Microsoft closing in on Skype deal?

The Redmond giant is reportedly set to splash around $8 billion on money-losing Skype.

Skype

Microsoft is close to securing a deal to buy Skype for as much as $8 billion (4.9 billion), according to a report.

The acquisition could be announced today, although may still fall through as negotiations have not been finalised, the Wall Street Journal reported, citing people familiar with the matter.

Advertisement - Article continues below

The overall value of the deal would include clearance of Skype's long-term debt, which stands at around $686 million, meaning Microsoft would pay out close to $8.5 billion.

Microsoft and Skype declined to comment on a potential deal.

Many have questioned Microsoft's motives, with some pointing to its rivalry with Google and the Redmond giant's desire to have a big name brand on the web.

Google remains the dominant force on the internet, with around 90 per cent search market share here in Europe, although over in the US Microsoft's Bing has made some gains over its rival.

There have been suggestions Microsoft could roll Skype into its Kinect technology as well, for a potentially new take on videoconferencing.

The firm could be looking to make a bigger play in the mobile space as well, having recently hooked up with RIM to have Bing as the default search engine in BlackBerrys.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

Microsoft has video conferencing functionality within Lync and Windows Live Messenger, but lacks video calling capability in Windows Phone 7.

"With Apple FaceTime - a competitor to Skype - now available on the Mac, iPhone 4, iPad 2 and the new iPod touch, it is definitely now or never for Microsoft," said Ovum principal analyst Richard Edwards.

"There are other products and companies out there that offer a much better fit architecturally than Skype (and they come with a much cheaper price tag too), but Skype is undoubtedly the product Microsoft needs to stay in the game."

Despite others' reservations, Edwards concluded a Skype acquisition would be a good fit for Microsoft's business model.

"It's popular, it runs on Windows PCs, and later this year it will be available on Windows Phone 7," he added.

"Perhaps more importantly for the rest of us, Skype also runs on other computers, such as Mac and Linux, and mobile phones too, such iPhone and Android-based devices."

Advertisement - Article continues below

Various tech giants, including Facebook and Google, were reportedly courting Skype.

According to a Reuters report, citing a source with direct knowledge of discussions about a potential Skype sale to Facebook or Google, a deal would have been valued at $3 billion to $4 billion.

The VoIP firm was under the control of eBay until 2009 when the retail giant sold a 65 per cent stake in the company to a venture capitalist group.

If the Microsoft deal does go through, it would be the firm's biggest acquisition to date.

Featured Resources

The case for a marketing content hub

Transform your digital marketing to deliver customer expectations

Download now

Fast, flexible and compliant e-signatures for global businesses

Be at the forefront of digital transformation with electronic signatures

Download now

Why CEOS should care about the move to SAP S/4HANA

And how they can accelerate business value

Download now

IT faces new security challenges in the wake of COVID-19

Beat the crisis by learning how to secure your network

Download now
Advertisement

Recommended

Visit/mobile/google-android/355837/arizona-files-lawsuit-against-google-for-illegally-tracking-android
Google Android

Arizona files lawsuit against Google for illegally tracking Android users’ locations

29 May 2020
Visit/network-internet/email-providers/355822/gmail-introduces-new-features-to-makes-personalizing-your
email providers

Gmail introduces new features to makes personalizing your inbox easier

28 May 2020
Visit/mobile/google-android/355804/google-confirms-users-can-make-purchases-via-voice-match-feature
Google Android

Google Assistant can now verify payments using your voice

27 May 2020
Visit/mobile/google-android/355770/google-maps-celebrates-global-accessibility-awareness-day-with
Google Android

Google Maps celebrates Global Accessibility Awareness Day with Accessible Places

22 May 2020

Most Popular

Visit/server-storage/network-attached-storage-nas/355849/western-digital-sneaked-inferior-smr-tech-into
network attached storage (NAS)

Western Digital accused of sneaking inferior SMR tech into NAS drives

1 Jun 2020
Visit/security/data-breaches/355777/easyjet-faces-class-action-lawsuit-over-data-breach
data breaches

EasyJet faces class-action lawsuit over data breach

26 May 2020
Visit/operating-systems/microsoft-windows/355812/microsoft-warns-against-installing-windows-10-may-2020
Microsoft Windows

Microsoft warns users not to install Windows 10's May update

28 May 2020