There were rumors flying around yesterday that Microsoft was putting a deal together to swallow, and it’s now official. Microsoft has acquired for $8.5 billion. Why would MS do such a thing? Simple, to place video and calling support deep within Xbox, Kinect and Windows Phone architecture, and thus giving them an edge on these popular, and ever increasing in demand features. has made a few headlines of their own earlier this year and end of last with the joining of Qik, integration with devices and new updates for iOS and Android devices.
I’m curious to see how Microsoft continuesdevelopment and updates for the competing platforms with iOS and Android seeing as they now own the app that many use outside of WP7. Interesting to say the least. Nice of them to announce this on opening day of Google I/O too…stealing Google press thunder. Well-played Ballmer, well-played.
Microsoft to Acquire
Combined companies will benefit consumers, businesses and increase market opportunity.
REDMOND, Wash., and LUXEMBOURG – May 10, 2011 – Microsoft Corp. (Nasdaq: “MSFT”) andGlobal S.à r.l today announced that they have entered into a definitive agreement under which Microsoft will acquire , the leading Internet communications company, for $8.5 billion in cash from the investor group led by Silver Lake. The agreement has been approved by the boards of directors of both Microsoft and .
The acquisition will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities. The combination will extend‘s world-class brand and the reach of its networked platform, while enhancing Microsoft’s existing portfolio of real-time communications products and services.
With 170 million connected users and over 207 billion minutes of voice and video conversations in 2010,has been a pioneer in creating rich, meaningful connections among friends, families and business colleagues globally. Microsoft has a long-standing focus and investment in real-time communications across its various platforms, including Lync (which saw 30 percent revenue growth in Q3), Outlook, Messenger, Hotmail and Xbox LIVE.
will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support clients on non-Microsoft platforms.
“is a phenomenal service that is loved by millions of people around the world,” said Microsoft CEO Steve Ballmer. “Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”
will become a new business division within Microsoft, and CEO Tony Bates will assume the title of president of the Microsoft Division, reporting directly to Ballmer.
“Microsoft andshare the vision of bringing software innovation and products to our customers,” said Tony Bates. “Together, we will be able to accelerate ‘s plans to extend our global community and introduce new ways for everyone to communicate and collaborate,” Bates said.
“Tony Bates has a great track record as a leader and will strengthen the Microsoft management team. I’m looking forward to‘s talented global workforce bringing its insights, ideas and experience to Microsoft,” Ballmer said.
Speaking on behalf of the investor group that soldto Microsoft, Egon Durban, managing director of Silver Lake, said: “We are thrilled with ‘s transformation during the period of our ownership and grateful for the extraordinary commitment of its management team and employees. We are excited about ‘s long-term future with Microsoft, as it is poised to become one of the world’s most dynamic and comprehensive communications platforms.”
Founded in 2003,was acquired by in September 2005, and then acquired by an investment group led by Silver Lake in November 2009. has made impressive progress over the past 18 months under Silver Lake’s leadership, increasing monthly calling minutes by 150 percent, developing new revenue streams and strategic partnerships, acquiring the intellectual property powering its peer-to-peer network, and recruiting an outstanding senior management team.
Other members of the selling investor group led by Silver Lake includeInternational AG, CPP Investment Board, Joltid Limited in partnership with Europlay Capital Advisors; and Andreessen Horowitz.
The acquisition is subject to regulatory approvals and other customary closing conditions. The parties hope to obtain all required regulatory clearances during the course of this calendar year.
is communications software whose purpose is to break down barriers to communication. With an Internet-connected device, families, friends and colleagues can get together for free with messaging, voice and video. At low cost, they can also call landlines or mobiles virtually anywhere in the world. has recently introduced group video, allowing groups of more than two people to do things together whenever they’re apart.
Founded in 2003 and based in Luxembourg.can be downloaded onto computers, mobile phones and other connected devices for free.
[Via – Engadget]