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You are here: Home / World Wide Web / Microsoft Completes Skype Purchase
Microsoft Completes Skype Purchase
Microsoft Completes Skype Purchase
By Barry Levine / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
OCTOBER
14
2011
Microsoft and Skype are now one company. The Redmond, Washington-based technology giant completed its acquisition Friday of the once-upstart, Internet-based communications company.

In a posting on The Official Microsoft Blog, Tony Bates, the former Skype CEO who is now head of the new Skype division, said the deal-closing "represents a huge leap forward in Skype's mission to be the communications choice for a billion people every day."

'To Transform Communications'

Bates said Skype's position would be at "the intersection of social, mobile and video communications." He added that the company's goal was "to transform communications," which meshes with Microsoft's goal of creating "communication across every device and every platform."

In a video message, Bates said both Skype and Microsoft are "disruptive, innovative, software-oriented companies." The envisioned world, he said, is one of "complete, pervasive video communications, something that's across all parts of your life."

In May, Microsoft said it intended to buy Skype for $8.5 billion. Last week, Microsoft cleared its last major regulatory hurdle when the European Commission approved the purchase.

In a statement, commission official Joaquin Almunia said the "deal would not significantly impede effective competition in the European Economic Area."

One of the questions had been whether Microsoft would hinder Skype's interoperability with other companies, or if it would integrate Skype with its widespread Windows operating system, creating market advantages others could not match.

'A Big Deal'

On the first matter, the commission found that Microsoft would have no incentive to diminish Skype's interoperability, since it's to the advantage of the Skype brand that it be available via as many partners and platforms as possible.

Concerning whether Microsoft could integrate Skype with Windows, as it had been accused of doing with its Internet Explorer browser, the commission reasoned that most users could readily download a version of Skype if they wanted, and that most users who buy a PC with Skype installed were already registered Skype users.

Brad Shimmin of Current Analysis described the Skype acquisition as "a big deal for Microsoft." The purchase, he said, will allow the company to offer "more complete communications and collaboration packages, not just for consumers, but for midmarket businesses." For large businesses, he said, Microsoft will probably continue to offer video conferencing through its partnership with Polycom.

Video is a growing part of communications, and of Skype. According to statistics released recently by Microsoft, about 42 percent of all Skype-to-Skype minutes were video calls, and there were 1.8 billion hours of Skype video calls made in the year ending in August.

Skype was founded in 2003 by Niklas Zennstrom and Janus Friis, and it has about 124 million registered users. It is the largest Internet communications company, but has had difficulty being profitable. eBay bought the company in 2005 for an estimated $2.6 billion, but then sold it to an investor group last fall for an estimated $2 billion.

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