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Skype’s disrupting days are over under Microsoft

For Skype users, it’s tough to see a bright side to Microsoft’s purchase of the popular internet-calling service.

For Skype users, it’s tough to see a bright side to Microsoft’s purchase of the popular internet-calling service. While many observers wonder about the possibilities of what Microsoft may do with Skype – such as incorporate it into Windows Phone 7 or Xbox Kinect services – it’s important to keep in mind what the company won’t do with it.

Skype was started in 2003 by the kings of disruption, Niklas Zennström and Janus Friis, who first gained notoriety by launching peer-to-peer network Kazaa. As with the file-sharing service, Skype really shook up the status quo by allowing free calls between computers. It proved wildly popular and soon expanded beyond the computer – North American users, for example, can today use Skype to make unlimited calls to any real phones on the continent for about $35 a year.

Very quickly, Skype decimated the long-distance calling business, which naturally didn’t make phone companies too happy. Then, Skype started expanding onto mobile phones. The same phone companies fought tooth and nail to block and limit Skype.

Given that its entire business depends on internet and wireless providers playing fair and not interfering with the connections people need to use it, Skype has historically been a strong proponent of net neutrality. The company has made submissions to regulators in both the United States and Canada urging strong laws that would prevent such abuses.

That position is unlikely to continue under Microsoft, a company that has strong ties to phone and wireless companies and one that has been largely missing in action on the issue of net neutrality on both sides of the border. In the U.S., Microsoft has been less than supportive of the need for strong laws while in Canada it has been silent. During the CRTC’s net neutrality hearings a few years ago, a host of technology companies – including Amazon and Google – jointly recommended action as part of the Open Internet Coalition.

Microsoft, despite depending on net neutrality for many offerings including Xbox Live and the current cloud services it’s pushing, was nowhere to be found in that discussion. The reason is simple: Microsoft would rather work with ISPs and phone companies than against them. The company has more than enough money to pay out to these companies to ensure its services work properly and it would be against its interests to form laws that would extend such benefits to potential competitors.

However else Skype is deployed and used under Microsoft, it’s a fair bet that its days of disruption are over. With Microsoft desperately scrambling to get into the mobile game, it’s also likely that it will start cutting deals with wireless carriers. This could take the form of higher fees for using Skype or a scaling back of its features in exchange for carriers pushing future Microsoft phones in their stores. After all, the owner of the enemy is their friend.

Rather than continuing to push the envelope, Skype is likely to evolve into a service that is ultimately friendly to carriers under Microsoft. If there is a bright side, it’s that any diminution of Skype will likely open up opportunities for competing services, such as Google Voice.