Microsoft announced intentions to buy VOIP/video provider Skype on May 10. Microsoft is paying $8.5 billion in cash, and is counting on the deal to secure regulatory approval before the end of calendar 2011.
Microsoft officials are saying they originally had been thinking about partnering with Skype, but decided in late March/early April to make an unsolicited bid for Skype instead. Microsoft officials said the price was finalized on April 18 The deal was signed last night, May 9, officials said.
Here's the email that CEO Steve Ballmer sent to the Microsoft troops on May 10 about the deal, sent to me by one of my contacts:
"Today we announced an agreement to acquire Skype, the leading Internet communications company. You can see the full details here. Pending regulatory review, Tony Bates, CEO of Skype, will report to me as President of our newly formed Skype Division.
"This is a big step forward today for Microsoft and Skype, and one that has substantial benefits for our joint consumer and business customers. On its own, Skype is a powerful consumer brand with more than 170 million connected users, synonymous in many places around the world with voice and video communications. We will help them grow even stronger..
"By bringing together the best of Microsoft with the best of Skype, we will drive a new era in communications. We see a huge desire to do more with video, to make it easier for people to connect from multiple devices, to move from chat to phone to video and back in a way that is easy, natural, and human. We see with Kinect the power of using the biggest screen in the house – the living room TV screen – as the place where people connect with friends and families. We see with Windows Phone 7 the way communication moves from personal to professional in a blink of the eye. And we know that people want more connection and richer communication, across many devices and around the world.
"Together, Microsoft and Skype will deliver that kind of communication and connection. In the future, Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and we will connect Skype users with Lync, Outlook, Xbox Live, Messenger and other communities. I want to call out the success we have had with the introduction of Lync specifically and the value of connecting that to a consumer community of Skype. And we’ll continue to invest in and support Skype clients on non-Microsoft platforms.
"Today’s announcement underscores who we are as a company. We are ambitious and forward looking. We have big goals and aspirations. And when we look into the world and see opportunities to do more with technology, we’ll drive toward them and keep pushing. Sometimes we’ll build ourselves, as we’ve done most recently with Bing and Kinect.
"Sometimes we’ll partner or form an alliance to seize the moment, as we’ve done with Yahoo! and Nokia. And other times we’ll make an acquisition, as we’ve announced today – one that plays to both company’s strengths and opens new opportunities not available otherwise.
"Exciting times! "Steve"