It’s true: Microsoft is buying Skype for $8.5 billion in cash. The release just crossed the wire, confirming the reports that have been swirling since last night. In a sign of the significance of the acquisition, Skype won’t be absorbed into an existing Microsoft group but will become a new business division inside Microsoft, led by Skype CEO Tony Bates as the division’s president, reporting to Microsoft CEO Steve Ballmer.

It’s the largest acquisition in Microsoft’s history.

Microsoft cites the potential for Skype to support Xbox, Windows Phone and Kinect, and the company says it will connect Skype users to Outlook, Lync, Xbox Live and other existing Microsoft communities. The company also promises in the news release that it “will continue to invest in and support Skype clients on non-Microsoft platforms.”

Both boards have approved the deal, and it will be subject to regulatory approval. Microsoft and the Skype investor group, led by Silver Lake, say they hope to receive the required approval this year.

“Skype is a phenomenal service that is loved by millions of people around the world,” says Ballmer in the news release. “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.”

Follow-up: Microsoft banking on Skype brand, user base to justify gigantic deal

Previously: Skype and Kinect could be Microsoft’s killer combo

Comments

  • Asparuhbg

    FFFFFFUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

  • Guest

    WOW! Congratulations to Skype on a successful exit! It’s innovative reasons like this that have led many to call Microsoft “the world’s first trillion-dollar company.”

    One trillion dollars of shareholder value. Thank you, Steve. Thank you. Thank you again.

  • http://www.facebook.com/people/Steve-Murch/705204492 Steve Murch

    Skype is indeed a phenomenal service. But I can’t help but think of the collection of assets that MSFT could have purchased for this sum. Seems a very, very high pricetag to me, for a company that’s (to my knowledge) never shown a profit, and in some danger of being a utility/commodity.

  • Anonymous

    Skype has been successful by challenging the interests of mobile operators and traditional telcos. But Microsoft has close relationships with both. I wonder whether they’ll be willing to innovate on the Skype platform if operators start threatening not to support WP7 devices in retaliation.

  • Anonymous

    Skype has been successful by challenging the interests of mobile operators and traditional telcos. But Microsoft has close relationships with both. I wonder whether they’ll be willing to innovate on the Skype platform if operators start threatening not to support WP7 devices in retaliation.

  • Anonymous

    Skype has been successful by challenging the interests of mobile operators and traditional telcos. But Microsoft has close relationships with both. I wonder whether they’ll be willing to innovate on the Skype platform if operators start threatening not to support WP7 devices in retaliation.

  • Anonymous

    Skype has been successful by challenging the interests of mobile operators and traditional telcos. But Microsoft has close relationships with both. I wonder whether they’ll be willing to innovate on the Skype platform if operators start threatening not to support WP7 devices in retaliation.

  • Anonymous

    Skype has been successful by challenging the interests of mobile operators and traditional telcos. But Microsoft has close relationships with both. I wonder whether they’ll be willing to innovate on the Skype platform if operators start threatening not to support WP7 devices in retaliation.

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