Europe Approves Microsoft Takeover of Skype
Microsoft has been given approval by European authorities for their US$8.5 Billion acquisition of Skype.
Skype is an internet phone service with over 650 million global users. Skype allows free calls to other Skype users but charges for traditional land line and mobile phone calls.
Reports has it that the 8 year old Luxembourg-based company has been struggling to turn a profit.
For a company valued at US$2.6 Billion less than five years ago, questions whether the US$8.5 Billion Microsoft paid for the company is justified. Microsoft sure can afford the price but it does put additional stress on proving that the deal is lucrative for them.
In 2006, eBay bought Skype for $2.6 billion in 2006, before selling 70% of it in 2009 for $2 billion to a group of investors led by private equity firms Silver Lake and Andreessen Horowit.
Skype will become a new division within Microsoft where current Skype chief executive Tony Bates will still continue to lead the business. He will be reporting directly to Microsoft head honcho, Steve Ballmer.
It is speculated aside from it's current use, Skype can open up a lot of opportunities for Microsoft. Skype can be integrated into Microsoft's X-Box,their Windows PC operating systems and in their Windows Phone devices.