Microsoft buys Skype: Outmaneuvers Facebook & Google

Microsoft is buying Skype for $8.56 billion in cash. The Skype story:

  • Skype has 663 million users (more than Facebook)
  • 2003 Skype founded by Niklas Zennstrom and Janus Friis in Estonia
  • 2005 Skype purchased by eBay  for $2.6 billion
  • 2009 eBay sells 70% of Skype to Silver Lake for roughly $2.1 billion
  • 2011 Silver Lake sells eBay for $8.65 billion to Microsoft

As recent as this week Google and Facebook had been rumored to possible partner to purchase Skype and obtain access to the 663 million Skype users.  In this instance Microsoft appears to have outmanuevered them; however the price tag was certainly hefty.  This acquisition is the biggest purchase in Microsoft history; surpassing $6 billion paid for advertising firm aQuantive in 2007.

The big winner is private equity firm Silver Lake who in 2009 only paid north of $2 billion dollars and 18 months later reaps a profit, along with eBay who still owned 30%, in excess of $6 billion.

The billion dollar question is will Skype’s 663 million users be winners or losers.  Personally, as a heavy user of Skype for video between grandchildren and grandparents I hope we remain winners.

Recommended book: Idea Man: A Memoir by the Cofounder of Microsoft

About the Author: Erik Qualman

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