Microsoft acquires Skype for $8.5 billion
11 May 2011 | Posted by admin
Yesterday Microsoft, the world’s largest software company, revealed it had entered an agreement to purchase Skype - maker of the most popular Web-based phone service in the world -for $8.5 billion US in cash, making it the largest takeover in Microsoft’s history.
For Microsoft, the acquisition of Skype give the software giant another powerful tool to safeguard its position as a business communications provider.
Acquisitions have always played a role in Microsoft’s company development going right back to the launch of MS DOS in 1982 which was a modified version of Seattle Computer Product’s QDOS.
Microsoft Corp. chief executive Steve Ballmer said in a news conference yesterday that Microsoft plans to integrate Skype’s Internet calling service into a number of its products, ranging from consumer devices like the Xbox video-game console to the company’s business-focused Office software.
The Skype acquisition follows on from recent partnerships with Nokia and BlackBerry which are aimed at positioning the company in the post-PC marketplace.
However some analysts feel that the price may have been too high as Google and Facebook forced Microsoft into a bidding war over the purchase - and Microsoft shares fell 0.62 per cent following the announcement.
While the deal seems to make sense, it will all depend on how Microsoft integrate this new tool into their own product offerings.
During my own time with America On-Line, the merger with Time Warner seemed on the face of it to make sense as one party had a global online distribution infrastructure along with a massive customer base while the other had quality content that could be delivered to that customer base.
However, that merger which was billed as the biggest deal in history, is now discussed in business schools as the worst in history.
So only time will tell how successful Microsoft will be with their shiny new toy!
Mark Sheehan
MD clickstream