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Microsoft buys Skype for £5.2 billion

Microsoft buys Skype for £5.2 billion

Skype has had a torrid history, changing hands a number of times for big money.

In a somewhat surprising move, Microsoft has confirmed that it's in the process of buying VOIP service Skype for the princely sum of $8.5 billion (£5.2 billion).

Skype had previously been sold to eBay for $2.6 billion back in 2006, before eBay sold 70 per cent of its stake to private investors for $2 billion in 2009.

Rumours had circulated about Skype re-listing itself on the stock market, but Microsoft has swooped in, paying what many industry analysts see as over the odds for the VOIP company. Skype, despite its user base of over 600 million, was only able to turn a profit of $20.6 million in 2010.

Whether this acquisition means that Skype will be rolled into Microsoft's existing Live Essentials portfolio is unclear. However, Microsoft CEO Steve Ballmer told the BBC that 'if you use Skype today, you're going to be able to continue to use Skype,' indicating that the Skype brand will continue to exist, rather than being exclusively integrated into Windows Live Messenger.

Are you a heavy Skype user who's worried about Microsoft's impact? Do you think Microsoft should roll Skype into its Live Essentials portfolio? Let us know in the forums.

31 Comments

Discuss in the forums Reply
DXR_13KE 11th May 2011, 11:40 Quote
I fear the reverse Midas touch...
Phalanx 11th May 2011, 11:41 Quote
Reverse? Skype are already a loss-making company.
Snips 11th May 2011, 11:41 Quote
I'm not really sure how this will effect current Skype users. The plus for Microsoft is that it now owns a Live messenger alternative so I imagine some merge in products in the future.

Don't see it as bad for Skype since for all their customer base, the profits haven't really been that impressive.
perplekks45 11th May 2011, 11:54 Quote
For Skype that's amazing. Well, for the people running Skype, at least. They made a boatload of money for a company that's practically just about getting even year after year.

MS will try to integrate Skype into everything now, I guess. From Live Messenger to Kinect, possibly even WP7. Could be interesting to see how they do it.
Jaybles 11th May 2011, 12:06 Quote
Quote:
Originally Posted by Ph4lanx
Skype are already a loss-making company.

"able to turn a profit of $20.6 million in 2010."

Have i missed something here?
ch424 11th May 2011, 12:12 Quote
So, Skype has:
- Ugly, inconsistent and confusing UI on Windows
- Proprietary protocol that locks out competitors
- Aggressive installation process that installs browser plugins you don't want
- Terrible mobile phone software
- Weird port hijacking problems

Let's hope Microsoft can fix all that for them..
thom804 11th May 2011, 12:13 Quote
Quote:
Originally Posted by Jaybles
Quote:
Originally Posted by Ph4lanx
Skype are already a loss-making company.

"able to turn a profit of $20.6 million in 2010."

Have i missed something here?

Exactly what I was thinking. Do some people not read the article and just comment on the headline or what?
Kamikaze-X 11th May 2011, 12:32 Quote
Quote:
Originally Posted by ch424
So, Skype has:
- Ugly, inconsistent and confusing UI on Windows
- Proprietary protocol that locks out competitors
- Aggressive installation process that installs browser plugins you don't want
- Terrible mobile phone software
- Weird port hijacking problems

Let's hope Microsoft can fix all that for them..

why would they fix them when they can just 'integrate' them all into other products?

as previously suggested, Kinect WILL get skype support- if it didn't, MS deserve to lose money, and WP7 will get this- easy way for MS to crowbar an equivalent to FaceTime and GoogleTalk Video into their portfolio.
Fizzban 11th May 2011, 12:38 Quote
So Live Messenger will now probably come with Skype built in? I don't have a problem with that.
enciem 11th May 2011, 12:45 Quote
Microsoft CEO Steve Ballmer told the BBC that 'if you use Skype today, you're going to be able to continue to use Skype...

...for a price
kosch 11th May 2011, 12:50 Quote
Probably part of their strategy for windows mobile I should imagine.
liratheal 11th May 2011, 12:58 Quote
Fix the memory leaks and I don't care who owns it.
Blademrk 11th May 2011, 13:20 Quote
did read somewhere that it was going to be intergrated with Kinect.
Er-El 11th May 2011, 14:04 Quote
Bye-bye free Skype calls!

Oh well. The sooner they do that, then the sooner SIP clients can take over.
Th3Maverick 11th May 2011, 14:14 Quote
Sweet! I was thinking to myself last night that I would LOVE Skype over Kinect as an alternative to the stupid (and relatively useless) Kinect Chat application. Also, I'm kind of glad that Google now has a bit of competition to their all-in-one Google service suite, though it seems M$ is always a day late.

Finally, +1 to ch424's post. Skype's UI is what caused me to switch to Google Video Chat. If I brought that to a customer at an end-of-sprint demo, I'd be fired.
FelixTech 11th May 2011, 14:18 Quote
If we do the maths, we see that MS just paid over 400 years worth of Skype's profits. There must be some pretty tasty patents/technology in there!
Lazy_Amp 11th May 2011, 14:32 Quote
I heard that this buyout is somewhat of a stick to Google, who was considering buying Skype themselves.
PhenomRed 11th May 2011, 16:39 Quote
I hope they don't merge it into Windows Live, myself and my girlfriend use Skype for webcam, because Windows Live sucks and the cam freezes for no reason
delriogw 11th May 2011, 16:40 Quote
ok this isn't me being pedantic, i'm genuinely interested

at one point i'm certain the US billion was one hundred thousand million, whereas the UK billion was one million million.

is this still the case or have they been equalised?

if they haven't been then surely it's much less that £5.2 billion as that would be the UK use of the word billion.

i'm confuzzled
perplekks45 11th May 2011, 16:51 Quote
1 billion = 1,000,000,000

In the US & the UK.
thehippoz 11th May 2011, 17:11 Quote
yeah it's 1000 x a million.. like a million is 1000 x a thousand

thousand is 1000 x 1.. ect.. easier way to look at it.. I dunno who comes up with these terms.. now days peeps need spell check to even spell anything

imagine how much trouble we'd be in 20 years asking someone to add something up without a calculator! :D

that would be pretty nice to have skype integrated into windows
somidiot 11th May 2011, 17:24 Quote
Quote:
Originally Posted by delriogw
ok this isn't me being pedantic, i'm genuinely interested

at one point i'm certain the US billion was one hundred thousand million, whereas the UK billion was one million million.

is this still the case or have they been equalised?

if they haven't been then surely it's much less that £5.2 billion as that would be the UK use of the word billion.

i'm confuzzled

You might be confused about the exchange rate according to the latest I could dig up 1 US dollar = 0.6066 British pounds sterling.
FelixTech 11th May 2011, 17:53 Quote
Quote:
Originally Posted by thehippoz
yeah it's 1000 x a million.. like a million is 1000 x a thousand

thousand is 1000 x 1.. ect.. easier way to look at it.. I dunno who comes up with these terms.. now days peeps need spell check to even spell anything

Actually I think you'll find the British way is much simpler: a million is a thousand times a thousand, a billion is a million times a million. Although I think in most areas the US billion is now widely accepted as standard. Why don't we just call them GigaDollars and leave it at that? :)
delriogw 11th May 2011, 18:04 Quote
Quote:
Originally Posted by FelixTech
Actually I think you'll find the British way is much simpler: a million is a thousand times a thousand, a billion is a million times a million. Although I think in most areas the US billion is now widely accepted as standard. Why don't we just call them GigaDollars and leave it at that? :)

it's also much harder to be a billionaire with the british way probably why most favour the US system hehe

thanks for all the responses guys :) from now on i will assume a billion is the US way unless otherwise specified - i figured it would but but on a british site you just never know. though not everyone's memory and brain is as damned weird as mine of course :)
<A88> 11th May 2011, 18:11 Quote
Quote:
Originally Posted by FelixTech
Actually I think you'll find the British way is much simpler: a million is a thousand times a thousand, a billion is a million times a million. Although I think in most areas the US billion is now widely accepted as standard. Why don't we just call them GigaDollars and leave it at that? :)

Actually the 'US' way has been the standard in this country for quite some time now, probably decades.
Dr. Strangelove 11th May 2011, 19:56 Quote
Goodbye skype for android???
Er-El 11th May 2011, 20:54 Quote
Yep, a billion = 10^9 has been the standard here for ages now. It's more consistent that way if the index increases by 3 i.e. thousand = 10^3, million = 10^6, billion = 10^9
Sloth 11th May 2011, 21:11 Quote
As long as they keep PC to PC calls free I'm happy.

Just scared to see if this ever gets anywhere near GFWL.
Quote:
Originally Posted by ch424
- Aggressive installation process that installs browser plugins you don't want
You mean the little check box that you just uncheck? Those are pretty common. :?
wiby645 12th May 2011, 01:56 Quote
i wonder if microsoft knew that they could download it for free
fodder 12th May 2011, 08:20 Quote
Sorry, re: the billion thing.

I am sure the American 'billion' was only 100K, but the British billion was correct according to the decimal system, 1,000K. I seem to remember as a kid (quite some time ago....) getting a little confused that £1 was $1.50 but $1billion was only £100million.
llOriginll 12th May 2011, 16:33 Quote
Skype + .net = Skynet.

FUUUUUUUUUUUUU-
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