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Science & Tech

Microsoft buys Skype for $8.5 billion

Published on: May 10, 2011 at 7:55 AM ET
Kim LaCapria
Written By Kim LaCapria
News Writer

After some speculation that Microsoft and Facebook were both vying to purchase VoiP property Skype, the former has plunked down $8.56 billion in cash to purchase the service.

Skype is Microsoft’s priciest acquisition to date, beating out the 2007 purchase of ad firm aQuantive in 2007, a deal that rang in at $6 billion. Microsoft already operates Windows Live Messenger with a significant userbase, and while Skype’s 124 million active users per month is far smaller than Windows Live Messenger’s 330 million, 8 million Skype users pay for their service.

After critiquing how Skype’s software is structured, Wired points out some interesting math about the paying customers:

Even the access to paying customers is hard to justify. The terms of the deal mean that for each Skype customer, Microsoft is paying about $1,000. And on average, those customers are worth a profit of about $30, presuming most of Skype’s income comes from subscriptions and call charges. That’s a huge disparity.

In a joint statement with Microsoft, Skype CEO Tony Bates said:

“Microsoft and Skype share the vision of bringing software innovation and products to our customers… Together, we will be able to accelerate Skype’s plans to extend our global community and introduce new ways for everyone to communicate and collaborate.”

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