Microsoft makes its largest acquisition ever by purchasing Skype for $8.5 billion

Skype CEO Tony Bates will be named as the president of the software company’s Skype division
The logos of Microsoft and Skype are pictured on a computer screen in Schwerin, Germany, 10 May 2011. According to newspaper coverage, Microsoft is about to buy online phone provider Skype. Photo: Jens Buettner

Microsoft Corp. intends to purchase Internet video conferencing service Skype for $8.5 billion, bringing the software giant roughly 600 million users.

The deal surpasses Microsoft’s $6.0 billion purchase of advertising company aQuantive in 2007 as the most expensive acquisition in their history.

“Skype is a phenomenal service that is loved by millions of people around the world,” Microsoft’s chief executive officer, Steve Ballmer, said in a statement released Tuesday morning, according to The Sydney Morning Herald.

“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.”

Both companies announced that current Skype CEO Tony Bates will be named as the president of a new business division within Microsoft, Al Jazeera reports.

The monumental deal is expected to provide Microsoft with momentum in the ever-competitive smartphone market. Not only do both sides hope to bring software innovation to consumers, but they also intend to extend Skype’s global community and enhance one of the most popular communications platforms in the world.

Microsoft reportedly aims to become a more sizable presence in an online field largely controlled by Google and Facebook. Analysts believe Microsoft’s $8.5 billion acquisition of Skype was a defensive strategy to prevent competitors from making a similar blockbuster purchase.


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