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Microsoft closes $8.5-billion purchase of Skype

October 14, 2011 |  6:02 pm

Skype

Skyperosoft is a reality -- Microsoft has completed its $8.5-billion purchase of Skype, officially making the deal Microsoft's largest takeover to date.

The tech giant's biggest prior acquisition was its $6-billion deal for aQuantive, an online advertising firm, in 2007.

The boards of directors of Microsoft and Skype previously approved the all-cash acquisition. So did the Federal Trade Commission as well as other international antitrust agencies.

"Skype is a phenomenal product and brand that is loved by hundreds of millions of people around the world," said Microsoft CEO Steve Ballmer in a statement. "We look forward to working with the Skype team to create new ways for people to stay connected to family, friends, clients and colleagues -- anytime, anywhere."

Skype CEO Tony Bates will become president of a new Skype division at Microsoft, reporting directly to Ballmer. Skype was founded in 2003, bought by eBay in September 2005, then taken over by an investment group led by Silver Lake in November 2009 for about $2 billion.

"The Skype division will continue to offer its current products to millions of users globally," Microsoft said. "Longer term, Skype will also be integrated across an array of Microsoft products to broaden Skype's reach and accelerate its growth as a fundamental way people communicate online. Skype employees will continue to be located around the world in offices including Estonia, the Czech Republic, Russia, Sweden, the United Kingdom, Luxembourg, Japan, Singapore, Hong Kong, and the United States."

Bates said the combination of Microsoft and Skype "will be able to accelerate Skype's goal to reach 1 billion users daily."

Skype's software is used by about 170 million people each month on PCs, tablets, smartphones and even home TVs, enabling users to talk by either voice or video over the Web for free, though for a fee calls can be placed to land lines and cellphones.

RELATED:

Skype buys GroupMe group-texting service

Microsoft's takeover of Skype approved by FTC

Bill Gates says he pushed for Microsoft to buy Skype

-- Nathan Olivarez-Giles

Twitter.com/nateog

Photo: Makeup artist Chris Scott video chats with a friend on Skype last year. Credit: Al Seib/Los Angeles Times

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