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Microsoft in talks to buy Skype, report says

Discussion in 'Technology Advice' started by Micawber, May 10, 2011.

  1. Micawber
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    Micawber Renowned Lifetime Member

    Microsoft is in talks to buy internet phone service Skype, the Wall Street Journal has reported.

    According to the paper, the deal could be worth as much as $8.5bn (£5.2bn), which would make it Microsoft's largest acquisition.

    Both Microsoft and Skype have declined to comment on the story.

    Luxembourg-based Skype has 663 million global users. In August last year it announced plans for a share flotation, but this was subsequently put on hold.

    Internet auction house eBay bought Skype for $2.6bn in 2006, before selling 70% of it in 2009 for $2bn.

    Skype is now majority-owned by a group of investors, led by private equity firms Silver Lake and Andreessen Horowitz

    Source:-
    http://www.bbc.co.uk/news/business-13343600
  2. oss
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    oss Somewhere Staff Member

    This could be a terrible idea :(
  3. KeithAngel
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    KeithAngel 2063 Lifetime Member

    agreed bugger the monster wants to gobble us up and no dougbt go down our pockets i spend $0-60 quid a year with skype for texts and calls to phones but its the free service thats pretty awesome I was going to buy a number but i may wait and see how this pans out
  4. oss
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    oss Somewhere Staff Member

    I spend upwards of 100 quid a year on Skype texts :(

    Some people think it is a good fit but the problem is that Microsoft does not have a good history with companies that it has taken over.

    There are also rumours that they want to buy Flickr from yahoo which would be an absolute disaster :(
  5. oss
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    oss Somewhere Staff Member

    Damn it looks like the sale is going through :(

    And that's coming from a Microsoft Partner who attained Microsoft Certified Partner status for the business last year, I'm also an MSDN subscriber, I love their tools but they have screwed up so many companies that they've bought in the past, thay have a habit of losing interest after a while :(
  6. Micawber
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    Micawber Renowned Lifetime Member

    Microsoft confirms takeover of Skype

    Microsoft has confirmed that it has agreed to buy internet phone service Skype.

    The deal will see Microsoft pay $8.5bn (£5.2bn) for Skype, making it Microsoft's largest acquisition.

    Luxembourg-based Skype has 663 million global users. In August last year it announced plans for a share flotation, but this was subsequently put on hold.

    Internet auction house eBay bought Skype for $2.6bn in 2006, before selling 70% of it in 2009 for $2bn.

    This majority stake was bought by a group of investors led by private equity firms Silver Lake and Andreessen Horowit.

    Other major shareholders include tech-firm Joltid and the Canada Pension Plan Investment Board.

    Shares in Microsoft were down 1.3% at $25.50 in early trading in New York.

    'Defensive move'

    Microsoft chief executive Steve Ballmer said: "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 will now become a new division within Microsoft, and Skype chief executive Tony Bates will continue to lead the business, reporting directly to Mr Ballmer.

    "It's a strategic asset and a defensive move [for Microsoft]," said Colin Gillis, an analyst at BGC Financial.

    "If they can put it on Windows 8, it gives them an advantage. It helps them in the tablet market."

    Other analysts say Microsoft's aim in buying Skype is to improve its video conferencing services.

    Price concerns

    Although the price tag of $8.5bn will not stretch the US giant, some experts have questioned whether it is paying too much for a company that has struggled to turn a profit.

    Michael Clendenin, managing director of consulting firm RedTech Advisors, said: "If you consider [Skype] was just valued at about $2.5bn 18 months ago when a chunk was sold off, then $8.5bn seems generous.

    "[It] means Microsoft has a high wall to climb to prove to investors that Skype is a necessary linchpin for the company's online and mobile strategy."

    This view was echoed by Ben Woods, head of research group CCS Insight.

    "The big unanswered question is how do Skype assets work for Microsoft... how do you justify the price?" he said.

    Skype was founded in 2003.

    Calls to other Skype users are free, while the company charges for those made to both traditional landline phones and mobiles

    Source:-
    http://www.bbc.co.uk/news/business-13343600
  7. Micawber
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    Micawber Renowned Lifetime Member

    Microsoft's Bill Gates says he advocated Skype takeover

    Microsoft's founder, Bill Gates, has said he advocated the company's takeover of Skype, and urged other board members to support the move.

    Last week Microsoft agreed to pay $8.5bn (£5.2bn) for the loss-making internet phone service.

    "I was a strong proponent at the board level for the deal being done," Mr Gates, Microsoft's chairman told the BBC's Hardtalk programme.

    The multi-billion dollar deal is Microsoft's largest ever acquisition.

    "I think it's a great, great deal for Skype. I think it's a great deal for Microsoft," he added.

    Skype enables its users to contact each other over the internet for free, while charging for calls made to both traditional landline phones and mobiles.

    The Luxembourg-based company, which has 663 million users worldwide has however struggled to make a profit.

    But in the interview with the BBC's Stephen Sackur, Mr Gates said the decision to buy Skype was strategic.

    "The idea of video conferencing is going to get so much better than it is today. Skype actually does get a fair bit of revenue," said Mr Gates.

    "It'll be fascinating to see how the brilliant ideas out of Microsoft research, coming together with Skype, what they can make of that."

    Source:-
    http://www.bbc.co.uk/news/business-13434352
  8. Aromulus
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    Aromulus The Don Staff Member

    I hope they don't try to change it, or start charging for the use....
  9. KeithAngel
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    KeithAngel 2063 Lifetime Member

    Microsoft are clearly paying way over the odds still as they are ultuists should cost us any more :erm:
  10. oss
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    oss Somewhere Staff Member

    Well they recently radically changed LiveSync into Window LiveMesh removed many features and put out an inferior product to what they had before, they also made a right mess of the Messenger interface to the point that I won't even have it on my PC now.

    They are talking about very close integration into Windows but this will probably be met with monopoly investigations again and it may well fit well with the new Windows Phone operating system, certainly gives them a big plus in that direction if they get it right, but I am not confident that they will get it right they have a poor track record on this kind of stuff :(

    As I've said before I make my living out of Microsoft tools, I write applications pretty much specifically for the Windows platform in all it's shapes but I am under no illusion that all their products or development plans are great, they aren't.

    Skype was originally written in Object Pascal (Borland Delphi) that was one of the reasons it was a very simple to install and maintain product, it was just a single executable for a long time, dead easy to install. Microsoft will probably rewrite it into C++ or one of the .Net languages (C# probably) that might be for the good or it might not, but now we are just doomed to have to wait and see what they do with it, doubt anything major will change overnight though, it's not just a few lines of code, it is a big business.

    Last thing Gates is no fool and must see a real use for it inside Microsoft and there is the defensive purchase argument to keep it out of the hands of Google and the other giants.
  11. Micawber
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    Micawber Renowned Lifetime Member

    Absolutely spot on there oss.
  12. Kuya
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    Kuya The Geeky One Staff Member

    I am waiting for Google to bring out their own version and release it on their Android platform!
  13. oss
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    oss Somewhere Staff Member

  14. Kuya
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    Kuya The Geeky One Staff Member

    Yeah, but I expect Microsoft to be pushing their skype on their own phones with better features than the iphone and android version
  15. oss
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    oss Somewhere Staff Member

    See that's the problem, apart from integrating Skype what else can they really do to it, it's pretty good on the iPhone just now and I suppose the Android version is pretty good too.

    The features it provides are great, it lacked for a while multi user video conferencing but it's even got that now I think (more than 2 video users at a time)

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