Tuesday, May 10, 2011

Microsoft to Buy Skype for $8.5 Billion to Add Web Calls - Businessweek

Microsoft to Buy Skype for $8.5 Billion to Add Web Calls - Businessweek

Microsoft Corp. agreed to buy Skype Technologies SA for $8.5 billion, using a growing cash pile to gain the world’s most popular Web-calling service and help it catch up in online and mobile advertising.

Microsoft will acquire Luxembourg-based Skype, with 170 million active users, from investors led by private equity firm Silver Lake, the companies said in a statement today. The deal will add to Microsoft’s profit in the year after it closes, Chief Executive Officer Steve Ballmer said in an interview.

The takeover may help Ballmer lure Skype users to Microsoft’s phones and software and narrow Google Inc.’s lead in Internet advertising. Redmond, Washington-based Microsoft will connect Skype to its Outlook e-mail, Xbox game console, Windows mobile phones and corporate-phone software. The acquisition, Microsoft’s largest, is also the biggest Internet takeover in more than a decade.

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