Why Microsoft is Buying Skype for $8.5 Billion. Skype CEO Tony Bates Updated at 12 midnight. Microsoft has bought Skype for $8.5 billion, in an all-cash deal. The deal closed a few hours ago. is close to finalizing a deal to buy Skype for between $7 billion to $8 billion. The Wall Street Journal confirmed the news after we had first reported it yesterday. Skype has been up for sale for some time, thanks to some very antsy investors. It won’t surprise me if Microsoft comes in for major heat on this decision to buy Skype — and the software company could always botch this purchase, as it often does when it buys a company.
I also don’t believe Facebook and Google were serious buyers. Guess Who’s the Big Winner The biggest winner of this deal could actually be Facebook. Facebook needs Skype badly. Facebook can also help Skype get more customers for its SkypeOut service, and it can have folks use Facebook Credits to pay for Skype minutes. Why Did Skype Want To Sell? The company had bet heavily on is video sharing service. So Who Made What? Is Microsoft About To Overpay For Skype? Update 5/10: Confirmed, $8.5 billion in cash. The deal buzzards are swirling around Skype, and Microsoft may end up with the prize. Om first reported the rumor, which is now getting major play by the WSJ. Microsoft is in final negotiations to buy Skype for $7 billion, according to the WSJ report. The final price might go closer to $8 billion.
Google and Facebook were also sniffing around Skype, which put off its IPO earlier this year to buy more negotiating time. Skype would fit into Microsoft’s enterprise business as a communications hub for telephony, video conferencing, and online meetings. The chances that it does screw it up if the deal goes through, however, are large. When you think of Microsoft, you don’t exactly think about voice communications. But what about Windows Phone, Microsoft’s mobile OS? So yes, there is logic to the deal. Tweet reaction #1. Tweet reaction #2. Sky.Net. Microsoft acquired Skype for.. For Microsoft, Skype Opens Vast New Market in Telecom. Skype and Kinect could be Microsoft’s new killer combo. Update: It’s official: Microsoft adds new ‘Skype Division’ in $8.5 billion deal Microsoft’s blockbuster agreement to acquire Skype is all but assured now, with multiple reports citing a purchase price of $8.5 billion, including assumption of debt. The deal is already raising lots of eyebrows, with New York Times columnist David Pogue’s readers turning it into a running joke on Twitter.
The skepticism is warranted. Microsoft has had a rough time with big acquisitions in the past, and Skype will be seen by many in the industry as tying its fortunes to an over-the-hill technology giant that has struggled in consumer markets. But many of the people trying to wrap their heads around the deal are missing an important point — the more than 10 million Microsoft cameras connected to television screens in homes around the world. That’s how many Xbox 360 Kinect sensors have been sold in six months. The existing video chat feature in Microsoft Kinect. Microsoft's Bill Gates says he advocated Skype takeover. 18 May 2011Last updated at 14:31 Bill Gates Microsoft's founder, Bill Gates, has said he advocated the company's takeover of Skype, and urged other board members to support the move. Last week Microsoft agreed to pay $8.5bn (£5.2bn) for the loss-making internet phone service. "I was a strong proponent at the board level for the deal being done," Mr Gates, Microsoft's chairman told the BBC's Hardtalk programme.
The multi-billion dollar deal is Microsoft's largest ever acquisition. "I think it's a great, great deal for Skype. Skype enables its users to contact each other over the internet for free, while charging for calls made to both traditional landline phones and mobiles. The Luxembourg-based company, which has 663 million users worldwide has however struggled to make a profit. But in the interview with the BBC's Stephen Sackur, Mr Gates said the decision to buy Skype was strategic. "The idea of video conferencing is going to get so much better than it is today. Microsoft’s Plans for Skype Are Unclear.