Microsoft Buys Skype For $8.5 Billion in Cash

May 10, 2011  •  Post A Comment

" Microsoft Corp. (Nasdaq: MSFT) and Skype Global S.à.r.l. today announced that they have entered into a definitive agreement under which Microsoft will acquire Skype, the leading Internet communications company, for $8.5 billion in cash from the investor group led by Silver Lake," Skype and Microsoft have announced.

The announcement continues, "The agreement has been approved by the boards of directors of both Microsoft and Skype," adding, "With 170 million connected users and over 207 billion minutes of voice and video conversations in 2010, Skype has been a pioneer in creating rich, meaningful connections among friends, families and business colleagues globally."

The release also says, "Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms. ‘Skype is a phenomenal service that is loved by millions of people around the world,’ said Microsoft CEO Steve 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.’

"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 Ballmer."

According to a CNN story about the deal, "Luxembourg-based Skype began life as a VC-backed company, before being acquired by eBay (EBAY) for $2.6 billion in 2005. The combination didn’t quite work out, and eBay gave public thought to either selling the unit outright or spinning it off into an independent public company. In November 2009, it agreed to sell a 65% stake in Skype for $1.9 billion to an investor group that included Silver Lake Partners, Andreessen Horowitz, Canada Pension Plan Investment Board and Index Ventures (the 7th-largest leveraged buyout of 2009).

"Skype then filed for a $100 million IPO last August. The company reported a $6.9 million net loss in 2010, on nearly $860 million in revenue. It reported just $686 million in long-term debt, and just over $1 billion in liabilities."

One Comment

  1. Pity I’ll need to uninstall Skype now.
    My systems are blessedly Microsoft-free, and I won’t change that to keep Skype. 🙁

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