News: Microsoft to Buy Skype for $8.5 Billion

Posted on May 10, 2011

In probably the worst-kept night-before secret of late, Microsoft has announced it will buy Skype for $8.5 billion—that’s US dollars, not Skype money. This will bolster Microsoft’s communications technologies, and also give them control of a very popular cross-platform service.

From the press release,

With 170 million connected users and over 207 billion minutes of voice and video conversations in 2010, Skype has been a pioneer in creating rich, meaningful connections among friends, families and business colleagues globally. Microsoft has a long-standing focus and investment in real-time communications across its various platforms, including Lync (which saw 30 percent revenue growth in Q3), Outlook, Messenger, Hotmail and Xbox LIVE.

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

We’re not sure what this means for the Skype apps for the Mac or iOS, but you can probably count on an iPad version not seeing the light of day.

Furthermore, Microsoft will run Skype as a separate entity, a new business division with the current Skype CEO (soon to be president of the Microsoft Skype Division) Tony Bates reporting to Steve Ballmer.

In case you forgot, Skype was purchased by another tech giant awhile back to try to “enhance” the portfolio, but that had a rocky ending:

Founded in 2003, Skype was acquired by eBay in September 2005, and then acquired by an investment group led by Silver Lake in November 2009. Skype has made impressive progress over the past 18 months under Silver Lake’s leadership, increasing monthly calling minutes by 150 percent, developing new revenue streams and strategic partnerships, acquiring the intellectual property powering its peer-to-peer network, and recruiting an outstanding senior management team.

If this acquisition gets approval (we assume it will), could this mean that Microsoft will rename Skype “Microsoft Windows Live Chat Better” or “Microsoft One Chat”…maybe?

This post has been filed in News