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Microsoft Finalizes Skype Deal

October 14, 2011

Microsoft announced Friday that it has completed its $8.5-billion acquisition of Internet telephony provider Skype Global, giving the software giant a significant foothold in the Internet telephony market.

Skype will now become a new business unit within Microsoft. Skype´s CEO Tony Bates will become the president of the newly created Skype division. Microsoft said now that the deal is closed, it can look forward to integrating Skype into a variety of its products.

“Skype is a phenomenal product and brand that is loved by hundreds of millions of people around the world,” said Microsoft CEO Steve Ballmer in a statement. “We look forward to working with the Skype team to create new ways for people to stay connected to family, friends, clients and colleagues–anytime, anywhere.”

“By bringing together the best of Microsoft and the best of Skype, we are committed to empowering consumers and businesses around the globe to connect in new ways,” Bates said in a statement. “Together, we will be able to accelerate Skype´s goal to reach 1 billion users daily.”

Although the deal met final approval last week from European regulators, the acquisition is still under review in a few countries, and will be completed in those countries when such reviews are closed, Microsoft said. It did not name the countries involved. The US Department of Justice approved the deal here back in June.

Microsoft announced the deal to acquire Skype back in May, and said at that time it would be integrated with Microsoft´s products, and would not affect availability of the popular Internet calling applications on platforms from rival companies.

Skype will continue to offer its current products to its users, Microsoft said in its announcement on Friday.

This deal marks the third big acquisition for Skype, which was founded in 2003. It was first acquired by online auction company eBay for $2.6 billion in 2005. EBay then sold off most of the company to private equity owners, led by Silver Lake, for $1.9 billion in 2009. Now, Microsoft purchased the Internet telephony before it began an IPO.

Skype´s voice over Internet Protocol (VoIP) services let users hold free video and voice calls over the Internet. Skype charges a fee for “SkypeOut,” which lets Skype users dial ordinary phone numbers, and “SkypeIn,” which lets users dial and ordinary phone number that connects through to a Skype account online. The services bypass expensive international calling rates by using conventional telephone service.

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Source: RedOrbit Staff & Wire Reports



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