Microsoft Buys Skype

May 10, 2011

First Facebook and then Microsoft were in talks to buy Skype.  Microsoft announced that it has acquired Skype the VoIP giant for $8.5 billion.

Skype will be integrated into Microsoft devices and systems such as Xbox and Kinect, Xbox Live, the Windows Phone, Lync and Outlook. The company has assured to continue supporting and developing Skype clients on non-Microsoft platforms as well.

This  acquisition is expensive for Microsoft. Not only is it the largest price Microsoft has paid for a company in decades, Skype is not yet profitable. Despite revenues totaling $860 million last year and operating profits of $264 million, the company lost $6.9 million overall, according to documents filed with the SEC. And the company carries $686 million in debt.

Much of the company’s attraction rests in its largest user base of 663 million, 145 million of which use Skype monthly.

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