Microsoft announced on Tuesday the acquisition of Skype.
The software giant announced the deal on Tuesday, valued at $8.5 billion cash. Both Skype and Microsoft’s board of directors have approved the deal and Microsoft will create a new business division especially for Skype. Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Ballmer.
“Skype is a phenomenal service that is loved by millions of people around the world,” said Microsoft CEO Steve Ballmer. “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.”
Microsoft says Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms. “Tony Bates has a great track record as a leader and will strengthen the Microsoft management team. I’m looking forward to Skype’s talented global workforce bringing its insights, ideas and experience to Microsoft,” Ballmer said.
Skype currently has 170 million connected users and saw over 207 billion minutes of voice and video conversations in 2010 alone. Microsoft’s promise for Windows Phone, Xbox and Kinect Skype integration confirms that the company will look to use Skype broadly across its products. Skype was originally founded in 2003 and acquired by eBay in September 2005. An investment group led by Silver Lake acquired Skype in 2009. Speaking on behalf of the investor group that sold Skype to Microsoft, Egon Durban, managing director of Silver Lake, said: “We are thrilled with Skype’s transformation during the period of our ownership and grateful for the extraordinary commitment of its management team and employees. We are excited about Skype’s long-term future with Microsoft, as it is poised to become one of the world’s most dynamic and comprehensive communications platforms.”