Microsoft has agreed to purchase the Internet phone service provider Skype for $8.5 billion.
The two companies announced the sale Tuesday, according to CNN.
The deal will give Microsoft an entry into the market for real-time video and voice communications. Microsoft pans to use Skype to support products like the Xbox gaming system and Windows phones.
“Skype is a phenomenal service that is loved by millions of people around the world,” said Microsoft chief executive Steve Ballmer.
In 2010, Skype had 170 million connected users who logged over 207 billion minutes of voice and video conversations in 2010. The company reported a $6.9 million net loss in 2010, on nearly $860 million in revenue. It reported $686 million in long-term debt, and slightly more than $1 billion in liabilities.
Skype will become a new business unit within Microsoft, to be run by current Skype CEO Tony Bates, who will report directly to Ballmer.
“Tony Bates has a great track record as a leader and will strengthen the Microsoft management team. I’m looking forward to Skype’s talented global workforce bringing its insights, ideas and experience to Microsoft,” Ballmer said.
Skype filed for a $100 million IPO last year. But the actual offering was delayed, and rumors surfaced last week that the company was in talks with Microsoft and Facebook.
My first thought when I read this was: “Well, let’s see how Ballmer will screw the pooch on this one too.”
That may not be a fair assessment as nothing is sure, but MS’s record in buying smaller companies and watching them die is noteworthy to say the least.
It’ll be interesting to see where MS will take it, frankly I’m not expecting much.
What do you guys think?
“Skype is a phenomenal service that is loved by millions of people around the world,”
So, is it time to start using another service because Microsoft isn’t?
Ah, fudgebumps…
Oh, this is going to end well…