Microsoft Pockets Skype for $8.5 Billion

May 10, 2011, By Sanjeev Ramachandran

It wasn’t long back that we had heard that Facebook was closing in on a deal to buy out Skype. The industry is now abuzz with news of a deal  between Microsoft and Skype! Microsoft has announced that they have sealed the deal to acquire Skype for $8.5bn in cash. The agreement has been approved by the boards of directors of both Microsoft and Skype.

The deal being talked about also means that Microsoft would acquire an extra half billion of Skype debt.   The software giant could be looking to take Skype beyond the upcoming Windows Phone 7 app and merge it into the mobile OS itself. Doesn’t that sound like a Google Voice clone is in the making?

The deal, for which Goldman Sachs and JPMorgan Chase have given financial advice, would mean that Microsoft  pockets a recognized brand name on the Internet. However, thinking deep into the whole stuff, it could also bring to the fore the possibilities of resistance from within the cell phone industry.

This would be because iOS has already adopted Skype as an app for VoIP. Besides that, Verizon was looking at banking on Skype for video chat on its 4G Android phones. There are also other carriers who see Skype as an option for VoIP. These players could raise a hurdle in front of the deal, don’t you think so?

All said, if at all the deal comes through, this would be Microsoft’s biggest acquisition. With the Internet being seen by Microsoft boss Steve Ballmer as a major play area for the future, the deal could be pursued vigorously. On the other side, Skype might also see this move as a zenith in their growth graph. The  deal could also help Microsoft in their bid to make it big in the mobile phone market, and thereby take on rivals Apple and Google.

Would you think of endorsing the deal considering that the union of the two companies would bring to you some advantages? Tell us more about it.

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