Microsoft Buys Skype for $8.5 Billion

Microsoft is acquiring Skype for $8.5 billion in cash from an investment group headed by Silver Lake, which purchased the company from eBay in 2009. Skype was founded in 2003 and acquired by eBay in 2005.

“The acquisition will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities,” the companies said in a joint statement.

Skype currently has 170 million connected users who consumed some 207 billion minutes of voice and video conversations in 2010, the companies said.

Microsoft’s previous largest investment was the purchase of online advertising firm aQuantive in 2007 for roughly $6 billion.

The company also made an unsolicited bid for then-search competitor Yahoo — now search partner — for $44.6 billion in 2008. That hostile takeover attempt ultimately was scotched by Yahoo’s board, and Microsoft later negotiated a deal whereby Yahoo’s sites are now underpinned by Microsoft’s Bing search infrastructure.

Bates will become president of Microsoft’s new Skype division and report directly to Ballmer.

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Microsoft’s Biggest Buy: Skype for $8.5 Billion

Stuart J. Johnston is a contributing editor at, the news service of, the network for technology professionals. Follow him on Twitter @stuartj1000.

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