Rumors swirled yesterday of a Skype acquisition by Microsoft and they’ve now been proven to be true. Microsoft has officially announced a deal under which Microsoft will acquire Skype, the leading Internet communications company, for $8.5 billion in cash from the investor group led by Silver Lake. This is a very aggressive move by Microsoft to get into the “increasingly-converged worlds of communication, information and entertainment.”
Buying Skype—a service that connects millions of users around the world via Internet-based telephony and video— would give Microsoft a recognized brand name on the Internet at a time when it is struggling to get more traction in the consumer market.
The acquisition will increase accessibility of real-time video communications for both consumers and enterprise users, in addition to providing revenue opportunities for both parties. Skype’s 170 million users will join the family of real-time communications platforms at Microsoft, including: Lync (which saw 30 percent revenue growth in Q3), Outlook, Messenger, Hotmail and Xbox LIVE.
“Skype is a phenomenal service that is loved by millions of people around the world,” said Microsoft CEO Steve Ballmer. “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.”
Skype will be taken under Microsoft’s wing as a new business division within the company. Skype CEO Tony Bates will become President of the Microsoft Skype Division, reporting directly to Ballmer, who says “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.”
Egon Durban of Silver Lake said about the deal, “We are excited about Skype’s long-term future with Microsoft, as it is poised to become one of the world’s most dynamic and comprehensive communications platforms.”
If you recall, it was just a short while ago that Google and Facebook contemplated a Skype acquisition. Now, Microsoft puts itself in a better position in this communications race by teaming up with Skype.