Of late, I have been thinking how I can be more strategic in business than tactical. There are several stories on how few top business leaders have reaped the benefits of effective strategies.
I was reading this monthly business magazine and found an article on Skype acquisition with some interesting insights, I am sharing that here. Skype was bought by eBay in 2005 for $2.5 billion. In September 2009 Salt Lake Partners and Andreessen-Horowitz (SL) took over the company and paid $2.75 billion. In May this year Microsoft bought Skype for $8.5 (SL made a whopping $5.75 billion in less than 2 years).
In 2009, SL took advantage of the fact that things weren't going that well between eBay and founders of Skype, interesting thing to know was that the founders held the IP for underlying Skype software and not eBay. And the founders weren't sharing the IP with eBay which dampened their growth strategies.
When SL put an offer to buyout Skype from eBay, all founders sued SL, but then SL struck deal with the founders to give 14% stake in the new company in return for IPs and eBay of course didn't object SL buying the business. Within next one year SL replaced 29 of top executives at Skype, replaced the CEO, came up with new revenue models (placing ads during video calls etc) and increased the users base by 200 million.
Microsoft who is sitting on huge cash and looking for deals which can give them some edge over its competitors, took this opportunity and bought Skype. Now we have to wait and watch how Microsoft leverages the technology and 600 million user base.
I consider SL's work here as "Strategy", I would like to share Subroto Bagchi's Blog here on Strategy which has very good examples http://www.mindtree.com/subrotobagchi/strategically-yours/.
