Microsoft is about to close a $8 billion deal to purchase Skype, reports the Wall Street Journal. The deal, if true, would be one of the biggest Microsoft has ever done, and would strengthen its Web-based assets, putting the company in a better position to compete with Google and Apple.
The deal could be done as early as Tuesday, according to the unnamed sources cited in the report, though they also said talks could dissolve at any time. The value of the deal is estimated between $7 and $8 billion, but taking into account Skype's debt, the total price tag is said to be about $8.5 billion.
If the deal goes through, Microsoft would instantly have a strong property where the company has traditionally struggled—the Web. The majority of Microsoft's revenue comes from its Windows and Office software products, though its venture into console gaming with the Xbox platform has also been a success.
Skype, which has a user base of 124 million active users, is one of the most popular Internet communication services in existence. Since both audio and video calls are free between Skype users, it's used worldwide as both a personal and business connection tool. However, the Journal notes it's never achieved much in the way of profit in the eight years since its inception.
Microsoft may change all that by integrating Skype into its Lync software, which ties together email, instant messaging and voice communication for Microsoft Office. And packaging Skype as part of Windows could potentially increase Skype's user base greatly.
In any case, the fit with Microsoft appears better than Skype's ill-advised marriage with eBay. The auction site acquired Skype in 2005 and then didn't seem to know what to do with the service. After four years of dithering, eBay spun off the company in 2009.
Skype could prove invaluable to Microsoft as it moves aggressively into the mobile market, particularly now that 4G networks are emerging, which are more suited to video-chat services like Skype. With its own video-chat software for Windows Phone 7, Microsoft wouldn't need to rely on third parties to compete with services like Apple's FaceTime or Qik on Android.
Microsoft isn't the only company interested in buying Skype. Both Facebook and Google are said to have considered making a bid for the Luxembourg-based company. Skype isn't without its troubles, however; it was hit with its first major outage just before Christmas last year, crippling the service worldwide for days.
(source:pcmag.com)
(source:pcmag.com)