Update: Microsoft agrees to buy Skype for $8.5 billion
CEOs Steve Ballmer and Tony Bates will host a press conference later Tuesday to give details (video below)
IDG News Service - Microsoft has agreed to buy Skype for $8.5 billion, the companies announced Tuesday.
The companies' CEOs, Steve Ballmer and Tony Bates, will host a press conference later Tuesday to give details of the acquisition.
The boards of both companies have agreed to the deal, which will see Bates reporting directly to Ballmer as president of the Microsoft Skype division, illustrating the importance of the deal to the company.
Once the merger is complete, Microsoft plans to add Skype support to its Xbox and Kinect gaming devices and Windows Phone mobile operating system, and connect Skype users with its own Lync, Outlook and Xbox Live communications services.
Over the last week, the voice and video communications company had been rumored to be discussing an acquisition or partnership with Cisco, Facebook and Google.
Founded by Niklas Zennström and Janus Friis, Skype was bought by eBay in 2005. After that company failed to figure out how to integrate it with its online auction business, it sold a majority stake to an investment consortium including its founders and Silver Lake in 2009.
Skype made a name for itself offering free voice calls from PC to PC, charging to connect calls between PCs and the public telephone network. Later it added video chat and, more recently, software clients for smartphones.
Microsoft offered a similar PC-to-phone service for consumers under the Windows Live Call brand, and continues to offer PC-to-PC text, voice and video chat with its Windows Live Messenger service.
Skype and Microsoft also target businesses with their communications offerings. Microsoft has a server-based unified communications tool that connects PCs to a PBX to offer VoIP calling, instant messaging and videoconferencing.
Previously called Communications Server, it is now branded Lync, while Lync Online is a cloud-based service offering similar functionality.
Skype Connect, meanwhile, is a service that allows businesses to connect their PBX to Skype to handle incoming and outgoing calls. A management tool, Skype Manager, allows businesses to control call costs.
Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at email@example.com.
- 'Nadella Effect' makes Ballmer $2.8B richer
- Microsoft reveals bankruptcy of devices strategy by dumping Nokia feature phones
- Microsoft may drag out layoffs for a year
- Surface survives Microsoft cuts, but tablet strategy remains muddled
- As it lays off workers, Microsoft also kills its low-end Nokia X smartphones
- How Microsoft announces layoffs will show the company's PR IQ
- Why Microsoft isn't spooked by the Apple-IBM alliance
- Microsoft boosts OneDrive storage to free terabyte
- Microsoft plans price war to stymie Chromebook growth
- Microsoft gets real, admits its device share is just 14%
- Software Asset Management: Ensuring Today's Assets Today's trends like BYOD and SaaS are new and exciting in terms of how they will help make our jobs more productive but...
- Stop Guessing, Start Measuring: How to Use Mobile Analytics to Deliver the Best App ROI This interactive e-book investigates how mobile is driving the need for app and portfolio measures unlike any we saw in the days of...
- APIs & MBaaS: How to Extend Your Enterprise Architecture for a Mobile World "Mobile," as Forrester Research observes, "is pushing aging web architectures to the brink." Download this whitepaper and learn how each of these requirements...
- Three Principles of the Mobile Era or Mastering the Mobile Shift: Three Keys to the New Enterprise In this whitepaper, you will learn the tools, technologies and strategies that are necessary for a mobile-ready IT to master the 3 keys...
- It's not too late...Get Your Mobile Questions Answered Live! How can IT provide seamless and secure mobile communications and collaboration for all? Join this live Webcast as IDG asks an expert panel...
- Why do you need an enterprise mobile platform? Today companies must offer great apps that run on a range of devices, and connect to an exploding set of backend data. Appcelerator... All Mobile/Wireless White Papers | Webcasts