Not sure if this Skype acquisition will put Microsoft back on the map, but they’re hoping to compete Google with this expensive purchase:
Microsoft Corp plans to buy Internet phone service Skype for $8.5 billion, a rich price as it seeks to regain ground on growing rivals such as Google Inc.
Microsoft’s interest in the money-losing but popular service highlights a need to gain new customers for its Windows and Office software. Skype has 145 million users on average each month and has gained favor among small business users.
Skype delayed plans for an initial public offering expected to raise $1 billion. It has been looking at other options, including tie-ups with Facebook and Google. Such a deal was seen as valuing Skype at $3 billion to $4 billion. The Luxembourg-based company, which allows people to make calls at no charge but has also developed premium services, would give Microsoft a foothold in the potentially lucrative video-conferencing market as businesses shift to lower-cost ways of communicating.
Skype could be combined with Microsoft software such as Outlook to appeal to corporate users, while the voice and video communications could link to Microsoft’s Xbox live gaming. Longer-term, Skype would offer Microsoft another route to develop its mobile presence, an area it has already put more energy and resources into as PC usage comes under threat.