It's official: Microsoft to buy Skype

Confirming rumors that started hitting the Internet last Sunday, Microsoft has now officially announced its plans to acquire Skype, the Internet phone software company. This morning's press release announced that the price that Microsoft is paying for Skype will indeed be $8.5 billion in cash, as previously revealed on Monday night by the AllThingsDigital web site.

According to the press release, this major move by Microsoft "will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities." The deal will also "extend Skype’s world-class brand and the reach of its networked platform, while enhancing Microsoft’s existing portfolio of real-time communications products and services." The deal is still subject to government regulatory approvals but Microsoft hopes to close the deal sometime in 2011.

Microsoft plans to use Skype, which has 170 million registered users, for many of its products, saying in its press release, "Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities." Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms." The deal will turn Skype into its own division inside of Microsoft. Skype's current CEO Skype Tony Bates will be the  president of the new Microsoft Skype Division and will report directly to Microsoft CEO Steve Ballmer. Ballmer is quoted in the press release as saying, "“Tony Bates has a great track record as a leader and will strengthen the Microsoft management team. I’m looking forward to Skype’s talented global workforce bringing its insights, ideas and experience to Microsoft."

Rumors of a Skype acquisition started on Thursday when it was reported that the company was in talks with both Facebook and Google. However, Microsoft's name entered the fray on Sunday as a possible partner for Skype. This is one of the biggest acquisitions ever conducted by Microsoft.

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I wonder if the reason behind this purchase is so they'll add this as standard with Windows 8...? Would be nice though.

To be completely honest, Skype engineers were brilliant, but their front-end developers were a bunch of retards. Let's hope Microsoft puts even a pinch of more consideration of user feedback and common sense into their front-end design and development team for Skype.

Xtreme $niper said,
To be completely honest, Skype engineers were brilliant, but their front-end developers were a bunch of retards. Let's hope Microsoft puts even a pinch of more consideration of user feedback and common sense into their front-end design and development team for Skype.

I disagree. The interface is quite well laid out, considering how many different features they have and how many different platforms they support. I use it on my iPod touch and my netbook, and my wife uses it on her HTC Desire, and it works great on all of them.

roadwarrior said,

I disagree. The interface is quite well laid out, considering how many different features they have and how many different platforms they support. I use it on my iPod touch and my netbook, and my wife uses it on her HTC Desire, and it works great on all of them.

Did you ever see the new Skype GUI on Macs?

For the rest I agree.

GS:mac

$8.5billion in cash, was it worth it? I think so, I've never been online on Skype without seeing the users less than 23million at a single time, as I'm typing there is currently 27million users on, it's a massive service.

mixed feelings about this, for wp7 it would be amazing, but then microsoft could make wlm amazing for wp7 in the first place but they couldnt, In the last years microsoft suffered what ICQ suffered in the past, wlm it start bundling a lot of useless thing, it feels bloat and slower, making the client more restrictive (nickname limitation, cripped offline messaging) and a very dated protocol, and some features that ICQ still have like resume file transfer and wlm dont.

So in the end i have doubts of HOW microsoft would improve skype, and not screw it up. Microsoft could just keep things separated, but then mantaining 2 similar services its expensive. Ask AOL how they handled ICQ and AIM... AOL basically destroyed ICQ, started gimping it, and icq stopped to look like it and its more like aim (which its bad)....

eilegz said,
mixed feelings about this, for wp7 it would be amazing, but then microsoft could make wlm amazing for wp7 in the first place but they couldnt

Good news for you: the Mango update for WP7 will include native support for WLM into the platform and it is less than 6 months away.

Mango will probably to early, but you can expect the next version of Windows Phone to include native Skype support, including video calls with a front camera to compete with FaceTime.

Maybe they acquired it mainly for Windows Phone (the Messenger on WM6.5/WP was a joke, has no concept of true VoIP and conference calls). Wonder if the Microsoft Skype client/protocol on the desktop merge with WLM. Will it continue to be P2P-based or will it be rewritten for the client-server model based on Windows Live services backend?

sexypeperodri said,
Well this is certainly bad news.

I'm inclined to agree. Get ready for a re-branding exercise which will see what was formally known as Skype turn into "delightful" and "magical" editions such as:
"Microsoft Office Instant Video Messaging Client Professional Edition", "Microsoft Live Messenger with Instant Video Messaging" and "Microsoft Instant Video Messaging Standalone Personal Edition" -- urrgh!

Support for XP, Linux and Mac will drop or lay dormant at best. One can only hope that this technology will be gracefully integrated into Windows Live Messenger and WP7. It's likely to be added to the next version of Windows Live Essentials for sure.

CtrlShift said,

I'm inclined to agree. Get ready for a re-branding exercise which will see what was formally known as Skype turn into "delightful" and "magical" editions such as:
"Microsoft Office Instant Video Messaging Client Professional Edition", "Microsoft Live Messenger with Instant Video Messaging" and "Microsoft Instant Video Messaging Standalone Personal Edition" -- urrgh!

Support for XP, Linux and Mac will drop or lay dormant at best. One can only hope that this technology will be gracefully integrated into Windows Live Messenger and WP7. It's likely to be added to the next version of Windows Live Essentials for sure.

There are two possibilities for such a post:
1/ You are just trolling and shouldn't be posting
2/ You know they payed 8.5 BILLION for it's install base, technology and most important brand NAME, so why on earth would they rename it?
Support for Linux and Mac will continue, it's the power of the platform! Why would they shoot in their own foot and stop it?

No, they bought it to get foot in the internet communications world and to integrate it with Xbox, Windows Phone 7 and their professional communications service called "Lync", which is incredibly good.

Robbeke said,
Support for Linux and Mac will continue, it's the power of the platform! Why would they shoot in their own foot and stop it?
"continue", as in, to release a bunch of updates for Windows but just one update for Mac/Linux.

XP1 said,
"continue", as in, to release a bunch of updates for Windows but just one update for Mac/Linux.

duh? i dont see linux torvalds releasing GIT client to windows users, or other Linux software written by him and his buddies... they wait till someone else does it.

and mac software on windows except itunes? LULZ nowhere, not from Apple that is.

yet bitch and moan while of all 3, Microsoft gives the most support to products that arent theirs.

Shadowzz said,
duh? i dont see linux torvalds releasing GIT client to windows users, or other Linux software written by him and his buddies... they wait till someone else does it.

and mac software on windows except itunes? LULZ nowhere, not from Apple that is.

... except none of those are already multiplatform for Windows/Mac/Linux. If they were, but updates only released to a specific platform (special treatment), then they deserve the same level of criticism that Skype updates Windows client more frequently than the Linux client.

What you were talking about is a different argument, but it would be nice that those programs you mentioned were multiplatform, though.

Edited by XP1, May 10 2011, 6:02pm :

Shadowzz said,
and mac software on windows except itunes? LULZ nowhere, not from Apple that is.

yet bitch and moan while of all 3, Microsoft gives the most support to products that arent theirs.


Windows Media Player for OS X (dead)
Internet Explorer for OS X (dead)
Microsoft Office for OS X (still alive, but lacking many features of the Windows version)
Messenger for OS X (still alive, but so far behind the OS X version that it isn't even in the same league)
Remote Desktop Client for OS X (finally got an update recently, but still seems to still lack many features of the Windows version)

Compared with:
Safari for Windows (version parity with OS X)
iTunes for Windows (version parity with OS X)
QuickTime for Windows (one version behind the OS X version, but still quite useable)


At least the software that Apple releases for Windows is (for the most part) equivalent to what they release on OS X.

CtrlShift said,
Support for Linux and Mac will drop or lay dormant at best.

Microsoft is going to continue updating all versions for other OSes, so no need to worry.

Robbeke said,

There are two possibilities for such a post:
1/ You are just trolling and shouldn't be posting
2/ You know they payed 8.5 BILLION for it's install base, technology and most important brand NAME, so why on earth would they rename it?
Support for Linux and Mac will continue, it's the power of the platform! Why would they shoot in their own foot and stop it?

No, they bought it to get foot in the internet communications world and to integrate it with Xbox, Windows Phone 7 and their professional communications service called "Lync", which is incredibly good.

Not trying to troll, it's my genuine opinion that the Skype brand will be replaced or buried by Microsoft's "visionary" marketing beast that turns even good products/ideas into bland corporate statements.

SHADOW-XIII said,
rip skype ... somehow chance of Skype getting support on devices/systems other than once from Microsoft just died (((

Actually Microsoft has been supporting the iPhone better than WM. soo....

SHADOW-XIII said,
rip skype ... somehow chance of Skype getting support on devices/systems other than once from Microsoft just died (((

Support will still continue for other OSes, so it will be updated.

Spent $10 billion and counting to prop up the failed Windows Phone 7 launch, they deserve the beating they take in the stock market.

bob_c_b said,
Spent $10 billion and counting to prop up the failed Windows Phone 7 launch, they deserve the beating they take in the stock market.
It's not 'failed'. Beating Android and iPhone are not the measures of success.

Kirkburn said,
It's not 'failed'. Beating Android and iPhone are not the measures of success.

Hmmm, and yet around here OS X and Linux aren't generally considered successful because they don't beat Windows in sales. Double standard?

roadwarrior said,

Hmmm, and yet around here OS X and Linux aren't generally considered successful because they don't beat Windows in sales. Double standard?

lol, linux is such a tiny part of the market, its even losing its server bussiness quite rapidly.
and OSX is considered a massive success and windows beater by many, even tho its nowhere NEAR the windows market share.

Max Norris said,
Welcome to big business. How it's been done for a long time.

And that is the main problem with capitalism now.

Foub said,

And that is the main problem with capitalism now.


ye i mean a huge company like MS has been such a bad period in the history of personal computing and the internets...[/sarcasm]

I guess it gives Microsoft the ability to add more free bullet point crap to Xbox Live Gold rather than good worthwhile stuff that adds value and can't be had for free on a PC!

Honestly, I don't think anyone should be worried that Microsoft will drop support for any platforms. They already plan to release the Lync client eventually for all platforms. I see Skype as being their free method with the same goals, especially once Skype gains federated access to the other public IM systems.

I suspect right now, I'll only be disappointed if Lync 2010 R2 doesn't get improved in some way due to Skype… Like IM sync with those who are offline for parts of conversations, or the ability to edit sent messages, or better history in the actual Lync client itself.

Yeah I have little faith MS will decently support any platform outside MS products.

Hell Skype themselves before they were bought did little support outside windows.

necrosis said,
Yeah I have little faith MS will decently support any platform outside MS products.

Hell Skype themselves before they were bought did little support outside windows.


barely anyone uses a different product then windows, small market = small support.
welcome to the western world of capitalism.

Shadowzz said,

barely anyone uses a different product then windows, small market = small support.
welcome to the western world of capitalism.

That is not true.

I find it easy to get support for products with small market share. It's almost the opposite for me. Large market = small support.

StevoFC said,
Anyone else think they did this to nullify Facetime?

At some level yes, WP will get deep skype integration now, not just some app.

Faisal Islam said,
I thought it would be Google

If Google had bought it, I would have uninstalled it, and banned the software off my network. Google has a bad habit of destroying software.

Frylock86 said,

If Google had bought it, I would have uninstalled it, and banned the software off my network. Google has a bad habit of destroying software.

Google does what google does best: getting information... They don't difference between the web and your pc

Frylock86 said,

If Google had bought it, I would have uninstalled it, and banned the software off my network. Google has a bad habit of destroying software.

And you think Microsoft won't? Take a look at the previous version of Windows...

Tpiom said,

And you think Microsoft won't? Take a look at the previous version of Windows...

Sure they do, every company does, but I think not in the enormity of google

Tpiom said,
And you think Microsoft won't? Take a look at the previous version of Windows...
Wait, what? Are you implying MS bought and destroyed Windows? If not ... what *are* you implying?

Frylock86 said,

If Google had bought it, I would have uninstalled it, and banned the software off my network. Google has a bad habit of destroying software.
... and then make it open source.
I don't see how Google destroys software. You didn't even explain.

Skype 5 is pretty bad already. Ads popping up everywhere, every single day! No official way to disable, even for paying customers. I wonder why you didn't even uninstall Skype first, such adware.

Looks like Android won't be getting video chat & iPad won't get a native "HD" version. Skype will be integrated to death with Windows Live, even worse than the current integration with Facebook. Windows Phone 7 will get the best treatment of new features. /speculation

Simon- said,
Looks like Android won't be getting video chat & iPad won't get a native "HD" version. Skype will be integrated to death with Windows Live, even worse than the current integration with Facebook. Windows Phone 7 will get the best treatment of new features. /speculation

offcourse their own products get the best treatment.... nothing new here.
and i love FB's intergration with WLM, no need to keep damn FB website open all day to see who's around and what not.

I just hope they honor their pledge to continue support on non-Microsoft platforms. iPod Touch 4G + Skype + MiFi = my "poor man's" iPhone (I get 1GB of data for $20 a month on the MiFi, and Skype costs me less than $30 every 3 months, so in all I'm paying about $30 a month total).

I hope they don't turn it all wacky with nudges and other WLM crap.

I use Skype for the online number which isn't very good anyway so hopefully it will be improved..

Woah, big money!
Are we going to see Skype bundled in with Windows then? And Skype integration into Live Messenger.
Oh waht about Skype integration into the Windows Phone platform..... WIN!

yeoo_andy_ni said,
Woah, big money!
Are we going to see Skype bundled in with Windows then? And Skype integration into Live Messenger.
Oh waht about Skype integration into the Windows Phone platform..... WIN!

Unfortunately, probably not. Else they may get sued by the EU.

yeoo_andy_ni said,
Are we going to see Skype bundled in with Windows then?
That's ridiculous! Not even Windows Live Messenger was bundled with Vista and 7. Why would Microsoft change its mind with Skype?

HopeForP7Update said,

Unfortunately true

Unfortunately?!

I'm glad that they don't throw in software in the OS... Skype only has millions - not even close to Window's user base. So the majority would find the program useless.

I wonder if they'll integrate the service with Windows Live Messenger? Or at least make them talk to each other

Rudy said,
I wonder if they'll integrate the service with Windows Live Messenger? Or at least make them talk to each other
I do wonder how this will work, will they just take whichever has the bigger user-base and integrate the other into it.

From what I've seen Windows Live Messenger is basically dying off. Many are on Facebook and Skype nowadays. Even in a country like the Netherlands where MSN used to be the most popular IM protocol for many years.

I'm guessing Skype and Windows Live Messenger will be integrated into a single protocol, perhaps maintaining Facebook integration.

.Neo said,
From what I've seen Windows Live Messenger is basically dying off. Many are on Facebook and Skype nowadays. Even in a country like the Netherlands where MSN used to be the most popular IM protocol for many years.

Can not confirm that. In my region (Austria) WLM is spreaded widely...

.Neo said,
From what I've seen Windows Live Messenger is basically dying off. Many are on Facebook and Skype nowadays. Even in a country like the Netherlands where MSN used to be the most popular IM protocol for many years.

I'm guessing Skype and Windows Live Messenger will be integrated into a single protocol, perhaps maintaining Facebook integration.


Not really, pretty much each of my dutch friends still uses WLM. This hasnt changed a bit. Especially with more and more phones having a messenger, most are online allot more nowadays then year(s) ago.

Godlike_Ape said,

-1

There's no reason they can't exist side by side, or even be integrated somehow.

Next WLM with built in skype support?

netizen said,
Let's hope it supersedes the WLM platform sooner rather than later!

1+
agree the new wlm its an eye sore i keep using 8.5 which its cleaner, allow me to have my own nickname, less crap, less memory usage, less process running

eilegz said,
1+
agree the new wlm its an eye sore i keep using 8.5 which its cleaner, allow me to have my own nickname, less crap, less memory usage, less process running
netizen is talking about the entire WLM platform, which means that the 8.5 version you love to use would be useless without the WLM platform.

eilegz said,

1+
agree the new wlm its an eye sore i keep using 8.5 which its cleaner, allow me to have my own nickname, less crap, less memory usage, less process running


im using WLM 2011, still got my old nickname, the overview on contact lists isnt as LONG because they're all UNDER eachother, other words... much cleaner. Plus dont think a WLM client thats been running for 26 days, having had many hundreds of convos and still about 13 opened up still running at 70MB ram is such a HUGE issue nowadays or is it?
less process running? its still 1 process which name HASNT even changed since the old Windows Messenger: msnmsgr.exe
plus it has build in tabbed browsing and facebook intergration (and hopefully soon Skype intergration)

or click that little button to the top right when mouseover states "Switch to compact view"

Ently said,
Is Skype really worth that much?

I mean I love Skype and all but 8.5 BILLION?!?!?!

So worth it.

Let's face reality (as Microsoft itself has) - outside of vertical IP telephony applications and hardware/software combinations, such as Cisco Telepresence, who is *the* major player in the IP/Internet telephony space (despite Yahoo and Google, let alone Windows Live/Lync)? In fact, outside of that sponsorship/services deal between The Rachel Maddow Show (TRMS) and Cisco, the remainder of MSNBC uses Skype (as does the rest of NBC - cable and broadcast; it's all the more hilarious considering that NBC's parent is now Comcast Cable, which *also* has a humungous, though nonexclusive, deal with Cisco).

Ently said,
Is Skype really worth that much?

I mean I love Skype and all but 8.5 BILLION?!?!?!

Yes it is. You have to think outside the consumer mind to see it. They did not bought Skype the program but the technology behind it.

If they could integrate that technology into Microsoft's VOIP business services, then well worth the investment.

Lare2 said,

Yes it is. You have to think outside the consumer mind to see it. They did not bought Skype the program but the technology behind it.

If they could integrate that technology into Microsoft's VOIP business services, then well worth the investment.

No, they didn't buy the technology. That's not all that valuable. What they're buying is the brand and the user base.

CalumCookable said,

No, they didn't buy the technology. That's not all that valuable. What they're buying is the brand and the user base.

Of course the technology IS valuable, but not at that price

Lare2 said,

Yes it is. You have to think outside the consumer mind to see it. They did not bought Skype the program but the technology behind it.

If they could integrate that technology into Microsoft's VOIP business services, then well worth the investment.

What you said, but backwards...

Microsoft has better(and equal) technologies for both voice and video over networks, it is the Skype name/market and its contracts with infrustructure and carriers that Microsoft needs Skype to access.

For example, Skype has telco deals, and product integration deals that have been unavailable to Microsoft, as Skype was willing to create a lot of specific and abstract software implementations that would have polluted/fragmented Microsoft's existing technologies.

There is a lot of anti-Microsoft pull in many of the markets, and when it comes down to providing a 'feature', there was no benefit for companies rely on Communicator or Messenger and use the Microsoft 'brand' for their products.

One really big and good example of this Verizon, where Skype is a brand they partner with, that also goes beyond just a smartphone 'app', as it is available on many Verizon products.

Verizon also provides this as a feature to customers in that they use 'voice' cellular connections that hook into Skype, thus not consuming the data side of their infrastructure, which is a big feature for them to provide, and a nice contract for both Skype and Verizon, but something Verizon would NEVER have considered with Microsoft, and never would have 'valued' Windows/Live Messenger as a value/brand.

There is also the line access and phone number deals and contracts, again not easily available to Microsoft in the context that Skype has them.

There is a 'lot' of things that Skype brings to the table for Microsoft, but it is not the base voice and video technologies, as Microsoft can already do that. (Remember they created VC1, and several of the voice VOIP codec technologies with partners used as standards throughout the telecom industry.)


With the Verizon example, also notice that Verizon has been dragging their feet and basically giving Microsoft the finger when it comes to WP7, as the CEO hates Microsoft for personal reasons. Now Verizon has to deal with Microsoft, as they will have common interests to support, which should help Verizon get off the anti-WP7 fence, and finally help curtail a major market where they single handedly created Android's dominance.