Microsoft agrees to buy Skype for $8.5 billion

After rumors of a deal with Google or Facebook, it's Microsoft that has scooped up Skype

Microsoft has agreed to buy Skype for $8.5 billion, the companies announced Tuesday.

The companies' CEOs, Steve Ballmer and Tony Bates, will host a press conference later today to give details of the acquisition.

Over the last week, the voice and video communications company had been rumored to be discussing an acquisition or partnership with Cisco, Facebook and Google.

Founded by Niklas Zennstrom and Janus Friis, Skype was bought by eBay in 2005. After that company failed to figure out how to integrate it with its online auction business, it sold a majority stake to an investment consortium including its founders and Silver Lake.

Skype made a name for itself offering free voice calls from PC to PC, charging to connect calls between PCs and the public telephone network. Later it added video chat and, more recently, software clients for smartphones.

Microsoft offered a similar PC-to-phone service for consumers under the Windows Live Call brand, and continues to offer PC-to-PC text, voice and video chat with its Windows Live Messenger service.

Skype and Microsoft also target businesses with their communications offerings. Microsoft has a server-based unified communications tool that connects PCs to a PBX to offer VoIP calling, instant messaging and videoconferencing. Previously called Communications Server, it is now branded Lync, while Lync Online is a cloud-based service offering similar functionality. Skype Connect, meanwhile, is a service that allows businesses to connect their PBX to Skype to handle incoming and outgoing calls. A management tool, Skype Manager, allows businesses to control call costs.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags Microsoftbusiness issuesskypetelecommunicationMergers / acquisitions

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Peter Sayer

IDG News Service
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?