VoIP Solutions, IP Telephony and Unified Communications: Microsoft`s Skype Acquisition Will Change VOIP, Video Chat Game

By Nicholas Kolakowski  |  Posted 2011-05-10 Print this article Print
Microsoft Acquires Skype

Microsoft Acquires Skype

Under the terms of the agreement, Skype will become a business division within Microsoft, headed by Skype CEO Tony Bates.
Microsoft will pay $8.5 billion for Skype, turning the voice-over-IP provider into a business division headed by Skype CEO Tony Bates. Microsoft CEO Steve Ballmer, along with Bates, used a May 10 press conference to describe how Skype's assets will be tightly integrated with Microsoft products ranging from Xbox Kinect to Windows Phone, although support for "non-Microsoft client platforms will apparently continue for the duration. As an independent company, Skype remained a recognizable brand worldwide despite rising competition from the likes of Google and smaller VOIP services. Rumors circulated for days that Skype, having delayed its $100 million IPO, was eyeing a partnership with another tech giant. Skype previously found itself an acquisition target in 2005, when eBay paid $2.6 billion in cash and stock for the then two-year-old company. Four years later, the auction site sold a majority of its Skype holdings to a team of private investors for $1.9 billion in cash. As its user base topped 170 million, the company was apparently arranging an IPO—plans obviously shelved, now, thanks to the Microsoft takeover. Analysts seem split on how well the acquisition will work out for Microsoft in the longer term. On a strategic level, though, it's undeniable that Skype's huge customer base could give Microsoft considerable influence within the evolving VOIP and video-conferencing market. The acquisition also denies Google (or Cisco, or some other tech giant) the opportunity to seize Skype's assets for its own ends.
Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.

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