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May 31, 2012 at 11:06 AM

D10: Skype boss “doubling down” on Windows 8

RANCHO PALOS VERDES, Calif. — The phrase of the week at the All Things D conference is “doubling down” and Microsoft is placing the same kind of bets.

Tony Bates, president of the Redmond company’s new Skype division, said he’s “doubling down” on Windows 8. But he didn’t provide any details of how Microsoft’s most expensive acquisition will play on its flagship software and new foray into tablet computing.

Bates said he’s taking a cue from Apple Chief Executive Tim Cook and also “doubling down” on secrecy around upcoming products, although he said the next generation of Windows is a “huge opportunity” to broaden Skype’s reach beyond its current 250 million monthly users.

Although Bates was an engaging speaker, the lack of any news about upcoming products left Microsoft with a relatively low profile at D10. At last year’s conference, it unveiled the new Windows interface.

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A few hints about future direction were offered, though.

Bates said Skype is working on advancing the state of communications, beyond just communicating to “getting to know each other.” The direction is toward immersive services that enable a conversation to move from text messages to voice or video. Skype’s also working with Bing, drawing on its machine-learning advances to improve the “communications experience.”

Bates also sidestepped co-host Kara Swisher’s questions about integrating Skype with Microsoft’s Kinect system for the Xbox console and PCs.

Bates said Kinect is “more powerful than just an input to a games device.” It’s also “one of many inputs — ultimately video conferencing isn’t defined by one device,” he added.

Microsoft has a “great footprint” into the living room, but Skype has been looking broadly at ways to get its services into the home. Before Microsoft’s $8.5 billion acquisition of Skype closed seven months ago, Skype had made progress getting into Web-connected TVs.

Skype is available on other TV devices besides the Xbox, he noted, including a Skype box that can be connected to TVs and a new device it’s developed with Comcast.

Asked by an audience member about Skype’s relationship with phone carriers, Bates said Skype now handles 1.4 billion minutes of voice and video calls per day. Carriers may be concerned about that, but they also value the amount of data traffic that Skype is generating.

“I definitely see the business models evolving,” Bates said. “My view is the carriers want to get their ARPU [average revenue per user] and they’ll get it any way they can.”

Swisher asked whether Bates would like to run Microsoft someday. Bates didn’t say no, but said “it hasn’t come up in discussion, it’s not something I’m focusing on.”

“I’ve only been at Microsoft seven months,” said Bates, who runs Skype semi-autonomously from its pre-Microsoft base in Silicon Valley.

Bates then praised Microsoft Chief Executive Steve Ballmer, saying “he’s an incredible manager, I’m learning a lot.”

Bates was Skype’s chief executive before the merger. Earlier he was general manager of Cisco’s enterprise business.

“You’re almost too charming,” Swisher said, comparing the England-born Bates with other Microsoft executives.

Bates said his family annually sets goals on New Year’s and follows up a year later to see if they were realized. Generally about 60 to 70 percent are achieved, including an early one by Bates — to become chief executive of a company by age 45.

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