We knew it was coming but now it’s official. Here’s the press release with the few important points highlighted for you and yes, they will continue to support Android and iOS:

REDMOND, Wash., and LUXEMBOURG – May 10, 2011 – Microsoft Corp. (Nasdaq: “MSFT”) and Skype Global S.à r.l today announced that they have entered into a definitive agreement under which Microsoft will acquire Skype, 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 Skype.

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 Skype’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, Skype 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.

Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms.

“Skype 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.”

Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Ballmer.

“Microsoft and Skype share the vision of bringing software innovation and products to our customers,” said Tony Bates. “Together, we will be able to accelerate Skype’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 Skype’s talented global workforce bringing its insights, ideas and experience to Microsoft,” Ballmer said.

Speaking on behalf of the investor group that sold Skype to Microsoft, Egon Durban, managing director of Silver Lake, said: “We are thrilled with Skype’s transformation during the period of our ownership and grateful for the extraordinary commitment of its management team and employees. We are excited about Skype’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, Skype was acquired by eBay in September 2005, and then acquired by an investment group led by Silver Lake in November 2009. Skype 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 include eBay International 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.

9 COMMENTS

  1. Expensive buy, but necessary…Imagine taking a Skype call on your Windows Phone then pushing it to your Kinect to continue the call when you enter the living room. Cool!!!
    All that’s left to buy/integrate is RIM’s BBM service.

  2. @Davidk: No guarantee those users will stick around once MS gets involved. Its looking more likely that this was just a move to stop competitors from buying skype and putting MS at a disadvantage but skype does not bring the kind of value that’s worth $8 billion.

  3. Guess that depends on how much Microsoft thinks they can earn in licensing/patent fees. All those antitrust lawyers are getting mighty bored about now. They need something new to sink their teeth into.

  4. i think skype is worth every penny of the 8 billion…. do you understand how many people in the world use skype? i work in the same town as middlebury college is in (a language school that primarily sees foreign students, and conversely usually they come to me to buy prepaid minutes)and almost everyone i see uses skype to make phonecalls back to thier home country, plus video calling…. you know how many soldiers use that? skype is a household name by now and thats worth 8 bil in my book (now if only i could put 8 bil in my book…)

  5. @efjay: Why wouldn’t they stick around? Where would they go to?

    Did MS overpay for Skype? Depends on what their plans are. IF MS is looking into being deeply integrated with their existing technology after this anti-trust matter is finally closed, then all the moves and ecosystems, codewords makes sense. IF they are just looking to nab the upstarts, then this is a dumb move. Personally speaking, I think they are looking to integrate everything so that they can be on par with Big G.

  6. Hmm, Skype and Qik integrated with facebook im still sounds like a winner to me. Not to mention, the opportunity to grow the brand via different OS’s that already support Qik and Skype (iOS and Android).

    I’m extremely curious to see what Apple has up their turtleneck sleeve

  7. @efjay: Yeah, the whole world just hates Microsoft. That’s why Live Messenger has 330 million users a month. It’s why 350 million Windows licenses have been sold. It’s why Kinect is the fastest select consumer electronics in history. It’s why Xbox and Xbox Live are raking in billions.

    C’mon man. Stop parroting internet nerds who think it’s cool to hate Microsoft. The vast majority of these idiots espouse their so-called hatred of Microsoft while using Windows and playing their Xbox. Their conviction is not all that strong.

    Nobody with any sense is going to leave Skype because Microsoft bought it, unless Microsoft royally screws it up.

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