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Skype Acquired by Microsoft for $8.5 Billion

So much for those rumors last week that Google would be buying up the calling giant, I’d say.  Microsoft announced this morning that their acquisition of Skype for $8.5 billion has become official.  It’s looking like they plan to incorporate Skype’s service into a number of their products, but all we care about is Android, right?  Well, the press release specifically mentions that they “will continue to invest in and support Skype clients on non-Microsoft platforms” so no need to worry yet kiddies.

Full presser below.  

Microsoft to Acquire Skype

Combined companies will benefit consumers, businesses and increase market opportunity.

REDMOND, Wash., and LUXEMBOURG – May 10, 2011 – Microsoft Corp. (Nasdaq: “MSFT”) and Skype Global S.à r.l today announced that they have entered into a definitive agreement under which Microsoft will acquire Skype, the leading Internet communications company, for $8.5 billion in cash from the investor group led by Silver Lake. The agreement has been approved by the boards of directors of both Microsoft and Skype.

The acquisition will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities. The combination will extend Skype’s world-class brand and the reach of its networked platform, while enhancing Microsoft’s existing portfolio of real-time communications products and services.

With 170 million connected users and over 207 billion minutes of voice and video conversations in 2010, Skype has been a pioneer in creating rich, meaningful connections among friends, families and business colleagues globally. Microsoft has a long-standing focus and investment in real-time communications across its various platforms, including Lync (which saw 30 percent revenue growth in Q3), Outlook, Messenger, Hotmail and Xbox LIVE.

Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms.

“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 Skype’s 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. I’m looking forward to Skype’s talented global workforce bringing its insights, ideas and experience to Microsoft,” Ballmer said.

Speaking on behalf of the investor group that sold Skype to Microsoft, Egon Durban, managing director of Silver Lake, said: “We are thrilled with Skype’s transformation during the period of our ownership and grateful for the extraordinary commitment of its management team and employees. We are excited about Skype’s long-term future with Microsoft, as it is poised to become one of the world’s most dynamic and comprehensive communications platforms.”

Founded in 2003, Skype was acquired by eBay in September 2005, and then acquired by an investment group led by Silver Lake in November 2009. Skype has made impressive progress over the past 18 months under Silver Lake’s leadership, increasing monthly calling minutes by 150 percent, developing new revenue streams and strategic partnerships, acquiring the intellectual property powering its peer-to-peer network, and recruiting an outstanding senior management team.

Other members of the selling investor group led by Silver Lake include eBay International AG, CPP Investment Board, Joltid Limited in partnership with Europlay Capital Advisors; and Andreessen Horowitz.

The acquisition is subject to regulatory approvals and other customary closing conditions. The parties hope to obtain all required regulatory clearances during the course of this calendar year.

About Skype
Skype is communications software whose purpose is to break down barriers to communication. With an Internet-connected device, families, friends and colleagues can get together for free with messaging, voice and video. At low cost, they can also call landlines or mobiles virtually anywhere in the world. Skype has recently introduced group video, allowing groups of more than two people to do things together whenever they’re apart.

Founded in 2003 and based in Luxembourg. Skype can be downloaded onto computers, mobile phones and other connected devices for free.

Via:   Engadget

  • Anonymous

    Wow, if skype is embedded in every Windows OS, that will increase lots of potential users.

  • Anonymous

    of course theMicrosoft will ruin it….

  • Dodgesityballer

    Great now I can definetly kiss my hopes of Skype coming to PS3 goodbye since XBOX and PS3 are obvious rivals smh. Thanks alot MS

  • chris

    I just noticed that this is an article about microsoft buying skype and the picture used is a pic of skype with video running on an HTC thunderbolt. I don’t know if its a random pic that u used or if theres more to it because i didnt read the entire article but since u used a pic of skype on a thunderbolt does that mean microsoft will finally release skype with video on android? i dont know if its a random pic or if u heard more news about skype on android.

  • chris

    It’s not a big deal that Microsoft bought Skype. I actually like it. Because remember something. Microsoft is the makers of one of the most popular video game consoles and the most popular computer OS. So now that microsoft owns skype maybe they can get things working properly and add skype with video to android phones since they do have alot of experience. and maybe even add skype as built in software to the future windows OS and/or xbox OS

  • http://twitter.com/MrBouche MrBouche

    Those who can’t do, buy.

  • Bert336

    Qik & Tango….here i come!!

    • chris

      qik is owned by skype and skype is owned by microsoft. so microsoft owns qik and skype which r the 2 most popular video chatting apps on android. so i guess you meant just Tango if u r trying to avoid microsoft?

  • Carmen Diva

    lol lots of android users are whining about this :)

    Personally, I think that Microsoft will do the smart thing by allowing competitors to use it on their platforms

    But for a fangirl who loves both Android AND windows phone 7, this could be great for Microsoft. This could very well mean that on their next wave of devices we may see FFC and Skype video chat support?

    Never used Skype on my Android device though

    • Anonymous

      And let it turn out like all the other Microsoft products on the mac and other systems that are NOT as good as the ones on the PC, or are just catching up….

  • Anonymous

    goo.gl/trxgK

  • stevaroo01

    Great! Now Microsoft got their paws on it, it’ll be ruined for sure!

    • chris

      yea. just like microsoft ruined windows OS and xbox 360?no one uses those 2 products since microsoft ruined them. lol

  • Anonymous

    alturl.com/5qmha

  • Anonymous

    alturl.com/5qmha

  • Mr.Joe

    I can’t believe how dumb people here are…

  • Anonymous

    What… other than the reported interest from Google and Facebook makes Skype worth $8.5 billion now versus the $2 Billion that eBay sold it for in September 2009? Did their income jump that much? (Doubt it) Did the user base grow so large as to increase the value 4 times what it was less than 2 years ago? I just don’t get it.

    I like Skype, and am disappointed that Microsoft bought it, but that is purely a selfish point of view, as even if Android support does continue, you can be certain it will play second fiddle to WP7 development.

    • chris

      well for the most popular video chatting software available that works on all computers and even on most phones that also has the ability to call any phone within the U.S. and other countries I think $8 billion sounds like a reasonable amount. Oh and they also own a few other smaller programs which takes away from the competition like Qik which is probably the second most popular video chatting app on cell phones.

      I agree that microsoft will make their skype app better then apples and androids but u forgot one thing. microsoft is also the owner of the most popular video game consoles and one of the most popular computer OS so they do have alot of experience with this kind of stuff. so skype can’t be that bad now that microsoft runs it. it might even be better then it used to be

  • Onelowchef

    why doesnt microsoft develop there own video chat app and leave this one to be developed for android devices?

    • Sp4rxx

      They did – and failed. It was called NetMeeting and it was loosely connected to MSN Messenger (or at least an interface similar to it).

      This is just like when EA acquires other game developers – a good thing will now go to crap. Since M$ can’t make a buck w/ their own products – NetMeeting, Windows Phone 7, etc. – they have to buy out the competition and tank them as well.

      • chris

        why even mention Netmeeting in this forum? lol. Netmeeting was made and ended before video chatting was even known. before most people even owned a web cam or a mic. It ended with windows XP which came out in 2001. It’s like using Windows 7 and saying its alot better then windows 95. They both may be microsoft OS but you cant really compare them since they are so far apart. Netmeeting was first released on windows 95 and continued on XP before it ended. that was before microsofts experience and popularity improved with the release of Xbox and Xbox 360 and their PC experience with the release of windows vista, which kinda lowered their popularity. but then they released windows 7 which was more popular and alot better.

        I don’t think microsoft failed with Netmeeting. they were just 15 years early. trying to release a video chatting software on computers with an internet connection that couldnt handle the speed like computers today can.

  • http://www.facebook.com/people/William-Quinn/1124794168 William Quinn

    I have always enjoyed using skype as it comes in handy when talking to friends overseas, now that MS has got hold of it I can see it turing to total crap. I also have to agree with what others are saying about MS not putting in the work to make a stable android platform with video.

    • chris

      by “total crap” do you mean like xbox 360 and windows OS? because microsoft owns them also and last time i checked they are 2 of the most popular computer OS and video game consoles.

  • http://twitter.com/protozeloz Abel

    i would insult and swear under bill gates grave but thats not my stile….. well veer here I go

    • Mr.Joe

      Bill Gates stepped down HOW many years ago? Get your head out of your ass and with the times.

      Not only that but Bill Gates is also one of the best philanthropists out there. For you to be such a dumb dumb is insulting to charity!

  • http://iamandroid.co/profile/rocktoonz Rocktoonz

    and big brother just keeps getting bigger

    • Mr.Joe

      UHHHH Google is just as much of a big brother (if not bigger) then MS.

      • http://iamandroid.co/profile/rocktoonz Rocktoonz

        never said they weren’t, just MS has more of an ominous stigma to it than Google does.

  • FortitudineVincimus

    I consider this.. pretty bad news

  • Anonymous

    MS hates Android so I don’t see Skype going too far with Android.

    • Mr.Joe

      What a dumb post.

      MS wants to make money. I’m sure they’ll let it run on other platforms to make more money.

      • http://twitter.com/samari711 samari711

        Windows phones are where MS wants to make money, depriving i*hones and android phones of a major service is one way to try and drive people to their platform. It wouldn’t be the first time they’ve done something like this.

        • Anonymous

          I disagree with that. They are a money maker, they wont miss an opportunity to make more. They already have a proven record in supporting *pples desktop/laptop OS with actual MS branded software. I don’t see it going different with a sub-brand.

      • Anonymous

        Yeah I agree, it about the money. I don’t think MS will miss the opportunity to make money off a competitor.

  • Anonymous

    Doubt we’ll be seeing Skype vidoe (officially) on Android anytime soon.

    • BroRob

      I disagree! I think it will be available for android and i*hone but wont be a free app anymore.

  • http://twitter.com/ByTheBook4 CrookByTheBook4

    I”m surprised the FCC is not stopping all these huge companies from buying the smaller ones up.

  • http://twitter.com/ByTheBook4 CrookByTheBook4

    I”m surprised the FCC is not stopping all these huge companies from buying the smaller ones up.

    • http://twitter.com/samari711 samari711

      You’re funny.

    • dave

      It’s not the FCC’s place. Perhaps you meant the FTC? What would be the logic for prohibiting acquisitions? There’s significant competition so it’s not anticompetitive.

      • http://twitter.com/samari711 samari711

        To be a bit more serious, it’d be the DoJ who intervened on anti-trust grounds. MS already has an integrated (although inferior/unpopular) solution and their buying Skype is likely to hurt their competitors in markets that they have a monopoly over (kiss your Mac and Linux clients goodbye) and it’s going to be harmful to consumers (of Android phones especially) if this purchase goes through. The DoJ has been fairly inconsistent lately with anti-trust objections and MS gives enough money to Democrats that I wouldn’t put any money on them objecting.

        • dave

          There are a few government agencies that can step in to stop the acquisition, but I wouldn’t count on it. Personally, I could give two sh!ts about Skype. I’ve never used it (yes, I realize I’m in the minority). I still don’t see the harm to “competition”. If/When Google fires up a functional the GV VOIP alternative for everyone, I would think Skype to mostly be irrelevant. If MS does restrict Skype, it’ll wither away and die. I just don’t see this as a big deal, except for those that like to poke MS in the chest.

  • Jeff

    Well,

    That is more or less the end of Skype…… Microsoft will ruin it….

    • Anonymous

      Yup… it was nice to talk to friends over seas.

    • Mr.Joe

      Oh shut up Jeff.

    • Ron

      I don’t see how Skype could get buggier

  • Jeff

    Well,

    That is more or less the end of Skype…… Microsoft will ruin it….