If you’ve been online today you’ve probably seen that Microsoft has acquired Skype for $8.5 billion. While Microsoft has been taking a beating lately due to competition in the online world from Google, Facebook and others, and in the mobile space from Apple, Google, and others, the company is still sitting on a huge pile of cash so $8.5 billion to Microsoft is… well, it’s a lot of money any way you look at it, but Microsoft could still afford to make a few more equally large purchases this year without any difficulty. Still, it seems likely that the company could have picked up Skype for a much lower price.

Skype is probably the best known company in the internet voice and video communications space. Users can make free Skype to Skype calls or pay for premium features such as the ability to make cheap calls to international phone numbers from a PC, smartphone, or other supported device. Skype also recently launched group video calling and screen sharing functionality, making Skype a tool not just for personal communications, but also a cheap option for business communications.

At a time when Microsoft is competing in space where it’s not the market leader (Bing is barely competing with Google, and Windows Phone 7 still has a long way to go in terms of market share), it makes sense to see the company just go ahead and buy a market leader. But the move doesn’t just mean business as usual for Skype… it also means that Microsoft will be able to incorporate Skype technology into its other services including Xbox, Kinect, Windows Phone, and Windows computers.

We’ll also see Skype integration with Outlook, Xbox Live, and other tools.

Importantly, in the press release announcing the acquisition, Microsoft promises to “continue to invest in and support Skype clients on non-Microsoft platforms,” which means that Skype for Android, iOS, Mac, Linux and other platforms aren’t going anywhere… at least not yet and hopefully not ever. After all, Skype becomes a much less attractive tool for users if they can’t communicate with their friends using different platforms. That would be like buying an AT&T phone and being unable to place calls to Verizon customers.

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8 replies on “Microsoft acquires Skype for a whopping $8.5 billion”

  1. Microsoft had too much cash floating around, apparently. Personally I think the price they paid is grotesque but I assume they are not dumb and have plans. The people who bought Skype back were going nowhere with it so I’m not sorry to see them go. I just hope (naively) that they spread their windfall around…fat chance? If MS improves Skype and addresses certain grievances, I see no reason to be upset. They could create some goodwill for themselves…Android users especially.

    Big corps come and go. Neither Apple nor Google will push their luck too far. They have too high a profile and too much to lose.

  2. I guess there’s a bigger sucker than eBay, which bought Skype not too

    lnng ago for ~$3 billion, then sold it back to its founders for less than

    that.

    For some strange reason, I can’t shake the image of Osama bin Laden

    watching himself on Al-Jazera. Chalk this one up among the other

    boondoggles:

    – Daimer acquiring Chrysler

    – Cerberus acquiring Chrysler

    – Time Warner letting itself be acquired by AOL

    – Japanese company buying Rockefeller Center

    – Japanese company
    buying Universal Pictures

  3. Well that’s certainly news. Now it’s time they got their act together and offer video conf. for Android; tablets having thus far only Skype tel. service. There has been a lot of bitching about this and hopefully (if they are smart) Microsoft will quickly address this. I see no reason whatsoever to bemoan this buy-out. On the contrary, I think it’s a winner.

    1. People are hilarious. Do you really wear a seat on just those occasions in which you’re planning on getting into a car accident? The rest of the time, do you just drive around with your seatbelt off assuming that you’re never going to be involved in a car accident, and if you do then you’ll be uninjured? Is that the really the only level of thinking available to you, or can you appreciate that some actions are constrained by the self-interest of avoiding foreseeable but unintended consequences?
      If this announcement really repulses you, then think about avoiding dependence on “free as in beer” software and supporting “free as in speech” software by using it as much as you can. Yes, building a computing life around Free Open Source Software can be feel a little confining at times, just like wearing a seatbelt. However, the upside is that when something unsavory ends up happening to your favorite project then you’re protected and empowered. I think anybody who has been involved with proprietary computing long enough has been bitten by something like this, and I think that everybody who has been involved with open computing long enough has probably been immunized against something like this. The Free Software Foundation only recently announced its designation of a FOSS alternative to Skype as one of its high priority projects. At the time, a lot of people shrugged it off with a “Why? We already have Skype.” Well, those of us who wear seat belts already knew “why”, and those of you who ignored that announcement but are annoyed by this announcement are learning “why” the hard way. If you think this is bad, just way until Google/Facebook/Twitter makes some catastrophic change, like a price-hike, to one of your favorite services…I also think it’s funny that people aren’t really whining about the fact that Skype is sold as much as the fact that Microsoft is the purchaser. Microsoft isn’t the threat to anybody that it once was, and it is a eunuch compared to Google or Apple these days. I think it’s fine if you hate Microsoft, but at least be mature enough to use the hatred to mistrust of ALL tech companies. Otherwise, you’re like a person who finally escapes an abusive relationship, only to fall prey to yet another abused just because “anybody has to be better than that one”. Ironically, if Google or Apple would have been announced as the purchaser people would be peeing their pants with uncontrollable enthusiasm, and whereas it’s pretty clear Microsoft just wants our money at this point, Google and Apple seem to what control over our lives. While I appreciate the simple life, I think the view available to you when your head is stuck in a hole in the ground is a little too simple for my tastes.

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