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You are hereNewsMicrosoft buys Skype for $8.5 billion

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Microsoft buys Skype for $8.5 billion

Analysts have suggested that Microsoft has purchased Skype to improve its video conferencing services.

11 May 2011 | Category: Online

Software giant Microsoft has outbid Google and Facebook for the Internet telecommunications company Skype.

Microsoft purchased the Luxembourg based company for $8.5 billion making it their biggest ever company acquisition. It is thought that both Google and Facebook had made bids, but that Microsoft made the largest financial offer.

Some analysis have suggested that this is Microsoft's attempt to enhance their video conferencing capabilities. They also say this is a move to beef up the company's consumer products.

Steve Ballmer Microsoft's chief executive said they will continue investing into Skype and non-Microsoft platforms. It's also said that they are planning to integrate Skype into other Microsoft products like Windows phones, outlook, and Xbox. Ben Horowitz, a co-owner of Skype, stated that the acquisition of Skype by Microsoft could give them a competing edge to battle Google and Appleā€™s iPhone Video chat.

Skype has however posted sizable losses over the past few years and many feel that Microsoft may have well paid too much for a company that had been struggling financially.

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