Microsoft Buys Skype for $8.5 Billion

Chris CrumBusiness

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Microsoft and Skype just announced that Microsoft is buying Skype for $8.5 billion in cash, and that the deal has already been approved by both boards of directors.

Skype is being sold by an investment group led by Silver Lake , which acquired it from eBay. The group also consists of eBay International AG, CPP Investment Board, Joltid Limited in partnership with the Europlay Capital Advisors, and Andreesen Horowitz.

The announcement is pretty surprising, considering Skype has been said to have been in partnership talks with both Google and Facebook. Google and Microsoft are of course bitter enemies, while Facebook and Microsoft are partners. It will be interesting to see what this means in that area.

“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.”

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"Microsoft and Skype share the vision of bringing software innovation and products to our customers," added Skype CEO 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."

"Tony Bates has a great track record as a leader and will strengthen the Microsoft management team," Ballmer added. "I’m looking forward to Skype’s talented global workforce bringing its insights, ideas and experience to Microsoft."

Under the deal, Bates will become President of the new Microsoft Skype Division, and will report directly to Ballmer himself. He said on the Skype blog:

I believe this acquisition is the very best way to extend Skype’s reach and will allow us to bring real-time video and voice communications to more people around the world than ever before. The combination of Skype and Microsoft will directly benefit all of you who use Skype by ushering in a new era of generative ways for everyone to communicate.

What I love most about this company are the people who have made Skype a verb. Not only the team here at Skype and our partners, but everyone like you who uses Skype every day – you are the people who have made Skype what it is.

Let's hope this acquisition goes smoother than the eBay's acquisition of Skype. eBay completed its sale of the company in November 2009.

Skype has been steadily breaking its own records. In late March, the company announced that it hit 30 million users online at the same time. Earlier this year, Skype acquired mobile video streaming solution Qik.

Microsoft says 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 also continue to invest in and support Skype clients on non-Microsoft platforms.

Chris Crum
Chris Crum has been a part of the WebProNews team and the iEntry Network of B2B Publications since 2003. Follow Chris on Twitter, on StumbleUpon, on Pinterest and/or on Google: +Chris Crum.