Skype sold to Microsoft for $8.5 billion

Skype will soon become a business division of Microsoft, reps for Microsoft and Skype announced today. But was the Microsoft-Skype deal a good one?

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    Skype has been acquired by Microsoft for a whopping $8.5 billion.
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Skype, the popular VoIP platform first launched in 2003, has been purchased by Microsoft for $8.5 billion. According to reps for both companies, Microsoft will get full access to Skype's range of desktop and mobile apps; eventually, Microsoft will use Skype to help power in-house products such as the Xbox 360 and the fleet of Windows phones.

"Once the acquisition closes, Skype will become a new business division of Microsoft," Skype CEO Tony Bates wrote on the official company blog. "It is an exciting day for all of us at Skype –– we’ve taken a significant step towards realising our vision of making the world a better, more connected place." Fair enough. The Microsoft-Skype deal is certainly good for Skype. But is it really good for Microsoft?

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Over at Wired, Peter Bright questions the thinking behind the buyout. "The purchase price is a phenomenal amount of money to spend on a company that has long struggled for profitability, and it’s hard to believe that it’s truly the most cost-effective way of getting access to telephony and VoIP technology," Bright writes. "Microsoft could build equivalent telephony infrastructure for much less, just as Google is doing for Google Voice." More here.

Other analysts have posited that Microsoft purchased Skype in order to keep the service from being acquired by another tech giant. Google, for instance, had reportedly expressed interest in Skype as recently as this month; Larry Dignan of ZDNet argues that Cisco and Avaya could also have purchased the company, leaving Microsoft with one major-league headache.

"[T]he reality is that Microsoft is paying up for Skype because it’s an $8.5 billion game of keepaway," Dignan writes. "And you know what? The deal — and its price tag — makes sense." Do you agree? Drop us a line in the comments section. And in the meantime, for more tech news, sign up for the free Innovation newsletter, which is emailed out every Wednesday morning.

RELATED: Beginner's guide to Skype

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