Microsoft is buying phone network company Skype for almost six billion euros – in cash.
Skype – through which people can make voice and video calls, at no charge, over the internet – has never made a profit and some analysts said the purchase makes no financial sense and Microsoft was overpaying.
The software firm’s boss Steve Ballmer ignored the naysayers and told reporters: “Today is a big day for Microsoft and Skype, as well as consumers and businesses around the world. We’re making life better – by providing tools that help people to learn, to analyse, to take action, as well as to enjoy and to socialise.”
Skype is increasingly popular with 145 million users on average each month. International traffic has grown from 5.4 billion minutes in 2007 to 45 billion last year.
The purchase is Microsoft’s biggest ever. Skype could be combined with its 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.