Microsoft's $8.5B Skype acquisition moves it into competitive position in converged IP space

Microsoft (Nasdaq: MSFT) has pulled the trigger on an $8.5 billion deal--its largest acquisition ever--to acquire VoIP (Voice over IP) provider Skype.

The software giant will integrate Skype into its Xbox and Kinect devices, Windows phone and other Windows services, including Microsoft Office. It said it will also invest in and support Skype clients on non-Microsoft devices.

According to a news release, 170 million connected Skype users logged over 207 billion minutes of voice and video conversations in 2010. Only a fraction of those users, however, pay to connect Skype calls to telephones, which has made for a business model where Skype earned $860 million in 2010 but lost $6.9 million overall.

Microsoft CEO Steve Ballmer, credited with making the deal happen, said that the two companies "will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world."

Owning and controlling Skype will no doubt help Microsoft compete with leaders Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG) in the quickly converging voice, video and data IP space.

For more:
- see this news release
- Mashable has this story 

Breaking: Microsoft pays $8.5 billion to acquire VoIP provider Skype

Related articles:
Rumor: Microsoft poised to buy Skype for $8.5 billion
Skype: No plans for Windows Phone 7?

Suggested Articles

Check out our updates on third-quarter results for streaming media companies, programmers, pay TV operators and broadcasters.

Charter has found another media ally in its fight against online video piracy, enlisting Fox to fight online video piracy and password sharing.

Comscore also today announced that it will be the measurement provider for Tegna’s Premion local OTT ad service.