Microsoft to buy Skype for $8.5 billion
Redmond, WA, United States (AHN) – Microsoft has agreed to buy Internet phone service provider Skype in a deal worth $8.5 billion in cash.
The announcement on Tuesday gives Microsoft access to the market for real-time video and voice communications.
According to a statement released by both companies, the software maker plans to use Skype to support such products as the Xbox gaming system and Windows Phone.
In 2010, Skype had 170 million connected users who logged over 207 billion minutes of voice and video conversations. Financial details from the company include a reported a $6.9 million net loss in 2010 on nearly $860 million in revenue. Additionally it reported $686 million in long-term debt, and just over $1 billion in liabilities.
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 Microsoft CEO Steve Ballmer.
“Microsoft and Skype share the vision of bringing software innovation and products to our customers,” said Tony 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,” Bates said.
Founded in 2003, Skype was acquired by eBay in September 2005, and then acquired by an investment group led by Silver Lake in November 2009.
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