There are plenty of ways of doing group messages. One example is 3jam, though they have a pending acquisition and their website states, "3jam's web site and service will be shut down in the coming months, with details on that transition plan to be provided at a later date. Please stay tuned". Rich Tehrani theorized back in May that Skype is buying them. That certainly would make sense if Skype is gobbling up all the group SMS solutions. If Rich is right, I wouldn't be surprised if 3jam now let the cat out of the bag and announced who purchased them in the next few days.

Other competition to GroupMe comes from Google, which has group SMS in the Google Voice web interface, Google's 'Huddle' feature, Facebook with their mobile Facebook Messenger app, and Apple's iMessage application which has group SMS. Obviously missing from this this group SMS list is Skype and Microsoft.

To me GroupMe saw the writing on the wall that fierce competition from the likes of Apple, Google, and Facebook were going to diminish the value of this VC-funded company. Personally, I cannot wait for SMS, which the carriers still have a stranglehold on, to die. With most smart phone plans including unlimited data plans, and with a plethora of IM mobile apps (Skype, Facebook, Nimbuzz, AIM, Twitter, etc.) why pay for SMS text messages?

Yes, the convenience of using your phone address book to text message any of your friends is convenient, but it is becoming more and more likely your friends are in one of your social networks, like Facebook. Text messaging is a single mode of communication that doesn't let you escalate to a voice or a video call. That's where the future is headed.

For instance, you send a friend an IM in the Facebook app, then within this same app you can send a voice message such as "I love you" or even dictate a long voice message that is too long to type. After the one-way voice messaging you can escalate it to a full two-way VoIP call. Finally, you can decide a video call is in order. Get the picture? That's why I see this $85 million as a wasted investment. Sure Skype can roll these features into the Skype client, but you're telling me they couldn't built this themseles from scratch? Both Skype and Microsoft are software development companies. They can't build such a a simple feature? Maybe GroupMe owns some group SMS patents, otherwise this really doesn't make a whole lot of sense.

I should add that GroupMe leverages Twilio, a cloud-based service that enables developers to add VoIP capabilities to any website with just three lines of code. Perhaps Skype should have acquired Twilio instead?

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