May 10, 2011 at 12:33 Why Microsoft buys Skype for $ 8.5 billion
- Transfer
Updated at 9:00 Moscow time: Microsoft bought Skype for $ 8.5 billion. The deal closed a few hours ago. The Wall Street Journal confirmed the news after we first reported it yesterday . An official statement, according to different versions, should follow today later or tomorrow morning. Steve Ballmer, Microsoft's chief executive, is considered the main person behind this deal, the largest in the company's history. In a few hours, Ballmer and Skype CEO Tony Bates will hold a press conference.
Skype has been offered for sale several times thanks to some very nervous investors.. My sources say that both eBay and Silver Lake Partners were nervous about the delay in listing and tried to initiate a Skype sale. Previously it was reported that negotiations are ongoing with Facebook and Google, and Microsoft appeared later and is now close to picking up the main prize.
I won’t be surprised if Microsoft will be severely criticized for the decision to buy Skype - and a software company can always ruin everything, as it often did after buying other companies. The Skype development team is also full of employees who are more likely to look for another place than to deal with the famous Microsoft bureaucracy.
I also do not believe that Facebook and Google were serious buyers. Google has a Google Voice product, so it really doesn't need Skype. Essentially, I have the feeling that Microsoft was bargaining with itself. Even so, I personally think that buying is worth the money spent, especially for a company that has been on the sidelines for so long.
Facebook has the greatest benefit from this transaction. The owners of the largest social network had practically no chance to get Skype. If he went public, everything would be over. With the owner in the person of Microsoft, they get everything they need - and access to Skype assets (Microsoft is an investor in Facebook), and a guarantee that Skype will stay away from Google.
Facebook critically needs Skype. Among other things, they need to use the Skype peer-to-peer network to transmit video and voice in the built-in Facebook Chat. If the company tried to use traditional methods to organize such a multimedia service for 600+ million of its users, then the cost of supporting the infrastructure would be excessive.
Facebook can also help Skype expand the number of users of the paid SkypeOut service, and people can pay with Facebook Credits' internal currency to pay for minutes. Skype and Facebook are already working on a joint statement, and you can expect it soon.
Why did Skype want to sell?
Skype filed for an IPO, was about to raise billions of dollars in the open market and was on the path to profitability. So why sell? Both of the largest investors - Silver Lake and eBay - were already losing patience and sought to quickly fix their profits. Other sources also claim that Skype revenue has stopped growing.
The company has put a lot on its videoconferencing service. The premium version of this service was supposed to be a way for Skype to increase the average revenue per subscriber and enter the corporate market. However, given the reputation of Skype as a free Internet product for the masses, the difficulties here were not a surprise.
Who earned how much?
Skype has been offered for sale several times thanks to some very nervous investors.. My sources say that both eBay and Silver Lake Partners were nervous about the delay in listing and tried to initiate a Skype sale. Previously it was reported that negotiations are ongoing with Facebook and Google, and Microsoft appeared later and is now close to picking up the main prize.
I won’t be surprised if Microsoft will be severely criticized for the decision to buy Skype - and a software company can always ruin everything, as it often did after buying other companies. The Skype development team is also full of employees who are more likely to look for another place than to deal with the famous Microsoft bureaucracy.
I also do not believe that Facebook and Google were serious buyers. Google has a Google Voice product, so it really doesn't need Skype. Essentially, I have the feeling that Microsoft was bargaining with itself. Even so, I personally think that buying is worth the money spent, especially for a company that has been on the sidelines for so long.
- Skype gives Microsoft an acceleration in the enterprise collaboration software market with voice and video services, especially in competition with Cisco and Google.
- Microsoft is also gaining access to carriers, many of whom are seeking partnerships with Skype in light of the transition to LTE networks.
- Microsoft gets a very popular application and service that will add popularity to future versions of the Windows Mobile operating system.
- However, the main reason for buying Skype is Windows Phone 7 (mobile OS) and Nokia. Software giant must offer something competitive compared to Google Voice and Apple Facetime.
Facebook has the greatest benefit from this transaction. The owners of the largest social network had practically no chance to get Skype. If he went public, everything would be over. With the owner in the person of Microsoft, they get everything they need - and access to Skype assets (Microsoft is an investor in Facebook), and a guarantee that Skype will stay away from Google.
Facebook critically needs Skype. Among other things, they need to use the Skype peer-to-peer network to transmit video and voice in the built-in Facebook Chat. If the company tried to use traditional methods to organize such a multimedia service for 600+ million of its users, then the cost of supporting the infrastructure would be excessive.
Facebook can also help Skype expand the number of users of the paid SkypeOut service, and people can pay with Facebook Credits' internal currency to pay for minutes. Skype and Facebook are already working on a joint statement, and you can expect it soon.
Why did Skype want to sell?
Skype filed for an IPO, was about to raise billions of dollars in the open market and was on the path to profitability. So why sell? Both of the largest investors - Silver Lake and eBay - were already losing patience and sought to quickly fix their profits. Other sources also claim that Skype revenue has stopped growing.
The company has put a lot on its videoconferencing service. The premium version of this service was supposed to be a way for Skype to increase the average revenue per subscriber and enter the corporate market. However, given the reputation of Skype as a free Internet product for the masses, the difficulties here were not a surprise.
Who earned how much?
- If you take $ 8.5 billion as a sale value, then eBay receives $ 2.55 billion for 30% of its shares. So the output eBay was even a plus.
Nicklas Zennstrom and Janus Friis, co-founders with their 14% stake, will take home about $ 1.19 billion . Yes, these guys know how to double capital!- Silver Lake, Andreessen Horowitz, and Canada Pension Plan Investment Board (CPPIB) own a 56% stake in the company and it costs $ 4.76 billion.
- Andreessen Horowitz owned a 3% stake and received $ 205 million in profit on his initial investment of $ 50 million.