Microsoft Buys Skype For $8.5 Billion
Microsoft Buys Skype For $8.5 BillionMay 11 2011 - Business - Farhad Divecha
The popular VoIP service Skype has just been bought over by Internet giant Microsoft. The deal has been finalised for a staggering $8.5 billion.
This is Microsoft’s largest takeover deal yet, and it is hoped that this deal will place them in a better position to deal with the onslaught of laptops, mobile phones, tablets and other devices.
Microsoft CEO, Steve Ballmer, made this announcement during a recent conference in San Francisco. The VoIP service will be paid for fully in cash, to become a part of Microsoft.
Services on Skype will be integrated with Microsoft’s existing platforms such as Xbox Live, Kinect, Outlook and Hotmail. Microsoft hopes to be able to put this technology to use for purposes such as video chats on Xbox, mobile conferencing through the Windows phone, audio chats between business associates and many more person 2 person services. This should enable Skype to reach a much larger audience worldwide.
Steve Ballmer has said, “By bringing together the best of Microsoft and the best of Skype, we will empower people around the world with new technologies that should bring them closer together.”
Earlier, Skype had been bought over by eBay, but the arrangement did not work out very well and Skype sold their major share shortly thereafter. It is a known fact that Skype had been on the lookout for someone to take over the company. It is believed that Google and Facebook were among the companies that showed an interest in the acquisition.
While Skype’s main offering of free voice and video calls over the Internet has been the main driver of its growth, the service has been making substantial losses over the last 5 years. After the amalgamation with Microsoft, the Skype user base will jump from 107 million to 660 million, which should help improve the balance sheets.
Microsoft has also said that they will continue to support Skype’s non-Microsoft based platforms such as Mac OS X, Linux, Android, Blackberry, iOS and others.