Microsoft has acquired the VoIP giant Skype for 8.5 billion US dollar in cash. There was some rumors first that Facebook is in talks with Skype to acquire it, but this was not what happened actually.
The deal was completed by Monday evening and was headed by Steve Ballmer who is the CEO of Microsoft. There was assistance from others as well while deciding on the deal such as Microsoft’s head of corporate strategy, Charles Songhurst.
The deal is one of the biggest deals Microsoft has ever done in past few decades. One interesting thing to note is that, that Skype is not making considerable amount of profit yet. In fact, it was not at all profitable. Skype carried a debt of US $686 at the time of deal. According to the official documents filed with the SEC, Skype had a revenue of US $860 million last year and an operating profit of US $264 million and the company lost US $6.9 million overall.
One of many factors of making such a huge payment is the large user base of Skype. Skype currently has more than 663 million users. Out of this figure, 145 million are those who use Skype monthly and around 8.8 million users are paying customer. In recent times, the total customer base that a company has acquired a lot of significance as is visible from the huge price tag paid by Microsoft.
The inventors of Skype are clear winners of this whole deal. In September 2009, a group consisting of Index Ventures, Andreessen Horowitz, Silver Lake and the Canada Pension Plan Investment Board purchased Skype from eBay for a sum of US $2.75 billion.
Tony Bates, who joined Skype as CEO in October would now be designated as President of Microsoft Skype Division and would report directly to Ballmer.
Let us see how effectively Microsoft uses this acquisition in its favour to gain innovative and break through products and services.