Microsoft to acquire Skype for $8.5 billion

Microsoft is acquiring Internet phone company Skype for $8.5 billion, the companies confirmed within the hour.

The deal, a major coup for Microsoft and a blow to other Skype suitors -- Facebook in particular -- needs to be approved by the boards of both companies.

From the press release:

The acquisition 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 combination will 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.

With 170 million connected users and over 207 billion minutes of voice and video conversations in 2010, Skype has been a pioneer in creating rich, meaningful connections among friends, families and business colleagues globally. Microsoft has a long-standing focus and investment in real-time communications across its various platforms, including Lync (which saw 30 percent revenue growth in Q3), Outlook, Messenger, Hotmail and Xbox LIVE.

Microsoft is conducting a press conference to discuss the deal at 11 a.m. EDT.

The probability that Microsoft and Skype would reach a deal was first reported last night by The Wall Street Journal.

The acquisition by Microsoft would conclude a checkered history for Skype that has included a meteoric rise in user popularity, time under the eBay umbrella and contentious lawsuits over intellectual property. Business Insider has a concise timeline here. That site also has a good rundown of the winners and losers, with the former including Skype founder's Niklas Zennstrom and Janus Friis, Skype's investors, particularly venture capitalist Marc (The Kingmaker) Andreessen, and Microsoft's Windows Phone 7 partners. Among the losers: Cisco.

From: http://www.flixya.com/blog/2957660/Microsoft-to-acquire-Skype-for-85-billion