Microsoft has finalized the $8.5 billion acquisition of VoIP service Skype, initially announced in May 2011.
The deal had to pass regulatory approval in several markets, with Europe being the biggest hurdle for Microsoft. The EU Commission has previously fined Microsoft for antitrustbehavior.
Under the terms of the agreement, Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of that division.
Skype was founded in 2003 by Niklas Zennström and Janus Friis; it was acquired by eBay in 2005, but eBay couldn’t find a way to integrate it into its business and subsequently sold it to an investment group led by Silver Lake in 2009.
The $8.5 billion deal with Microsoft is a very profitable exit for that group of investors, which includes Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board — they paid $2.75 billion for Skype.
As for the future of Skype and the challenges Microsoft faces, the first and foremost will be the fact that Skype is not yet profitable. However, Skype’s huge user base (more than 663 million users, 170 million of which use the service monthly) and constant growth make it an appealing purchase for a company that knows what to do with it.
“Together, we will be able to accelerate Skype’s goal to reach 1 billion users daily,” said Bates in a statement. Check out his comment on the acquisition in the video below.
