Technology giant and leader of the desktop operating system market Microsoft has announced that it will soon "retire" its instant messaging tool called Windows Live Messenger and switch to Skype. Microsoft already owns Skype, having bought the company for $8.5 billion about 18 months ago.
The company has announced that it will stop supporting Live Messenger by March 2013, except in China, where it will continue to support the older messenger for some more time. Since it owns Skype, this should be seen as part of Microsoft's strategy to offer a better messaging solution to its users.
Then known as MSN messenger, Windows Live Messenger was launched in 1999. Initially it only allowed users to send text messages to each other, but with time Microsoft added other capabilities to the software, including the ability to send photos, make video calls and even play games with other users. In 2009, WLM was reported to have 330 million users.
Avoiding Chat Cannibalization
According to Gartner's Brian Blau, Microsoft wants to avoid two of its products competing with each other in the same market, a phenomenon known as cannibalization. Right now, WLM has more than double the user-base of Skype. This makes it second to Yahoo Messenger in the list of top messaging solutions in the market. Skype has more than 30 million users.
Other advantages of Skype include its premium services that allow for an income stream for its owning company, its compatibility with Xbox, and its integration with mobile phones running on Windows Phone 8 software.
Microsoft is offering an easy way for WLM users to transition to Skype by offering a tool that automatically exports their contacts on WLM to Skype. There are risks that users may switch to other applications such as AIM or Google Talk, but Microsoft's tie-up with Facebook should help it retain most of its users.