Skype Bought By Microsoft for $8.5 Billion

Microsoft announced today that it will acquire Skype for $8.5 billion – marking the largest acquisition in the company's history.

Skype runs the giant global videoconferencing and voice communication network that has 170 million subscribers and logged 207 billion minutes of conversations last year, according to the company.

The service is free, though the company has a paid offering for premium services such as establishing multipoint conferences and communications with non-Skype users.

Microsoft's decision to buy Skype was unexpected, through rumors started swirling yesterday of a possible deal. Although Skype, through its investor group Silver Lake, had been considering an initial public offering, there were also rumors in recent days that Facebook and Google were interested in acquiring the company.

Also, Microsoft has its own communications technologies including Lync for enterprise customers and Windows Live Messenger, but the acquisition of Skype promises to extend that footprint, Microsoft CEO Steve Ballmer said in a prepared statement.

"Skype is a phenomenal service that is loved by millions of people around the world," Ballmer said. "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." .

Microsoft intends to run Skype as a separate division, to be headed by its CEO Tony Bates, who will become president of that business. The deal is subject to regulatory approval.

Skype, based in Luxembourg, was founded in 2003 and acquired by eBay in 2005 for $2.6 billion. The eBay acquisition turned out to be a drag on the company, which last year spun it off.

About the Author

Jeffrey Schwartz is editor of Redmond magazine and also covers cloud computing for Virtualization Review's Cloud Report. In addition, he writes the Channeling the Cloud column for Redmond Channel Partner. Follow him on Twitter @JeffreySchwartz.

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Sun, Jan 19, 2014

Hi,I am an MBA 2nd yr student from NMIMS, one of the top 10-15 b-schools in India. I am goinghttp://i DOT Case in point and other materials.I am located in Mumbai, India. I am fine for discussions over skype or gtalk or any other online media.

Sat, Jan 18, 2014

Hi, I'm Kevin Meyer, from Geneva in Switzerland. Looking for someone to pciatcre in English (fluent) or French (fluent). I've read Case in Point and many Case studies from universities, but would want a more exchange-based experience.Don't hesitate to contact me.Thanks,Kevin

Fri, May 13, 2011 MH1

This is great news! Making integration and collaboration much friendlier and easier for many many Windows folks across the globe.

Wed, May 11, 2011 Lambada Mexico

I don't think this is a negative thing, i have to say that windows 7 was a very well done operative system, MS may have something good for Skype :D

Wed, May 11, 2011

Skype aint perfect as is so I can only imagine the quality in the future. I'll have to find something else. Liek they say nothing good lasts forever!

Wed, May 11, 2011

I fear we will loose skype clients for other operating systems than those from microsoft and to kill off any "openskype" client, they will make big changes to the protocol and now only ms-windows 8 users will have access to skype.

Wed, May 11, 2011

I am so sorry that Skype was sold to Microsoft.... There are a lot of other liberal companies out there... Why exactly Microsoft???? Bye bye Skype!!

Tue, May 10, 2011

Great, that's the end of good ol' skype. They'll ruin it just like they did iView Media Pro and everything else they touch. Bummer.

Tue, May 10, 2011 L S

Skype is not perfect, but now I expect the quality of service to plummet under the crushing grasp of the evil MS empire.

Tue, May 10, 2011

Ah well I suppose that is the end of the free worldwide communication everyone loves...Microsoft will put an end to that eventually...they will expect us all to pay in future...not me !!!!what a shame !!!!

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