Microsoft has bought Skype for $8.5 billion in cash, Anupreeta Das and Nick Wingfield of the WSJ report.
The deal was concluded late Monday evening.
It is the biggest acquisition Microsoft has ever made.
The price tag is silly on a stand-alone basis, but the deal could make strategic sense for Microsoft: With the rise of Facebook and Gmail and Apple, the company has lost its dominance of online communications. Although Skype’s functionality is now a commodity (Microsoft has services that offer the same functionality), Skype’s user-base and “social network” are not. If Microsoft can successfully integrate Skype with Exchange and Microsoft’s other communications tools (including Windows Phone 7), it would give users more incentive to stick with its products.
And $8.5 billion is chump change for Microsoft.
The deal is a nice flip for Silver Lake, Andreessen Horowitz and other firms that bought 65% of Skype from eBay at a valuation of $2.75 billion two years ago. It also puts $1.9 billion in the pockets of Skype’s founders. And eBay shareholders, who still owned 35% of the company, didn’t do badly, either. (eBay ended up making nice money on Skype.)
Om Malik has a good analysis of why Microsoft is buying Skype and what it means for the rest of the industry, including Facebook.