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Microsoft buys Skype for $8.5b for Xbox, Windows Phone

updated 08:30 am EDT, Tue May 10, 2011

Microsoft makes Skype buyout official

Microsoft on Tuesday confirmed rumors and said it would buy Skype for $8.5 billion. The mutually approved deal will see Skype's voice and video chat help out platforms like the Xbox 360 and its Kinect camera as well as Windows Phone. Outlook and Microsoft's corporate communication system Lync would also get help, Microsoft said.

The Windows developer insisted it would still "invest in and support" Skype for non-Microsoft platforms. Skype chief Tony Bates would head up a new group inside Microsoft, the Skype Division, and would talk directly to Microsoft CEO Steve Ballmer.

Government approval for the deal is expected before the end of 2011.

Microsoft's acquisition is its largest to date and has already drawn criticism for the potential impact it could have on voice over IP. Despite its promises, Microsoft would have a financial interest in discouraging support for Android, iOS, and the Mac. It might also prefer to support the Xbox 360 over built-in Skype support in TVs from Panasonic and others.



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By Electronista Staff
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Comments

  1. AlenShapiro

    Fresh-Faced Recruit

    Joined: Apr 2000

    +24

    The beginning of the end...

    The beginning of the end for Skype & cross-platform telephony on the Mac & iOS. Oh well, it was nice while it lasted. They (Skype) were finally getting their act together. I guess it was mostly a last push so they would look like a good deal for purchase. Now that the pressure is off and µ$oft have management oversight I expect it to go the way of Bungie/Halo, Foxbase etc. etc.

  1. starwarrior

    Fresh-Faced Recruit

    Joined: Mar 2006

    +6

    Lost the Bubble

    I have. These moves are unbelievable. What is going on?

  1. Cronocide

    Fresh-Faced Recruit

    Joined: Nov 2010

    +10

    Goodbye, Skype

    Us mac users wont miss your (lack of) service.

  1. facebook_Timothy

    Via Facebook

    Joined: May 2011

    +14

    MSkype

    Everything Microsoft touches turns to dust. Skype made long distance calling a breeze and allowed our family to cut the landline altogether. Skype on the iPhone and on Android have replaced our cordless phones. Companies like Jabra were finally coming to market with dual purpose (PC/Cell) Skype certified bluetooth handsfree devices. And now, this happens!

    Ugh. It just makes me sick to my stomach. This move is about control and squashing competition. You think M$ is going to "Play Fair"? Ha! The first thing they will do is re-brand and re-license Skype and require the cell carriers to license its technology for use on their handsets. Expect Windows Mobile to be the only platform to offer a truly integrated Skype experience.

    Time to start looking at other options I guess. Are there any?

  1. JeffHarris

    Fresh-Faced Recruit

    Joined: Oct 1999

    +2

    How long...

    Before M¢ kills the mac version. Skype certainly hasn't done a great job as far as feature parity goes, certainly. M¢ will do far worse.

    Just look what the did to iView Media Pro!

  1. coffeetime

    Mac Enthusiast

    Joined: Nov 2006

    +9

    Yeah...right

    that really is going to make me buy WinPhone.... NOT! This gives an opportunity for others to take Skype place. And also why the heck in the world would I use Xbox to make a phone/video phone call? Especially in the middle of playing a video game? What's next, doing spreadsheet on Xbox?

  1. iphonerulez

    Dedicated MacNNer

    Joined: Nov 2008

    +5

    That's an awful lot of money to toss around

    but if Microsoft can use it to help Nokia get back on track, it might be worth it. Nokia phones had video-conferencing hardware a long time ago, but the software was rather awkward to use. Maybe now they'll become very adept video-conferencing devices and with a high user base it may catch on quite well. It may also be a good blocking move by Microsoft to help cripple other competing platforms. Nice move but a rather expensive one. I guess Wall Street wishes that Apple was a big spender like Microsoft.

  1. RoguePixel

    Fresh-Faced Recruit

    Joined: Apr 2011

    +2

    I won't miss you

    Unfortunately with each release Skype got worse, call quality was ok but image wise it was terrible and it got bloated.. their last efforts to revamp the interface and I agree with AlenShapiro were to look like a good deal for purchase. fortunately I switched to Facetime and I use it all the time, nice simple interface just needs 3G connection, but I'm happy with it.

  1. ebeyer

    Fresh-Faced Recruit

    Joined: Jun 2004

    +1

    Open source

    Time to visit with one of the open source alternatives? But I don't think any of them let you do multi-party calling.

  1. nat

    Junior Member

    Joined: Mar 2002

    +3

    c***

    i don't believe for a minute that this is in any way good for users of non ms products no matter how bad skype has been on the mac.

    i pay $36 a year for a skype phone number (going on 7 years now) and make free calls to u.s. and canada. it's my business number. bad or not it has always worked (save for that one big outage).

    and i have friends in europe i frequently talk with. skype is huge overseas.

    what are the alternatives? are there any?

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