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Microsoft Buys Skype For $8.5 Billion
eBay Makes $2.5 Billion, Founders Make $1.19 Billion
by Karl Bode Tuesday 10-May-2011 tags: business · VoIP
Tipped by pleekmo See Profile
Microsoft this morning officially announced, that the company has acquired Skype for $8.5 billion in an all-cash deal. The Journal insists that the deal was "spearheaded in a closely held negotiations by Microsoft CEO Steve Ballmer," and includes $686 million in debt. The company was acquired by eBay for $2.6 billion in cash and stock back in 2005, and eBay gets $2.55 billion for its remaining 30% stake -- meaning they finally made money on the deal. Skype co-founders Niklas Zennström and Janus Friis get about $1.19 billion for their 14% stake in the company. Speculation now shifts to exactly what Microsoft has planned with the acquisition (some kind of Skype/Kinect mash up?) and/or just how badly Microsoft will foul up the acquisition with their unique bureaucratic charm.

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FBGuy
yippee ki yay
Premium
join:2005-03-19

there goes linux support

amirite?
yokocar

join:2008-04-12
Whitby, ON

Re: there goes linux support

..and Android, and IPhone and a host of others.

MS will find a way to screw it up.

aztecnology
O Rly?
Premium
join:2003-02-12
Murrieta, CA

Re: there goes linux support

What will they change the name to, and how many versions will they have...?

Windows 7 Phone VoIP Communicator Home Starter Edition, perhaps...
--
.:|:. aztec being aztec...™
yokocar

join:2008-04-12
Whitby, ON

Re: there goes linux support

...but you'll be able to upgrade your free software to the Pro version for $179.

NY Tel
Premium
join:2004-04-09
Smithtown, NY
kudos:3
Reviews:
·AT&T CallVantage
said by aztecnology:

What will they change the name to, and how many versions will they have...?

Windows 7 Phone VoIP Communicator Home Starter Edition, perhaps...

No I vote for a combination of Windows + Skype =

WYPE

Does anyone want to wype with me this weekend?

Boricua65
Premium
join:2002-01-26
Sacto Sh*tty

Re: there goes linux support

I don't if know that is kinky or gross .

milnoc

join:2001-03-05
H3B
kudos:1
What should we Wype you with? An iPad?
PDXPLT

join:2003-12-04
Banks, OR

Re: there goes linux support

I bet the SEC will require continued linux support in order to approve this deal.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
WYPE would be especially useful on the Human CentiPad...


NY Tel
Premium
join:2004-04-09
Smithtown, NY
kudos:3
Reviews:
·AT&T CallVantage
said by milnoc:

What should we Wype you with? An iPad?

Good one!

Alcohol
Premium
join:2003-05-26
Climax, MI
kudos:3
Reviews:
·Comcast
said by NY Tel:

said by aztecnology:

What will they change the name to, and how many versions will they have...?

Windows 7 Phone VoIP Communicator Home Starter Edition, perhaps...

No I vote for a combination of Windows + Skype =

WYPE

Does anyone want to wype with me this weekend?


--
I found the key to success but somebody changed the lock.

dlarkin_dc

join:2009-08-24
Alexandria, VA

Re: there goes linux support

BRILLIANT!!
NormanS
Premium,MVM
join:2001-02-14
San Jose, CA
kudos:4
Reviews:
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·Pacific Bell - SBC
said by aztecnology:

What will they change the name to, and how many versions will they have...?

My money is on, "Windows Live Skype". Which will be abbreviated to WLS, then expanded by those who hate it to, "Windows Live Sh*t".
--
Norman
~Oh Lord, why have you come
~To Konnyu, with the Lion and the Drum

chlen
Ethically Challenged
Premium
join:2001-01-16
Albany, NY
said by yokocar:

..and Android, and IPhone and a host of others.

MS will find a way to screw it up.

I do not think so. In fact you can bet on it.

MS stands only to lose by dropping Android, Linux, Mac support, less users = less profit. This arm of MS is not the same that makes Windows.

MS is not in the loosing money business, they will more then gladly support as many devices as possible and this will make skype even better with more money and support behind it, it will become a much wider used business tool.
--
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ricklerre

join:2009-06-22
Brooklyn, NY

Re: there goes linux support

said by chlen:

MS stands only to lose by dropping Android, Linux, Mac support, less users = less profit. This arm of MS is not the same that makes Windows.

MS is not in the loosing money business, they will more then gladly support as many devices as possible and this will make skype even better with more money and support behind it, it will become a much wider used business tool.

Just like with Silverlight DRM support?

chlen
Ethically Challenged
Premium
join:2001-01-16
Albany, NY

Re: there goes linux support

said by ricklerre:

said by chlen:

MS stands only to lose by dropping Android, Linux, Mac support, less users = less profit. This arm of MS is not the same that makes Windows.

MS is not in the loosing money business, they will more then gladly support as many devices as possible and this will make skype even better with more money and support behind it, it will become a much wider used business tool.

Just like with Silverlight DRM support?

Apples and oranges. MS makes money regardless of OS on skype.
--
This is not the greatest post in the world, no, this is just a tribute!

Слесарь-гинеколог

OSUGoose

join:2007-12-27
Columbus, OH
Hell look at Bing, they have made apps for iphone, is default search on non-ms phones. MS dosent care who's OS the device has, if they can get their wares on it they will, this aint the old MS where they wanted you to be 100% within the MS Family.

milnoc

join:2001-03-05
H3B
kudos:1
Maybe not. Microsoft has spent a bundle acquiring Skype. The last thing they'd want to do is kill off existing revenue streams such as the ads and the "real phone" subscription fees.

What this will definitely do however is allow them to integrate Skype directly into the Windows Phone 7 operating system, just like what was accomplished with the Nokia N900 smartphone.
--
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NOCMan
MacChatter
Premium
join:2004-09-30
Colorado Springs, CO

Re: there goes linux support

8 billion is a lot of money to spend on something they already could do for free.
en103

join:2011-05-02

Re: there goes linux support

True - but this is the cost of running the competition out of business.

digisyn

@sbcglobal.net

Re: there goes linux support

Exactly, MS has had for years the habit of either forcing companies out of business or buying them.

As for the case that MS could do this for free? I think they would rather have something that actually works and works well.

I like Skype very much. The brilliant minds behind it have a product that works no matter what. From a sysadmin point of view, Skype traffic on a corporate network is almost impossible to kill.

The unfortunate fact is that because it is MS after all, I and many others will or have already uninstalled Skype and will never use it again.

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
Reviews:
·AT&T DSL Service
And ask yourself?

Why would you pay 8 billion to run the competition out of business?

So... you can rape back 10x that amount from the captive slavesumers, perhaps?
--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini

skuv

@rr.com
said by NOCMan:

8 billion is a lot of money to spend on something they already could do for free.

How exactly do you think they would have acquired 600+ million new customers for free?

dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
kudos:4
said by NOCMan:

8 billion is a lot of money to spend on something they already could do for free.

How much ya wanna bet that goes away or they put some low call length limitation in
--
The early bird gets the worm but the second mouse gets the cheese

DarkLogix
Premium
join:2008-10-23
Baytown, TX
kudos:3
Why they already have Lync they don't need another Voip

whats this going to do for them? Give em a public Voip program when they already have an enterprise voip program?

BF69 fan

@charter.com

Re: there goes linux support

Just like google had google video? If a product is better then what you had, why not buy it and kill off the lesser of the two products?

nukscull

@rr.com
MS paid the $8.5 billion to mostly get the customer base of Skype. 600+ million customers. They don't want to alienate any of those or they wouldn't have paid as much money as they did.

So while it's not far-fetched to think that MS would drop support for anything but Windows, it would be silly for them to do so. Especially since all the software and infrastructure is there for them to continue to offer all of the support.

If they had developed Skype from the ground up, it would make sense that they wouldn't have Linux versions, and iPhone versions, and Android versions.

But it's because of those versions that a big chunk of those 600+ million users exist.
guppy_fish
Premium
join:2003-12-09
Lakeland, FL
kudos:1
Reviews:
·Verizon FiOS

Nice while it lasted

MS will do everything in their power to mess it up. They will start by internally mandating Skype uses MS technology, have a windows 7 look and not support the Mac

In 5 years, they will shut it down due it loses money, after they raised prices on the service and stopped the free internet only calling

MarkAW
Barry White
Premium
join:2001-08-27
Canada
kudos:16

Re: Nice while it lasted

said by guppy_fish:

MS will do everything in their power to mess it up. They will start by internally mandating Skype uses MS technology, have a windows 7 look and not support the Mac

In 5 years, they will shut it down due it loses money, after they raised prices on the service and stopped the free internet only calling

...or support Linux.
--
Those who do not archive the past are condemned to retype it.
Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.
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OSUGoose

join:2007-12-27
Columbus, OH
actualy i see them meshing this with windows live messenger, perhaps dropping the current ability to call with messenger for skype's establised platform.

N3OGH
Yo Soy Col. "Bat" Guano
Premium
join:2003-11-11
Philly burbs
kudos:1
Or try and sell it off at a huge loss, much as News Corp is trying to ditch Myspace.
--
Petty people are disproportionally corrupted by petty power

lordfly

join:2000-10-12
Homestead, FL
Reviews:
·SkyNet360
·AT&T Southeast

Now we stop using Skype.

I will now have to make a company wide suggestion to stop using Skype. There is nothing good about Microsoft buying anything. They have already stolen enough technology and called it their own. Now they have a chance to legally steal technology and then get rid of it.

Ugh!

See 19 replies to this post

Kommie
Premium
join:2003-05-13
united state
kudos:2

I wish it was Google :(

I wish it was Google
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

Re: I wish it was Google :(

said by Kommie:

I wish it was Google

They already have Google Voice. All they have to do is add wi-fi/3G calling, and you can bet that will come, maybe sooner now that MS bought Skype.

Romney2012
Defeat Obama 2012-Chg we can believe in
Premium
join:2002-03-03
USA
kudos:4

Re: I wish it was Google :(

said by ISurfTooMuch:

They already have Google Voice. All they have to do is add wi-fi/3G calling, and you can bet that will come, maybe sooner now that MS bought Skype.

MS will have Skype on Windows Phone 7. Google has Google Voice on Android. And Apple has Facetime on iOS. This is all the major cellphone platforms getting ready to dump regular voice services altogether and switching to VOIP data only cellphones. It has been predicted before, but VOIP will be the only voice services that mobile users will be using. How long? 5 years from now, their will not be any voice services on cellphones that isn't VOIP.
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openbox9

join:2004-01-26
Alexandria, VA
kudos:2

Re: I wish it was Google :(

I agree that the day is coming, but first, these services need to be interoperable, which they aren't now.

cruz1

@sbcglobal.net

F%^K!

Well, F&^K! I was JUST getting excited about Android video support ... Android support will be the first to go, then Linux, then iPhone. You can forget Playstation, etc...

Doesn't MS know that people HATE Microsoft? And we will stop using their products not only because they manage to F' up everything but because we hate them? If they even want a chance to succeed, they better not show bias towards MS products

aaronwt
Premium
join:2004-11-07
Woodbridge, VA
Reviews:
·Verizon FiOS

Re: F%^K!

said by cruz1 :

Well, F&^K! I was JUST getting excited about Android video support ... Android support will be the first to go, then Linux, then iPhone. You can forget Playstation, etc...

Doesn't MS know that people HATE Microsoft? And we will stop using their products not only because they manage to F' up everything but because we hate them? If they even want a chance to succeed, they better not show bias towards MS products

Now if the dark side, Apple, had bought them that might be bad. I certainly like Microsoft better than Apple. I use many, many products from Microsoft and they work extremely well.

Transmaster
Don't Blame Me I Voted For Bill and Opus

join:2001-06-20
Cheyenne, WY

^%$#@^%!!!%* indeed

Did you hear that......They just called a code blue at the EU HQ. The ministers at the European Union just went into cardiac arrest. Skype has always horned into their monopolistic phone systems, and now combine that with the most hated thing in their computer world, M$ chest pains, heart palpitations, full arrest.
--
I am quite sure now that often, very often, in matters concerning religion and politics a man's reasoning powers are not above the monkey's.
- Mark Twain in Eruption
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

Re: F%^K!

said by cruz1 :

Well, F&^K! I was JUST getting excited about Android video support ... Android support will be the first to go, then Linux, then iPhone. You can forget Playstation, etc...

Give Tango a shot. They're already doing video calls on Android and iPhone. And they seem to work pretty well. No support on other platforms, at least not yet. »www.tango.me
jjeffeory

join:2002-12-04
USA
I understand. I feel the same way about at&t and apple. 8-)

JHB
California Dreamin'

join:2002-02-08
California
People dont hate Microsoft! Maybe most people in these forums!
qworster

join:2001-11-25
Bryn Mawr, PA

Skype isn't broken....

....so of course, M$ will have to break and ultimately destroy it...
kcblack
Premium
join:2000-09-11
Chicago, IL

Re: Skype isn't broken....but skype video on 4g is...

Skype is broken. When they forgo a revenue stream on all 4g android carriers for a deal for an exclusive with Verizon, it is broken....

buddahbless

join:2005-03-21
Premium
Reviews:
·Comcast
·T-Mobile US

I wont stop using it just yet

I can see this going very wrong however Im sure MS wont try to F%$* it up just yet, all Internet calling and regular features will stay the same, there will be support for android windows phone and other smartphones, but the software will cost u a small fee, except or apple devices I see them getting rid of apple support totally or charging a pretty penny for support of the competing brand thats a given. As for Linux support thats a touchy subject, but I'd say, get ready to say good bye.

PS Microsoft (IE: Bill Gates) seems to be dipping into everything lately, He just became the majority share holder in CN ( Canadian National) railroad.. He really is a railroad tycoon.

milnoc

join:2001-03-05
H3B
kudos:1

Re: I wont stop using it just yet

The Bill Gates Tower?

buddahbless

join:2005-03-21
Premium
Reviews:
·Comcast
·T-Mobile US

1 edit

Gates tower...

LOL Bill could go into the rel-estate market next and actually finish building the Chicago Spire and rename it... The Gates Spiral, and top Trumps tower and his big over-sized ego.

Heck the estimate cost for the spire is only $2.4 Billion and most of the ground work is already done, not to mention gates can have CN railroad ship in everything needed for little to nothing, as he is the majority share holder, and we Microsoft techs will do all the electrical and networking as an inside contract, no union needed. Hell can have it built for $1 billion! lol

DarkLogix
Premium
join:2008-10-23
Baytown, TX
kudos:3

Re: Gates tower...

you do relize that Bill isn't dealing with microsoft any more right?
he's as close to retired as he's planning to go

n2jtx

join:2001-01-13
Glen Head, NY
Reviews:
·Optimum Online

Curiouser and Curiouser

I have to say I am scratching my head over this one, just like when eBay acquired Skype. I wonder if Micro$oft will be able to Skype going and keep improving it or if I can kiss iOS and other non-Windows platform support goodbye. I am not overly optimistic.
--
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ChuckIL9

join:2005-11-07
Peoria, IL

Telefonica partnership didn't work so...

Why? Because Skype sounds a little like Voype?

chachster
Premium
join:2002-08-07
Westerville, OH

Is the end near?

R.I.P. skype

I hope I am wrong and MS supports this across all current platforms and expands to even more.

elwoodblues
Elwood Blues
Premium
join:2006-08-30
HarperLand
Reviews:
·Cybersurf Intern..

What a disaster!

They paid CASH for the company,that shows you how filthy rich M$ really is.

Will they screw up ? In the long term, in the short term, they need to figure out why the bought it, other then taking a tax loss.
--
All Hail Harper, the Wannabe King of Canada

See 6 replies to this post

clssclmu

@comcast.net

Live Voice?

Maybe MS will set up a competing 'Google Voice' product for their 'Live' applications. That could be cool!
jfmezei
Premium
join:2007-01-03
Pointe-Claire, QC
kudos:22
Reviews:
·ELECTRONICBOX

LTE may be key to this

Remenber that LTE is still without voice support.

With Skype, Microsoft will be able to give 4g "Windows" phones voice capabilities that others (Apple, Android) won't have.

So Windows Mobile 4G phones may be first to offer voice support.

(by 4G, I mean LTE).

DarkLogix
Premium
join:2008-10-23
Baytown, TX
kudos:3

math come on

quote:
The company was acquired by eBay for $2.6 billion in cash and stock back in 2005, and eBay gets $2.55 billion for its remaining 30% stake -- meaning they finally made money on the deal.
2.6billion is more than 2.55 billion so theystill didn't make money they lost 50million and thats before counting inflation

nukscull

@rr.com

Re: math come on

They only lost money on the deal if Skype made eBay $0 for as long as they owned them.

Do you really believe that is the case?

If someone pays you $2.55 billion for a company you paid $2.6 billion for, and that company made you more than $50 million for the years you owned it, you didn't lost money.

Pathfinder
Dazed Confused
Premium
join:2000-03-26
Mount Vernon, NY
Reviews:
·RoadRunner Cable
·Verizon Online DSL
said by DarkLogix:

quote:
The company was acquired by eBay for $2.6 billion in cash and stock back in 2005, and eBay gets $2.55 billion for its remaining 30% stake -- meaning they finally made money on the deal.
2.6billion is more than 2.55 billion so theystill didn't make money they lost 50million and thats before counting inflation

In 2009 Ebay sold 65% to private investors for $1.9B.
According to other articles I have read, Ebay has a 35% stake.
35% of 8.5B = 2.975 B + 1.9B = 3.875B
3.875B - 2.6B = 1.275B profit. Not too bad.

blueeyesm

join:2003-09-05
Waterloo, ON

M$ helping incumbents?

This can only help companies like AT&T et al., as M$ will find a way to minimize it's effectiveness. Probably, by blending it into XBox Live, Live Messenger, etc. and provide minimal support for it by making it an applet in Windows 8 for those who just want to 'make a call' using their (soon-to-be) legacy accounts.
kcblack
Premium
join:2000-09-11
Chicago, IL
Reviews:
·Comcast

Need Android Video Support besides Verizon

I just hope this gets skype off its but and lets all android 4g users have video chat, just just verizon. I would have paid to do this but they wouldn't do it cause of their deal with Verizon and I'm on Sprint. Considering that Skype bought Qik a couple months ago, this just doesn't make any sense. This is the whole reason I bought a phone with a front facing camera.

math

@ebay.com

Better math

The Math:

eBay bought it for 2.5 billion

They sold 65% of it in 2009 for $1.9 billion

They kept 35%, which means today they made a *profit* 2.9 billion.
megarock

join:2001-06-28
Catawissa, MO

boring...

now I can look forward to embedded viruses in skype like the rest of the Microsoft product line. Glad I quit using it some time ago because it's full of spammers and marketers.
tito79

join:2010-03-14
Carmel, NY

Net meeting?

Guess thats going to be there new version of net meeting lol.

DarkLogix
Premium
join:2008-10-23
Baytown, TX
kudos:3

Re: Net meeting?

they already have a voip/video product
its cald Lync

David
Now accepting new patients
Premium,VIP
join:2002-05-30
Granite City, IL
kudos:70

and just when I got a skype account

oh well. I haven't really used it yet.

I don't think I could stomach installing WGA on my iphone.

M A R S
Premium
join:2001-06-15
Long Island

I never cared for Skype

Google Voice, Talk and Chat do ill i need or want. Anyone else feel this way?

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