Microsoft finalizes $8.5 billion Skype deal

By on October 14, 2011, 2:30 PM

Microsoft has formally closed its $8.5 billion acquisition of Skype today, giving the software giant a major foothold in the growing market for Internet telephony services. Starting today Skype will become a new business unit within Microsoft, with Skype CEO Tony Bates heading the division and reporting directly to Microsoft CEO Steve Ballmer.

"This represents a huge leap forward in Skype’s mission to be the communications choice for a billion people every day," said Bates in a post at the official Microsoft blog. "Joining forces with Microsoft is the best way to accelerate this mission and capitalize on our position at the intersection of social, mobile and video communications."

The Skype division will continue to offer its current products to millions of users globally and across multiple platforms, including those of its rivals such as Apple's Mac OS X, iOS, and Google's Android. In other words, it will be business as usual for now, but down the line Skype will be integrated into a variety of Microsoft products. The company has said it plans to integrate Skype across numerous consumer products such as the Xbox 360 and Windows Phone devices.

It's been a long road for Skype, founded back in 2003, which was first acquired by eBay in 2005 for $2.6 billion in what's considered a failed experiment to have buyers and sellers communicate via voice calls on the auction site. The latter gave up on Skype in 2009, selling a 70% stake to a group of technology investors. Despite their huge user base and household name in the world of communications, Skype was still on its way to becoming profitable, but with eBay and partners anxious about the delayed initial public offering they had been pushing for a sale of the company.

It remains to be seen if the next phase of Skype's life as part of Microsoft proves a better fit than its former owner. The transaction is still under antitrust review in some countries, but U.S. and European Union regulators have already given Microsoft and Skype their blessings.

User Comments: 8

Got something to say? Post a comment
RH00D RH00D said:

I love it. I can't wait for Skype to be fully integrated across Windows, Windows Live, Xbox Live and Windows Phone 7 (and of course every other platform it already supports).

Guest said:

This is gonna be terrible! Microsoft are gonna ruin Skype ffs

kingmarku said:

I remember how pissed I was when Microshaft ruined Hotmail when they bought that. It still sucks. I hope they don't do the same to Skype but have my doubts. hopefully someone else will step up with an open venue do-all even better replacement by the time the MBAs finish ruining it.

Guest said:

well, looks like im going to stop using skype


Guest said:

If Skype turn out to be as bloated as Windows Life Messenger, I'll search for an alternative.

Very old versions of MSN were simple an sleek. Now look at it, banners and ton of features that you don't use and make you feel like a 12 year old.

Skype is already going in the wrong direction for me. Since the last few versions the interface is prettier, but more incomprehensible. Hell I can't even shut it down other then forcing it via the item tray.

I fear things might get worse.

fpsgamerJR62 said:

As long as it remains free, it doesn't really make a difference who owns Skype. I just use it to keep in touch with my brother and sister who live and work in different countries. As to closing down Skype, I've always done that using the program icon in the system tray after closing the main program window. It has been that way since I started using Skype and long before Microsoft became interested in acquiring Skype.

Guest said:

I think Microsoft will end up using Skype for it's consumer based products and use Lync for it's business based poducts, with a connector between them.

Load all comments...

Add New Comment

TechSpot Members
Login or sign up for free,
it takes about 30 seconds.
You may also...
Get complete access to the TechSpot community. Join thousands of technology enthusiasts that contribute and share knowledge in our forum. Get a private inbox, upload your own photo gallery and more.