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| Version 6 | Version 7 |
|---|---|
| Microsoft confirms takeover of Skype | Microsoft confirms takeover of Skype |
| (about 6 hours later) | |
| Microsoft has confirmed that it has agreed to buy internet phone service Skype. | Microsoft has confirmed that it has agreed to buy internet phone service Skype. |
| The deal will see Microsoft pay $8.5bn (£5.2bn) for Skype, making it Microsoft's largest acquisition. | The deal will see Microsoft pay $8.5bn (£5.2bn) for Skype, making it Microsoft's largest acquisition. |
| Luxembourg-based Skype has 663 million global users. In August last year it announced plans for a share flotation, but this was subsequently put on hold. | Luxembourg-based Skype has 663 million global users. In August last year it announced plans for a share flotation, but this was subsequently put on hold. |
| Internet auction house eBay bought Skype for $2.6bn in 2006, before selling 70% of it in 2009 for $2bn. | Internet auction house eBay bought Skype for $2.6bn in 2006, before selling 70% of it in 2009 for $2bn. |
| This majority stake was bought by a group of investors led by private equity firms Silver Lake and Andreessen Horowit. | This majority stake was bought by a group of investors led by private equity firms Silver Lake and Andreessen Horowit. |
| Other major shareholders include tech-firm Joltid and the Canada Pension Plan Investment Board. | Other major shareholders include tech-firm Joltid and the Canada Pension Plan Investment Board. |
| Shares in Microsoft ended the day in New York down 0.5% at $25.68. In contrast, eBay - which owns a stake in Skype - saw its share price rally 2.5%. | |
| 'Defensive move' | 'Defensive move' |
| Microsoft chief executive Steve Ballmer said: "Skype is a phenomenal service that is loved by millions of people around the world. | Microsoft chief executive Steve Ballmer said: "Skype is a phenomenal service that is loved by millions of people around the world. |
| It's a done deal: Microsoft has bought Skype for a whopping $8.5bn. | It's a done deal: Microsoft has bought Skype for a whopping $8.5bn. |
| That's a lot of cash for an eight-year-old company that's not making a lot of money. | That's a lot of cash for an eight-year-old company that's not making a lot of money. |
| So what's in it for Microsoft? | So what's in it for Microsoft? |
| For starters, the firm gets well over 600 million users who make Skype the world's largest phone company for international voice calls. | For starters, the firm gets well over 600 million users who make Skype the world's largest phone company for international voice calls. |
| More importantly, Microsoft buys into a lot of potential. | More importantly, Microsoft buys into a lot of potential. |
| Marry Skype's software with the Xbox Kinect and an HD television set, and Microsoft can make a powerful argument for getting into millions of living rooms. | Marry Skype's software with the Xbox Kinect and an HD television set, and Microsoft can make a powerful argument for getting into millions of living rooms. |
| Think beyond teleconferencing for the whole family: there's one-on-one training, home schooling, even patient care delivered remotely and in vision. | Think beyond teleconferencing for the whole family: there's one-on-one training, home schooling, even patient care delivered remotely and in vision. |
| Smarten it up for the corporate world, and Microsoft can challenge the telepresence business of firms like Cisco and Polycom. | Smarten it up for the corporate world, and Microsoft can challenge the telepresence business of firms like Cisco and Polycom. |
| And Skype is multi-platform, reaching into the worlds of Apple and Linux. | And Skype is multi-platform, reaching into the worlds of Apple and Linux. |
| Finally, Skype is mobile, and can be paired with Windows Phone 7. | Finally, Skype is mobile, and can be paired with Windows Phone 7. |
| The hitch: Microsoft boss Steve Ballmer will have to work hard to integrate Skype, to ensure the voice/video-over-the-internet company is not strangled by his firm's notorious bureaucracy. | The hitch: Microsoft boss Steve Ballmer will have to work hard to integrate Skype, to ensure the voice/video-over-the-internet company is not strangled by his firm's notorious bureaucracy. |
| "Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world." | "Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world." |
| Skype will now become a new division within Microsoft, and Skype chief executive Tony Bates will continue to lead the business, reporting directly to Mr Ballmer. | Skype will now become a new division within Microsoft, and Skype chief executive Tony Bates will continue to lead the business, reporting directly to Mr Ballmer. |
| "It's a strategic asset and a defensive move [for Microsoft]," said Colin Gillis, an analyst at BGC Financial. | "It's a strategic asset and a defensive move [for Microsoft]," said Colin Gillis, an analyst at BGC Financial. |
| "If they can put it on Windows 8, it gives them an advantage. It helps them in the tablet market." | "If they can put it on Windows 8, it gives them an advantage. It helps them in the tablet market." |
| Other analysts say Microsoft's aim in buying Skype is to improve its video conferencing services. | Other analysts say Microsoft's aim in buying Skype is to improve its video conferencing services. |
| Price concerns | Price concerns |
| Although the price tag of $8.5bn will not stretch the US giant, some experts have questioned whether it is paying too much for a company that has struggled to turn a profit. | Although the price tag of $8.5bn will not stretch the US giant, some experts have questioned whether it is paying too much for a company that has struggled to turn a profit. |
| Michael Clendenin, managing director of consulting firm RedTech Advisors, said: "If you consider [Skype] was just valued at about $2.5bn 18 months ago when a chunk was sold off, then $8.5bn seems generous. | Michael Clendenin, managing director of consulting firm RedTech Advisors, said: "If you consider [Skype] was just valued at about $2.5bn 18 months ago when a chunk was sold off, then $8.5bn seems generous. |
| "[It] means Microsoft has a high wall to climb to prove to investors that Skype is a necessary linchpin for the company's online and mobile strategy." | "[It] means Microsoft has a high wall to climb to prove to investors that Skype is a necessary linchpin for the company's online and mobile strategy." |
| This view was echoed by Ben Woods, head of research group CCS Insight. | This view was echoed by Ben Woods, head of research group CCS Insight. |
| "The big unanswered question is how do Skype assets work for Microsoft... how do you justify the price?" he said. | "The big unanswered question is how do Skype assets work for Microsoft... how do you justify the price?" he said. |
| Skype was founded in 2003. | Skype was founded in 2003. |
| Calls to other Skype users are free, while the company charges for those made to both traditional landline phones and mobiles. | Calls to other Skype users are free, while the company charges for those made to both traditional landline phones and mobiles. |