Microsoft just bought Skype for 8.5 Billion Dollars

Night_Hawk - Blogger
Microsoft confirms takeover of Skype


Skype had previously planned a share flotation
Microsoft has confirmed that it has agreed to buy internet phone service Skype.
The deal will see Microsoft pay $8.5bn (5.2bn) for Skype, making it Microsoft's largest acquisition.
Luxembourg-based Skype has 663 million global users. In August last year it announced plans for a share flotation, but this was subsequently put on hold.
Internet auction house eBay bought Skype for $2.6bn in 2006, before selling 70% of it in 2009 for $2bn.
This majority stake was bought by a group of investors led by private equity firms Silver Lake and Andreessen Horowit.
Other major shareholders include tech-firm Joltid and the Canada Pension Plan Investment Board.
'Defensive move' Microsoft chief executive Steve Ballmer said: "Skype is a phenomenal service that is loved by millions of people around the world.
Continue reading the main story Analysis

Tim Weber Business editor, BBC News website

It's a done deal: Microsoft has bought Skype for a whopping $8.5bn.
That's a lot of cash for an eight-year-old company that's not making a lot of money.
So what's in it for Microsoft?
For starters, the firm gets well over 600 million users who make Skype the world's largest phone company for international voice calls.
More importantly, Microsoft buys into a lot of potential.
Marry Skype's software with the Xbox Kinect and an HD television set, and Microsoft can make a powerful argument for getting into millions of living rooms.
Think beyond teleconferencing for the whole family: there's one-on-one training, home schooling, even patient care delivered remotely and in vision.
Smarten it up for the corporate world, and Microsoft can challenge the telepresence business of firms like Cisco and Polycom.
And Skype is multi-platform, reaching into the worlds of Apple and Linux.
Finally, Skype is mobile, and can be paired with Windows Phone 7.
The hitch: Microsoft boss Steve Ballmer will have to work hard to integrate Skype, to ensure the voice/video-over-the-internet company is not strangled by his firm's notorious bureaucracy.

"Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world."
Skype will now become a new division within Microsoft, and Skype chief executive Tony Bates will continue to lead the business, reporting directly to Mr Ballmer.
"It's a strategic asset and a defensive move [for Microsoft]," said Colin Gillis, an analyst at BGC Financial.
"If they can put it on Windows 8, it gives them an advantage. It helps them in the tablet market."
Other analysts say Microsoft's aim in buying Skype is to improve its video conferencing services.
Price concerns Although the price tag of $8.5bn will not stretch the US giant, some experts have questioned whether it is paying too much for a company that has struggled to turn a profit.
Michael Clendenin, managing director of consulting firm RedTech Advisors, said: "If you consider [Skype] was just valued at about $2.5bn 18 months ago when a chunk was sold off, then $8.5bn seems generous.
"[It] means Microsoft has a high wall to climb to prove to investors that Skype is a necessary linchpin for the company's online and mobile strategy."
This view was echoed by Ben Woods, head of research group CCS Insight.
"The big unanswered question is how do Skype assets work for Microsoft... how do you justify the price?" he said.
Skype was founded in 2003.
Calls to other Skype users are free, while the company charges for those made to both traditional landline phones and mobiles.

Night_Hawk - Blogger
Re: Microsoft confirms takeover of Skype

Microsoft buying Skype for $8.5 billion? [updated]

by Rene Ritchie, Monday, May 9, 2011,

Despite rumors that Google and Facebook were sniffing around, The Wall Street Journal is now claiming that Microsoft is about to break open the Redmond money bin and fork over $7 billion $8.5 billion for Skype. It could be announced as soon as tomorrow.
A deal represents Microsofts most aggressive move yet to play in the increasingly-converged worlds of communication, information and entertainment. Skype connects more than 663 million users around the world via Internet-based telephony and video, making it a key technology platform for a new generation of Web-savvy consumers. During 2010, those users made 207 billion minutes of voice and voice video calls over Skype.
Obviously, Skype is a hugely popular app not just on desktops but on mobile devices, including the iPhone, iPad, and iPod touch. Would Microsoft keep it free and freely available across platform? Would they try to build it into Windows and Windows Phone? Would they simply not be able to support it and just let it wither and die the way so many great technologies do once acquired by a gigantic corporation?
UPDATE: Kara Swisher of Boom Town says the deal is confirmed. [AllThingsD]
UPDATE 2: The deal is confirmed now as well as the amount $8.5 billion in cash. Microsoft PR Skype PR
Skype is a phenomenal service that is loved by millions of people around the world, said Microsoft CEO Steve Ballmer. Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.
Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Ballmer.
Microsoft and Skype share the vision of bringing software innovation and products to our customers, said Tony Bates. Together, we will be able to accelerate Skypes plans to extend our global community and introduce new ways for everyone to communicate and collaborate, Bates said.
Tony Bates has a great track record as a leader and will strengthen the Microsoft management team. Im looking forward to Skypes talented global workforce bringing its insights, ideas and experience to Microsoft, Ballmer said.
Will we have to stop saying lets all jump on Skype and start saying lets all jump on Microsoft P2P VoIP client for Windows Live Communications 7 Home and Student Edition?


Councller (250+ posts)
Microsoft to buy Skype in $8.5bn deal

Software giant to acquire internet phone service, both companies announce, as Microsoft attempts to compete with rivals.

Software giant Microsoft plans to acquire Skype, the online video conferencing service for $8.5bn, both companies have announced.

"Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world," Steve Ballmer, Microsoft chief executive, said on Tuesday.

The price tag makes it Microsoft's most expensive acquisition to date, topping the $6bn it paid for online advertising service aQuantative in 2007.

The deal will also bring the US-based software giant at least 600 million users worldwide, who use Skype to make free voice and video calls over the internet. Around 8.1 million of those are paying customers, who use the service to make traditional phone calls at discounted rates.

Microsoft said that Skype would become a new business division within the software company, and that Tony Bates, the Skype chief executive, will assume the title of president of the Microsoft Skype Division.

Skype was launched in 2003 by Estonian software developers who were part of the group that created peer-to-peer file-sharing service Kazaa.

The service is said to have lost $7m on revenue of $860 million last year.

Buying Skype could be a way for Microsoft to shed some of its business software image and gain momentum in a growing smartphone market.

Three years ago Microsoft attempted to buy Yahoo Inc for $47.5bn, but the deal was never closed. Yahoo is now worth about half of that.

Skype, which had delayed plans for an initial public offering, had recently been looking at other options, with reports that Facebook and Google were considering joint ventures with the company.

In 2009, eBay sold a majority stake in Skype to an investor group that included Silver Lake, the Canada Pension Plan Investment Board and Andreessen Horowitz for $1.9bn in cash and a $125m note.

EBay retained about a third of the company.