Microsoft confirms takeover of Skype

10 May 2011 on BBC News UK

Microsoft has confirmed that it has agreed to buy internet phone service Skype.

The deal will see Microsoft pay $8.5bn (£5.2bn) for Skype, making it Microsoft’s largest acquisition.

Luxembourg-based Skype has 663 million global users. In August last year it announced plans for a share flotation, but this was subsequently put on hold.

Internet auction house eBay bought Skype for $2.6bn in 2006, before selling 70% of it in 2009 for $2bn.

This majority stake was bought by a group of investors led by private equity firms Silver Lake and Andreessen Horowit.

Microsoft chief executive Steve Ballmer said: “Skype is a phenomenal service that is loved by millions of people around the world.

“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.”

Skype will now become a new division within Microsoft, and Skype chief executive Tony Bates will continue to lead the business, reporting directly to Mr Ballmer.

Price concerns

Analysts say Microsoft’s aim in buying Skype is to improve its video conferencing services.

Although the price tag of $8.5bn will not stretch the US giant, some experts have questioned whether it is paying too much for a company that has struggled to turn a profit.

Michael Clendenin, managing director of consulting firm RedTech Advisors, said: “If you consider [Skype] was just valued at about $2.5bn 18 months ago when a chunk was sold off, then $8.5bn seems generous.

“[It] means Microsoft has a high wall to climb to prove to investors that Skype is a necessary linchpin for the company’s online and mobile strategy.”

This view was echoed by Ben Woods, head of research group CCS Insight.

“The big unanswered question is how do Skype assets work for Microsoft… how do you justify the price?” he said.

Skype was founded in 2003.

Calls to other Skype users are free, while the company charges for those made to both traditional landline phones and mobiles.

News That Comes Back Around: Why Every Child Needs an iPad

Posted by Warner Crocker | May 9 on GottaBeMobile

I think if Rob, or Dennis, or Sumocat, or just about any other Tablet PC blogger said it, we said it about a bazillion times back in the day. Put Tablet PCs in the hands of children and you’ll find out why these devices are the wave of the future. Children don’t have preconceptions when you put something new in front of them, and as we’re seeing with iPads and other Tablets today, when you put one in their hands, they figure it out pretty quickly. The same thing happened with Tablet PCs back in the day.

A recent Cult of Mac post, Why Every Child in America Needs an iPad, makes similar points, and also advocates that this is a good way to un-tether a child from that well known baby sitter, the TV. The post also points up some of the controversy that comes with this as iPads start to proliferate, and I guess you could say that the leading anecdote of seeing a small child in a restaurant watching a movie might point up that this could just be replacing one electronic babysitter with another.

That said, the post lists a number of reasons why iPads and Tablets make sense for kids. I’ll just say this: regardless of the concerns about whether or not these kinds of devices are suitable substitutions for children, how children take to and relate to new technology that make us adults give pause and think before we begin playing with them is a big telling point into whether or not the device, gadget, or technology will succeed.

If you’d like you can scroll through some of the posts about Kids and Tablets PCs that can be found at this link.