And its paying in cash, too. I guess that’s what happens when you’ve got the deep pockets of software giant Microsoft.
The deal, reported by WSJ as well as AllThingsD, was championed vigorously by Microsoft CEO Steve Ballmer, who feels “Skype is a phenomenal service that is loved by millions of people around the world.” He stated, “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.”
Certainly, Microsoft is getting a pretty horse for the price tag. Skype is a well established brand name with veritable equity attached. Microsoft will want to utilize this to the fullest.
However, with the acquisition, Microsoft will also be assuming all debt attached to Skype. Right now that’s close to $700 million.
But most importantly, beyond brand equity or financial matters, Microsoft is gaining access to Skype’s user base of 663 million. A little quick math tells us that means each registered user cost Ballmer’s company about $12.82. Seems like a pretty good deal when put in those terms.
Microsoft wasn’t the only one eyeing up the Internet phone company, either. Google, as well as Facebook, were among those with at least minor interest. In the end, though, it was Microsoft who went for the gusto. Skype will be integrated into the corporation via the creation of a new business division within Microsoft, to be headed up by Skype Chief Executive Tony Bates.
Now that the purchase, which goes down as Microsoft’s biggest ever, is done and has been officially announced, all the analysis and criticism will come gushing out the floodgates. Did it go for too much? Too little? Will Microsoft see a worthwhile return on investment?
Let us know what you think.