May 11, 2011
Playing Catch-Up Again: Microsoft to Acquire Skype for a Whopping $8.5 Billion in Cash
After a fair amount of speculation, Microsoft officially announced yesterday that it will acquire Skype for $8.5 billion dollars:
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.
While not likely to have the ROI that Microsoft's $50,000 acquisition of the rights to QDOS has had, the Skype acquisition is the largest in Microsoft's history.
In Why Microsoft Is Buying Skype for $8.5 Billion, Om Malik writes "the biggest reason for Microsoft to buy Skype is Windows Phone 7 (Mobile OS) and Nokia. The software giant needs a competitive offering to Google Voice and Apple’s emerging communication platform, Facetime." Malik adds
[Facebook] gets the best of both worlds: It gets access to Skype assets (Microsoft is an investor in Facebook) and it gets to keep Skype away from Google. ... Facebook needs Skype badly. Among other things, it needs to use Skype’s peer-to-peer network to offer video and voice services to the users of Facebook Chat.
Playing Catch-Up Once Again. On Bloomberg, Dina Bass, Douglas MacMillan and Joseph Galante write
[Microsoft CEO] Ballmer ... is making Microsoft’s largest acquisition on a wager he can use Internet calling to play catch-up in online and Web advertising. He offered more than $7 billion to cover Skype’s debt and keep a rival from gaining a business that would add calling features to games, e-mail and software on computers and mobile phones.
Quoting from Skype Said to Have Demanded Over $7 Billion in Talks. [JH]