Microsoft buys Skype for $8.5 bn in web shift

[cyano]

Microsoft Corp plans to buy internet phone service Skype for $8.5 billion in cash, as it seeks to regain ground against growing rivals such as Google Inc.

Microsoft's interest in the money-losing but popular service highlights a need to gain new customers for its Windows and Office software. Skype has 145 million users on an average each month and has gained among small business users.

Investors expressed skepticism, sending Microsoft shares down slightly. ?It doesn't make sense at all as a financial investment,? said Andrew Bartels, an analyst at Forrester Research. ?There's no way Microsoft is going to generate enough revenue and profit from Skype to compensate.?
The sale marks a big payday for Skype's owners, online auction site eBay Inc and a group of investors including Silver Lake, the Canada Pension Plan Investment Board and Andreessen Horowitz.
Skype delayed plans for an initial public offering that was expected to value the company at more than $3 billion. It was looking at other options, including tie-ups with Facebook and Google. Such a deal was expected to value Skype at $3-4 billion.
The Luxembourg-based company, which allows people to make calls at no charge but has also developed premium services, would give Microsoft a foothold in the potentially-lucrative video-conferencing market as businesses look for cheaper ways to communicate.
Skype could be combined with Microsoft software such as Outlook to appeal to corporate users, while the voice and video communications could be linked to Microsoft's Xbox live gaming.
In the long, Skype will offer Microsoft another route to develop its mobile presence, an area it has been focusing on, as PC usage comes under threat.
Skype was set to become a new business division within Microsoft with Skype Chief Executive Tony Bates in charge and reporting directly to Microsoft CEO Steve Ballmer, Microsoft said.
Microsoft shares were down 13 cents, or 0.5 per cent, at $25.70 in early Nasdaq trading.
The Skype deal is the biggest in the 36-year history of the world's largest software company. It was first reported late on Monday by tech blog GigaOM.
The $8.5-billion price tag was a surprise. Although the sum would not stretch cash-rich Microsoft, some said it was high for a company whose ownership had changed several times during its relatively short life.
?In this atmosphere of Internet Bubble 2.0, picking up an unprofitable online company for roughly 10 times sales probably seems downright cheap,? said Shanghai-based Michael Clendenin, managing director of consulting firm RedTech Advisors.
?But if you consider (it) was just valued at about $2.5 billion 18 months ago when a chunk was sold, $8.5 billion seems generous and means Microsoft has a high wall to climb to prove to investors that Skype is a necessary linchpin for the company's online and mobile strategy," he added.
Skype, formed in 2003, was bought by eBay Inc in 2005 for $3.1 billion. Last year, it had in $860 million in revenue, but posted a net loss of $7 million, according to data in its initial public offering filing.

cyano Reviewed by cyano on 30th May 2011. Microsoft buys Skype for $8.5 bn in web shift Microsoft Corp plans to buy internet phone service Skype for $8.5 billion in cash, as it seeks to regain ground against growing rivals such as Google Inc. Microsoft's interest in the money-losing but popular service highlights a need to gain new customers for its Windows and Office software. Skype has 145 million users on an average each month and has gained among small business users. Investors expressed skepticism, sending Microsoft shares down slightly. ?It doesn't make sense at all as Rating: 5

[softleaks]

dude , you typed this or copied and pasted here from somewhere else !

Even the alignment of the website you have copied have not been changed !!

[pankaj]

Why did Microsoft buy when they could download it for free !

[TLK]

lmfao pankaj.

[devilboy23]

Why did Microsoft buy when they could download it for free !

da fuck

[Ash]

Why did Microsoft buy when they could download it for free !

LMFAO!!!

[ScopeHosts.Sales]

Rofl ... Good Sense of Humour Pankaj

[iHate]

Why did Microsoft buy when they could download it for free !

Microsoft Bought the company not the license to use the software,
they now own Skype (the company and everything with it)

[esson]

Why did Microsoft buy when they could download it for free !

you know? you make me laugh this day

[pankaj]

you know? you make me laugh this day

Nice that I could make you laugh.

Microsoft Bought the company not the license to use the software,
they now own Skype (the company and everything with it)

I know. It was a joke.