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Thread: Microsoft Buys Skype for $8.5 Billion

  1. #1

    Default Microsoft Buys Skype for $8.5 Billion

    All I can say is say goodbye to quality and especially support for any other platforms outside of Windows and Windows Phone (WinMo). Especially say goodbye to the Linux client with how much Microsoft hates Linux, and expect to see a slowdown in the development of the Mac client. Also, don't expect to see many updates at all for iOS or Android now their going to focus most of their energy on Windows, Windows Phone and Xbox 360. This IMO is not good news for users of Skype, at all.

    Though this could easily to sour like when eBay bought them in the past.



    NEW YORK (AP) -- Microsoft Corp. said Tuesday that it has agreed to buy the popular Internet telephone service Skype SA for $8.5 billion in the biggest deal in the software maker's 36-year history.
    Buying Skype gives Microsoft access to a user base of about 170 million people who log in to Skype every month, using the Internet and Skype usernames as a complement to the traditional phone network and its phone numbers.
    Microsoft said it will marry Skype's functions to its Xbox game console, Outlook email program and Windows smartphones. All of these platforms already have other options for Internet calling, but the addition of Skype users would expand their reach, making them more useful.
    Microsoft said it will continue to support Skype on other software platforms.
    The sellers include eBay Inc. and private equity firms Silver Lake and Andreessen Horowitz.
    Skype users made 207 billion minutes of voice and video calls last year. Most of that usage is free calling from computer to computer, which has made it difficult for the service to make money since entrepreneurs Niklas Zennstrom and Janus Friis started the company in 2003. An average of about 8.8 million customers per month, or just over 5 percent of the user base, pay to use Skype to call out to the regular phone network.
    The vast majority of paying Skype users is in Europe, where high country-to-country rates for traditional phone calls make Skype more popular than in the U.S., where state-to-state calling is cheap.
    Skype is the largest provider of international calling services in the world, surpassing any single phone company, according to research firm TeleGeography.
    Skype lost $7 million on revenue of $860 million last year, according to papers that the company has filed since announcing its intentions last summer to launch an initial public offering of stock. The IPO was later put on hold. Skype's long-term debt, net of cash, was $544 million at the end of 2010.
    The Skype takeover tops Microsoft's biggest previous acquisition - a $6 billion purchase of the online ad service aQuantive in 2007.
    Microsoft said Skype will become a new business division headed by Skype CEO Tony Bates, who will report directly to Microsoft CEO Steve Ballmer.
    Although it makes billions from its computer software, Microsoft has been accustomed to losing money on the Internet in a mostly futile attempt to catch up to Google Inc. in the lucrative online search market. Microsoft got so desperate that it made a $47.5 billion bid to buy Yahoo Inc. three years ago, but withdrew the offer after Yahoo balked. Yahoo is now worth about half of what Microsoft offered.
    Microsoft can well afford to buy Skype: On March 31, it had a cash hoard of $50.2 billion.
    Microsoft would be Skype's second large-company owner. EBay bought Skype for $2.6 billion in 2005, but its attempt to unite the phone service with its online shopping bazaar never worked out. It wound up selling a 70 percent stake in Skype to a group of investors led by private equity firms Silver Lake and Andreessen Horowitz for $2 billion 18 months ago.
    Besides eBay, Silver Lake and Andreessen Horowitz, Skype's other major shareholders are Joltid and Canada Pension Plan Investment Board.

  2. #2

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    I heard about this. I didn't know it was Microsoft; I thought it was Facebook.

    Damn you, lying radio stations!

  3. #3

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    I would rather Microsoft buy it then Apple. At least I wont have to make any changes to my systems unlike what would happen if Apple bought it

  4. #4
    Loopygone

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    They're keeping it as a separate entity with in the company, with the ceo of skype becoming the head of the department only answering to Balmer, and have promised to keep it platform independent. I hope they do, they'd be shooting themselves in the foot if they made it only for win7 and winphone7. Fact is most people use skype on android and iphone at the moment, wiping out a big chunk of your customer base isn't a good idea.

  5. #5

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    Quote Originally Posted by Loopy View Post
    They're keeping it as a separate entity with in the company, with the ceo of skype becoming the head of the department only answering to Balmer, and have promised to keep it platform independent. I hope they do, they'd be shooting themselves in the foot if they made it only for win7 and winphone7. Fact is most people use skype on android and iphone at the moment, wiping out a big chunk of your customer base isn't a good idea.
    Sure they will keep it separate for now but some day down the road they are just going to merge it into Windows Live Messenger (or maybe merge WLM into skype) and just buy Microsoft points to spend for calls. Its not very profitable to be supporting two IM services when one can do the job.

  6. #6

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    Quote Originally Posted by Siddy View Post
    Sure they will keep it separate for now but some day down the road they are just going to merge it into Windows Live Messenger (or maybe merge WLM into skype) and just buy Microsoft points to spend for calls. Its not very profitable to be supporting two IM services when one can do the job.
    And that is exactly what most tech experts have stated would be the wisest move for them to make. I love skype, I use it to allow the kids to talk to my grandma who lives 4 1/2 hours away weekly. Integrating it into windows also makes the most sense for Microsoft to do as well.

    Whoever bought Skype would do the very same things Microsoft will end up doing as well. The only difference is, people equate microsoft as evil, even though other companies are way worse than microsoft ever was

  7. #7
    Loopygone

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    The thing is, they haven't brought skype for desktop use, it's nothing to do with that. They needed skype to grab a hold on the mobile market, so they can stay calling the shots instead of just becoming an OS supplier. Andriod and iOS both have their own dedicated video calling/VOIP packages, Microsoft really needed their own to compete. I doubt they'll fold it into windows messenger.

  8. #8

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    Quote Originally Posted by Loopy View Post
    The thing is, they haven't brought skype for desktop use, it's nothing to do with that. They needed skype to grab a hold on the mobile market, so they can stay calling the shots instead of just becoming an OS supplier. Andriod and iOS both have their own dedicated video calling/VOIP packages, Microsoft really needed their own to compete. I doubt they'll fold it into windows messenger.
    They have tried to add video to messenger for years, and with Skype's already available chat/video capabilities, integrating it will not be hard at all.

    I wouldn't be surprised if MS didn't have skype bundled with messenger, much like alot of Google's stuff is integrated and bundled together in order to make it work

  9. #9

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    I was really hoping Facebook would buy them, if anyone did. Having integrated video chat within Facebook would be amazing. Now I never see it happening.

  10. #10

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    Quote Originally Posted by MisterD View Post
    I was really hoping Facebook would buy them, if anyone did. Having integrated video chat within Facebook would be amazing. Now I never see it happening.
    I'm glad they didn't. Facebook is terrible for guarding your privacy. I already know people who get "do you know" messages and find out the real names of other people on this site, and we're unsure whether it has to do with the e-mail you're using, or what's going on. Could you imagine if all your AB skype contacts suddenly started adding you on Facebook? And what if they made it mandatory to have Facebook along with Skype?

    Just too many issues, in my opinion.

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