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Microsoft tricked into overbidding for Skype by $4.5b?

updated 11:05 am EDT, Tue May 10, 2011

Microsoft believed overpaying for Skype by 4.5b

Microsoft's $8.5 billion purchase of Skype may have been the result of it being fooled into paying more. Multiple tips claimed Tuesday that Google was bidding but had stopped at $4 billion, less than half what Microsoft paid. TechCrunch was told that Facebook had never been in competition and, while not intentional, ended up convincing Microsoft it had to bid more to stay in the running.

So far, Microsoft isn't known to have heard Google's last bid and may have only seen both public rumors and basic information that Google and Facebook were possibly involved.

Why Microsoft was so willing to spend money isn't apparent, though speculation has mounted that the company is not just hoping for a consistent voice and video chat system across Windows, Windows Phone, and the Xbox, but to trump Apple and Google in mobile communication. Skype would give Microsoft a more universal and full-features alternative to Apple's FaceTime and the option of producing a Google Voice clone.

Microsoft CEO Steve Ballmer is also known to have a personal obsession with beating Google at all costs. The executive willingly loses hundreds of millions of dollars each quarter in online efforts to support Bing, Azure, and other cloud efforts targeted at Google. If aware of Google's involvement in the bidding process, Ballmer may have bought Skype partly to keep it out of Google's hands.

By Electronista Staff


  1. blshaw

    Fresh-Faced Recruit

    Joined: Feb 2010


    Another Ballmer triumph!

    This guy is GOOD!! Freekin' genius. NOT. But then, it's not his money, is it?

  1. climacs

    Mac Enthusiast

    Joined: Sep 2001


    HA, HA!


  1. markspturvin

    Fresh-Faced Recruit

    Joined: Feb 2011


    Hey, Ballmer...

    Google is interested in buying my jockstrap. How much are you willing to pay me to keep it out of their hands? $500 million? Cause I just heard them whisper that they're willing to pay $750 million for it!

  1. qazwart

    Fresh-Faced Recruit

    Joined: Apr 2001


    Microsoft has the money

    Money isn't an issue with MS. They have 8 billion gathering dust in a bank vault. They may have simply decided to end the bidding nonsense and pay whatever it took to guarantee this acquisition.

    This is a very, very valuable acquisition for Microsoft. With Skype, they can get an integrated way of IP chatting/video in a way that FaceTime can't yet do. Plus, they have tens, if not hundreds of millions of users.

    My worry is whether Microsoft will blow it like they did with Danger. Will the Windows team insist that the infrastructure must be moved to Windows? Will they drive away the technical talent away? Will users abandon the system due to problems and other issues which will allow Facebook to build their own IP Chat/Video system.

    Microsoft does not have a good track record of acquiring properties and integrating them into their environment.

  1. makesense

    Fresh-Faced Recruit

    Joined: Feb 2007


    down down down

    Balmer keeps kicking MS down

    MS investors should revolt

  1. Blairmc

    Fresh-Faced Recruit

    Joined: Sep 2003


    This might be the turning point

    If we are reading this then so are the investors and board members. What with so much negative press regarding Ballmer and now this ridicule the Board members might take this opportunity to fire him, casting Microsoft in a more positive light.

  1. vintagegeek

    Fresh-Faced Recruit

    Joined: May 2007



    Let the rumors and speculation begin.

  1. sammaffei

    Fresh-Faced Recruit

    Joined: Sep 2004


    The problem is...

    I'm not too sure the enemy of my enemy is my friend.

  1. blueskymactech

    Fresh-Faced Recruit

    Joined: Apr 2010


    Oh no

    Skype was such a good program. I expect it to degrade now that Microsoft has it's hands on it.

  1. loudpedal

    Forum Regular

    Joined: Oct 1999


    Look at the dude in the picture

    On the news feed, the dude in the picture looks like he's saying, "You paid HOW much for Skype???"

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