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WSJ: Microsoft on the verge of paying $7 billion for Skype

Posted: , by Alan F.

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WSJ: Microsoft on the verge of paying $7 billion for Skype
Steve Ballmer's appearance at BlackBerry World in Orlando had people thinking about a Microsoft-RIM hookup as we reported. But Tuesday's WSJ is reporting that Microsoft has its sights set on another business-internet phone services company Skype. The paper says that a deal could be announced as soon as today and would cost the Redmond based firm from $7 billion to as much as $8.5 billion to become the largest acquisition in company history. So far, neither firm will comment on the story.

Skype connects millions of users on the internet through phone calls and through video chat. The company was founded in 2003 by Niklas Zennstrom and Janus Friis, the two men who created Kazaa, a file sharing service that allowed users to swap music back and forth for free. Skype was purchased in 2005 by eBay for $2.5 billion in cash and stock as the online auction company hoped that both parties to a transaction would use the free or low priced calls available on Skype to talk about transactions on eBay. When that failed, eBay sold the service in 2009. 70% of Skype went to tech investors Silver Lake Partners, venture capital firms Index Ventures and Andreessen Horowitz, and the Canada Pension Plan Investment Board, all of whom will score a huge profit if Microsoft indeed makes this purchase.

source: WSJ

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posted on 09 May 2011, 23:44 1

1. JeffdaBeat (unregistered)

It'd be a good purchase, absolutely. But I just feel like Microsoft has its hand in too many different types of buckets...how many projects can the company focus on?

posted on 10 May 2011, 00:09 2

3. Lucas777 (Posts: 2137; Member since: 06 Jan 2011)

microsoft has always had a large amount of projects going at one time... they reduce risk and can internconnect all their products to create an ecosystem.. if they get skype they will have another huge link between all their products

posted on 10 May 2011, 00:52

4. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

"how many projects can the company focus on?"

Yeah, I was thinking about that as well. How does a Skype acquisition do something for MS that they couldn't do generically? Does a Skype acquisition get MS a customer base of new WP7 handset buyers? Incremental Windows license sales? Or????

posted on 10 May 2011, 05:48

9. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

I thought about this some more - if the deal goes down (and it appears it will), expect MS to move to limit Skype functionality to WP7 handsets only. Say bye-bye to using Skype on other non-WP7 handsets....

I wonder how many of the current Skype users will be willing to make the move to WP7?

posted on 09 May 2011, 23:56

2. JaimeCarlos (Posts: 25; Member since: 17 Feb 2011)

Microsoft is one of the biggest industry leaders and the world's largest software company, so its strategy, now that the mobile market is in bet, should be a more aggressive one... What are the factors that would make Microsoft more successful than ever? A series of rapid and strategic acquisitions of important mobile focused enterprises...

UPDATE: Confirmed: Microsoft Will Announce Acquisition of Skype Tomorrow Morning
http://kara.allthingsd.com/20110509/microsoft-will -announce-acquistion-of-skype-tomorrow-morning/

Nokia + Microsoft + Skype seems like a good team. We'll see.

posted on 10 May 2011, 01:52 1

5. clevername (Posts: 1436; Member since: 11 Jul 2008)

Now this is an interesting purchase. Definitely a bonus for the consumer. I can see Skype chats through kinect on xbox(for gold only of course), and Skype being as fully integrated as Facebook is on wp7. and if mango isn't due til fall theN There may be time to integrate it into mango. Then Again that may be wishful thinking. Odd cuz I'm not even a big Skype user. =D

posted on 10 May 2011, 04:20 1

7. chewie (unregistered)

even though skype may prove its self to be a usefull app in the future , i think this is more about stopping the competition who has made some pretty good buying decisions in the past. google wont allow ms to build a first party youtube app for windows phone 7 wich leads to lawsuits between the two, i could imagin that the same would happen with skype if google was to get there hands on it. sinds microsoft has missed alot of great opportunities in the past , its good to see that they are finally waking up .windows phone 7 to me proves that they are no longer sitting back while the competition takes over. and i got a feeling windows 8 OS wil encourage that statement.

posted on 10 May 2011, 04:47

8. IOS5 (unregistered)

Microsoft + RIM + Skype + Nokia and the next iPhone\ iPad the default web browser it's Bing! Microsoft growing bigger and bigger.

posted on 10 May 2011, 07:09

12. protozeloz (Posts: 5396; Member since: 16 Sep 2010)

ohh gawd... one of my favorite service may become limited to windows mobile :( I so no what this to happen, lucky veer(hope i got it right) and Google talk are giving voice features for android

posted on 10 May 2011, 08:24

13. kpoguido (Posts: 2; Member since: 02 Nov 2009)

No!! Now Skype is only for windows. Mac and Linux would leave out. Goodbye Skype

posted on 10 May 2011, 08:55

15. protozeloz (Posts: 5396; Member since: 16 Sep 2010)

welcome Google VOIP?

posted on 10 May 2011, 08:43

14. jbash (Posts: 345; Member since: 07 Feb 2011)

they would make it universally available on pc not on the mobile market imho

posted on 04 Jun 2011, 01:06

16. rick collinsworth (unregistered)

this is a huge investment, but the opportunity in the business phone service market is pretty significant. if this can also help increase buy0in for products like lync or office 365, there could be some worthwhile synergy.

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