Economics Project property of The Parish Episcopal School
Tuesday, May 10, 2011
Logans second post
In microsoft's attempt to fight back in their losing battle against the technological juggernaut Apple Inc. They have purchased the world renowned video chat website skype for 8.5 billion dollars. Clearly in an attempt to keep up with apples own video chat service IChat, prices for video chat services will no doubt be pushed significantly lower by the competition between the two technology heavyweights. However this is a large risk for Microsoft as the 8.5 billion spent on Skype becomes the opportunity cost of developing new technology that could dethrone the recent wave of successful apple products. Apples stock continues to steadily rise as strong sales of the iPad 2 and successful marketing of a new line of iPods are making for a strong second quarter. Five years ago Microsoft seemed the invincible company in technology and apple was the ailing has been left leaderless by an I'll Steve Jobs. But now it seems the tables have turned and Microsoft is in serious danger of becoming the next IBM.
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