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Microsoft digs into its deep pockets to snatch up Skype

The Wall Street Journal reported earlier tonight that Microsoft was in talks to purchase VoIP company Skype for between $7 billion and $8 billion. Kara Swisher just recently confirmed the acquisition in her BoomTown column, starting that the deal is worth an estimated $8.5 billion. 

Earlier reports stated that Google and Facebook were duking it out to get a piece of Skype, but in the end Steve Ballmer and Microsoft's huge chest of cash put an end to those discussions. The earlier reports also pointed to a Skype valuation of $3 to $4 billion, so Microsoft's $8.5 billion purchase price hopefully will bring a hefty ROI.

For those keeping score, eBay bought Skype in 2005 for $2.5 billion. Four years later, eBay sold a 65% stake in the company for $1.9 billion.

The first beta of Skype was introduced in 2003, and as of December 2010, it had over 663 million registered users. The average number of monthly connected users is much lower, however, at 145 million. And when it comes to users that actually pay for the service, the numbers drop down to just 8.8 million. 

Registered users can make Skype-to-Skype calls and one-to-one video calls for free. Users can make Skype-to-phone calls at a rate of 2.3 cents/minute. Skype also offers subscription plans at a rate of 1.2 cents/minute. 

We'll have to wait a few more hours until we get all the juicy details on Microsoft's latest acquisition, but we're betting that the boys from Redmond plan on tightly integrating Skype with Windows Phone 7 to better compete with Google Voice.

Updated 5/11/2011 @ 8:34am

Well, the news is now official. Microsoft just announced that it is acquiring Skype for $8.5 billion in cash. Microsoft says that Skype will bolster its "existing portfolio of real-time communications products and services."

As expected, Skype will be tightly integrated into the Xbox 360 and Windows Phone 7 platform. Microsoft is also creating a new business division called the Microsoft Skype Division, which will be headed by Skype CEO Tony Bates (he will report directly to Microsoft CEO Steve Ballmer).

“Skype is a phenomenal service that is loved by millions of people around the world,” said 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.”

“Microsoft and Skype share the vision of bringing software innovation and products to our customers,” said Bates. “Together, we will be able to accelerate Skype's plans to extend our global community and introduce new ways for everyone to communicate and collaborate.”

You can read the full press release here.



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RE: So...
By MrBlastman on 5/10/2011 2:24:26 PM , Rating: 1
From an IT buddy of mine--according to him, Livemeeting is terrible and no way has ever achieved the smoothness and clarity that Skype provides. But, I have no idea, I've never messed with it.


RE: So...
By Smilin on 5/10/2011 5:48:10 PM , Rating: 1
Depending on what he's doing he may be correct. I myself wouldn't use Livemeeting to simply make a video call. It's a bit heavy for such a simple task.

Livemeeting (the service, not the on-premises) doesn't use high definition video and it is also burning a lot more CPU and bandwidth for whiteboarding, app sharing, participant lists and such. It was a service built before Skype was even a company and is nearing the end of it's support lifecycle.

OCS 2007 R2, the predecessor to Lync began offering HD video before Skype. Lync does it p2p and in conferences of up to 250 with active speaker switching video and multiplexed audio and uses a far more efficient codec.

Office365 will include the newer Lync Online (which you can buy now on-premise...cloud is still beta).

In the consumer space, Live Messenger is on par with Skype for AV quality. If there are differences in the experience it's more likely an endpoint issue (CPU, Mic used, network jitter, etc).


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