Microsoft to acquire Skype for $8.5 billion

Microsoft to acquire Skype for $8.5 billion

2011-05-10 20:39:47 GMT+7 (ICT)

REDMOND, WASHINGTON (BNO NEWS) -- Microsoft Corp. on Tuesday announced that it entered into a definitive agreement to acquire Skype S.A. for $8.5 billion, after the boards of directors of both companies approved the agreement.

With around 663 million users worldwide, Skype, which is based in Luxembourg, is the world's most popular Internet communications service company, and the acquisition is expected to become a big push in Microsoft's online services. It is expected to support several of Microsoft's devices such as Xbox and Kinect, Windows Phone, and connect Skype users with Lync, Outlook, Xbox Live and other communities.

According to the agreement, Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Microsoft CEO Steve Ballmer.

"Skype is a phenomenal service that is loved by millions of people around the world," said 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."

Founded in 2003, Skype was acquired by eBay in September 2005, and then acquired by an investment group led by Silver Lake in November 2009.

Under Silver Lake's leadership, monthly calling minutes have increased by 150 percent over the past 18 months, developing new revenue streams and strategic partnerships, acquiring the intellectual property powering its peer-to-peer network, and recruiting an outstanding senior management team.

The agreement represents Microsoft's biggest acquisition ever, previously marked by 2007's acquisition of AQuantive Inc. for around $6 billion.

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