Tuesday, May 10, 2011

Microsoft To Acquire Skype for more than $8 Billion


UPDATE: It’s official. Microsoft acquires Skype for $8.5 billion. Read here

Kara Swisher of AllThingsD confirmed the acquisition is already a done deal and would be formally announced tomorrow morning.

The purchase is a bold move for the software giant and its biggest acquisition in more than three decades.


The big price will give Microsoft–which has struggled in its online efforts and has lost billions of dollars for its work–a big brand name on the Web.


With Skype, which has been aggressively expanding, Microsoft will continue to lose money in its Internet efforts. Skype lost $7 million on revenue of $860 million. Operating profits, which Skype highlighted, were $264 million.


But, sources said, the concept is bigger than just money, including getting access to Skype’s 663 million registered users.

Skype has had a big-company owner before–eBay Inc. paid $2.6 billion in cash and stock for it in 2005, as a way for the auction site’s buyers and sellers to communicate.

Is this a good investment by Microsoft? I think it is. They might be planning an integrating of Skype to their Live services and WP7 platform. Apple FaceTime and Google Voice now has a serious competitor with Microsoft leap-frogging everyone in the VoIP market.

[via] Wall Street Journal | BoomTown

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