Microsoft pays $8.5B for Skype

Microsoft CEO Steve Ballmer, left, shakes hands with Skype CEO Tony Bates.

Microsoft plans to buy Internet phone service Skype for $8.5 billion in its biggest-ever acquisition, placing a rich bet on mobile and the Internet to try to best rivals such as Google.

In a deal that took a month from offer to signing, the software company outbid Google and Facebook, which sources said offered to partner or buy Skype for $3 billion to $4 billion.

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.

But investors expressed skepticism over the deal, sending Microsoft shares down 1.4 percent to $25.46. If those losses hold, the software giant’s market value — already exceeded by Apple last year — will slip behind General Electric’s and begin to approach IBM’s.

Microsoft is putting more energy and resources into mobile and the Internet as the personal computer business underpinning its Windows and Office franchise appears to be under threat. 


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