Microsoft purchases Skype for $8.5 billion

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Date: Tuesday, May 10th, 2011, 04:26
Category: News, Software

skypelogo.jpg

You’ve got to admit, Skype does have its uses.

And companies tend to see this.

According to Fortune, Microsoft has agreed to buy the voice-over-Internet company for US$8.5 billion, including the assumption of debt.

There had been reports last week that Skype was in acquisition or partnership talks with both Microsoft and Facebook.

Skype will become a new business unit within Microsoft, to be run by current Skype CEO Tony Bates, who will report directly to Microsoft boss Steve Ballmer.

Luxembourg-based Skype began life as a VC-backed company, before being acquired by eBay (EBAY) for US$2.6 billion in 2005. The combination didn’t pan out as expected, and eBay gave public thought to either selling the unit outright or spinning it off into an independent public company. In November 2009, it agreed to sell a 65% stake in Skype for US$1.9 billion to an investor group that included Silver Lake Partners, Andreessen Horowitz, Canada Pension Plan Investment Board and Index Ventures (the 7th-largest leveraged buyout of 2009).

Skype then filed for a US$100 million IPO last August. The company reported a US$6.9 million net loss in 2010, on nearly US$860 million in revenue. It reported just US$686 million in long-term debt, and just over US$1 billion in liabilities.

Stay tuned for additional details as they become available.

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