Microsoft buys Skype

Posted By | On 10th, May. 2011 Under Industry News, News | Follow This Author @GNReith

Microsoft have wrapped up a deal to acquire internet phone service Skype, reportedly costing $8.5 billion (£5b).

The terms of the acquisition have come as a shock to analysts, who feel the deal vastly overvalues Skype.

While Skype has 663 million registered users worldwide and gives Microsoft a foothold in voice and video communications, most of its existing services are free “and it has barely bumped along on profitability”, the Guardian reports. Skype currently has a debt of $686 million, which Microsoft will assume.

Microsoft said in a press release: “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.”

CEO Steve Ballmer added: “Skype is a phenomenal service that is loved by millions of people around the world. Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

The premise of Skype on 360 is certainly exciting, but is this a smart buisiness strategy?

Thanks to The Guardian (via CVG) for the info.

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