Microsoft Buys Skype for $8.5 Billion in Cash



Just last week our own Cynthia Boris posted “Facebook to Buy Skype? Say It Ain’t So!” Well, Cynthia, it ain’t so but since the real buyer is Microsoft we’ll have to see how you feel about that one.

Microsoft has officially announced their purchase of Skype after the rumor mill had all but confirmed it late yesterday. The price was a rather substantial $8.5 billion in cash.

As with most purchases of this magnitude (especially by Microsoft who has been out of the major M & A picture for quite some time now) opinions about the general goodness or sheer awfulness of the move abounds. For the record, my thoughts are if Microsoft simply owns it, leaves it alone and just is most interested in keeping it out of the hands of the Zuckerberg’s and Page’s of the world that’s fine by me. If they, however, give it the Microsoft treatment (in other words, eff it up because it’s one of those Internet thingys) well then that would suck.

But back to others opinions and thoughts. From Robin Wauters of TechCrunch

The $8.5 billion question: did Microsoft overpay for Skype?

Perhaps, perhaps not. Only time will tell. As always with these things, the many tech industry pundits and analysts will look at this deal from all possible angles and then some, and still only a handful will end up being somewhat accurate when we look back in a couple of years.

From a non-financial point of view, the acquisition makes a ton of sense today, though.

Marshall Kirkpatrick of ReadWriteWeb outlines a series of fears and hopes around the acquisition with fears including neglect of the product and malware concerns while hopes include the more wide scale disruption of the telephony landscape and the development of Skype as a true social network.

msnbc.com says

The deal would be a huge boost to Microsoft’s efforts online and especially in the smartphone market, where it has struggled.

The deal also would represent a successful exit strategy for the investors who own Skype, which had announced plans for an initial public offering last year but more recently delayed them while they considered other options.

As for Microsoft itself? Well, it’s unicorns and rainbows time, of course. From the official press release (via All Things Digital)

“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.

So there you go. Skype is now NOT owned by Google or Facebook which may be the biggest angle of this story in the end. Where it ends up only time will tell. One thing we do now know is that Microsoft isn’t going to just sit on its $50 billion in cash reserve bottom as the online world races by them.

Now the question begs, who, if anyone, is next?

  • http://www.insurancesuffolk.com Long Island Insurance

    Microsoft “Skype” eh? Don’t know if I will ever get used to that. :)

  • http://www.looktotheright.com Noah

    DONT FORGET. Microsoft owns Facebook! No not all of it but there is some significance there…

  • Cynthia Boris

    LOL, so they came in like an ebay sniper and grabbed it up at the last minute. Interesting. My initial reaction is why. What are they going to do with it other than pre-load it on new computers? I do like (hush now) where Microsoft is going with making all of the programs talk to each other, so if this leads to an easier way to share information over Skype, I’m all for it.

    For example, I use Skype to work on fiction projects with a friend and if they can streamline sharing Word docs in a collaborative way, I’m for it.

  • http://www.limohiredirectory.co.uk/ Limo Hire

    Skype also become useless like Bing and Hotmail.

  • http://raheel-afzal.blogspot.com/ Raheel Afzal Khan

    So we can expect some rapid changes in interface( will it be more user friendly?), or might be some bugs LOL