Microsoft Corporation (MSFT): Were We Hoodwinked Over NSA Skype-tapping?

Microsoft Corporation (NASDAQ:MSFT), despite a couple of statements made regarding its alleged involvement in the National Security Agency (NSA) PRISM online surveillance program, apparently still has some ‘splaining to do. While the company is being questioned repeatedly about what it knew and how much it knew in advance of the NSA snooping expedition – and whether Microsoft did in fact allow the NSA to gather data, rather than it being “invaded” through a back door as the company has claimed – there is another question on the tips of tongues. Not only is Microsoft one of the companies implicated in PRISM, but also Skype – a Microsoft subsidiary since 2011.

Skype was one of the nine tech companies claimed to have been part of the NSA operation, though Microsoft Corporation (NASDAQ:MSFT) is getting a lot of inquiries because the NSA listed Microsoft as a “first partner” in the PRISM project. While some are trying to probe into what that meant – was Microsoft complicit in cooperating with the NSA? – there is also a question regarding Skype. Skype had started out with the reputation as being a secure forum for one-to-one chatting, voice and video calls by computer.

Skype had a system where Skype-to-Skype calls and chats never went through central servers, so the conversations were truly private between the two parties – with no central servers for the conversations to go through, there was virtually no way that Skype calls could be tapped or intercepted.

However, after Microsoft Corporation (NASDAQ:MSFT) bought Skype a couple years ago, there were discussions around the tech community that Microsoft had transformed Skype to where it would be compliant with law-enforcement requests or demands for information. While no one seems to know for sure, Skype has stonewalled in the past when asked to provide information about its wiretapping capabilities and risks.

What is fueling more speculation about Skype and Microsoft in their involvement with the NSA was a leaked PowerPoint slide that referred to a guide for how to collect data from a Skype call, if that call is made from a phone line to any means of communication on the other end, provided the Skype users are connected by computer alone.

In other words, the NSA seems to have found a way to actually Skype-tap certain conversations. What might this mean for Microsoft Corporation (NASDAQ:MSFT), if this information were true?