Microsoft Buys Video & Messaging Company, Skype, For $8.5 Billion

Microsoft Buys Video & Messaging Company, Skype, For $8.5 Billion

Seemingly out of nowhere, Microsoft has acquired Skype for $8.5 Billion, according to the Wall Street Journal. There were rumors last night of the deal, and that was the first I'd heard of this possible deal. Now, half a day later, it's official. The move is seen as an attempt by Microsoft to remain competitive with rivals Apple and Google, both of whom have major communications pieces integrated into their services--Facetime for Apple, and Google Voice for Google. 

Some sources suggest Microsoft was bidding against Google to take over Skype, and that they may have paid an ultimate price as much as twice what Google was offering. Facebook, apparently, was not a player in the bidding wars.

Early reports are that Skype will be a standalone division within Microsoft, with Skype's Tony Bates reporting directly to Steve Ballmer. The service will likely be integrated across a variety of Microsoft products, including Xbox Live, Bing, and Windows mobile.

Microsoft Buys Video & Messaging Company, Skype, For $8.5 Billion

Because of Microsoft's heavy investment in Facebook, it's expected that the social network will also be able to take advantage of Skype's unique abilities, which would obviously open the service up to a huge number of new customers.

Skype currently has 170 million monthly customers, but they'll have a lot more than that now. Here's Microsoft's Steve Ballmer on the deal:

"Skype is a phenomenal service that is loved by millions of people around the world. 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 was launched in 2003 and has had its ups and downs in the ensuing years--including being acquired and then dumped by Ebay in 2006--before beginning a nice pattern of growth in 2009. It will be some time before we can truly assess the true impact this acquisition will have on either company. But this is huge news. And the deal merely underscores how important video communication--in particular, live video--is to the future of web-based services.

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About the Author -
Jeremy Scott is the founder of The Viral Orchard, an Internet marketing firm offering content writing and development services, viral marketing consulting, and SEO services. Jeremy writes constantly, loves online video, and enjoys helping small businesses succeed in any way he can. View All Posts By -

What do you think? ▼
  • Ronnie Bincer

    I truly hope that Microsoft leaves Skype alone... only time will tell though.

  • Erik Auberg

    I already refuse to use MSN because it's owned by Microsoft and now they own Skype, this is truely a sad day.

  • Chris Burel

    I fear for Skype for Linux...

  • Mason Reno

    This is pretty cool news! Would have been more interesting if Facebook bought Skype instead.

    • JeremyScott

      Yeah, but if they can get some Skype benefits without putting out the cash, by virtue of their Microsoft relationship, then they don't need to buy it.