Microsoft Buying Video Chat Pioneer Skype

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An agreement has just been announced under which Microsoft will acquire Skype, the company that has brought free video chatting to millions of consumers. This will bring a version of Skype to Windows Phone, as well as other Microsoft products.

Skype on the Motorola DroidWhenever a small company with a cross-platform service is gobbled up by a much larger enterprise that produces an operating system — whether it’s Microsoft, Apple, Nokia, or Google — it always raises questions about whether the versions of the service for other platforms are going to be discontinued. This morning’s statements said explicitly, “Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms,” so there will continue to be new versions of Skype for the Apple iOS, Google Android OS, and other platforms.

Apple has already created its own video-conferencing app for the iPhone and iPad called FaceTime, and Google has begun adding video chat support to Android. Nevertheless, Skype is among the most popular apps for smartphones of all types.   

Business Details
A few eyebrows have been raised in financial circles about the amount Microsoft paid for Skype: $8.5 billion in cash. In recent weeks there have been unconfirmed reports that both Google and Facebook were interested in buying the company, and a bidding war may have driven up the price. 

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 Steve Ballmer.

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