Microsoft buys Skype

It has been announced that Microsoft Corporation had acquired Skype Communications today, May 10th 2011. Microsoft paid US$8.5 billion for Skype. The company has been incorporated as a division of Microsoft, called “Microsoft Skype Division”. Microsoft will acquire all of the company’s technologies, including Skype, with the purchase.

Skype was founded in 2003 by Swedish entrepreneur Niklas Zennström and Dane Janus Friis, and was initially released as a simple computer-to-computer, or computer-to-telephone program.

In a deal that took about a month from offer to signing, the software company outbid competitors Google and Facebook, which sources said offered to partner or buy Skype for $3 billion to $4 billion. They planned to use the provider of Internet telephone services to keep users glued to their online communities.

Microsoft’s interest in the popular service highlights a need to gain new customers for its Windows and Office software. Skype has 145 million users worldwide on average each month and has gained favor among small business users.

Microsoft Stocks went up from 25.40 to 25.70 intraday, after the purchase was announced, and further gains are expected for the rest of the week.