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Microsoft May Acquire Skype For $8 Billion
May 10, 2011 01:25 AM

Although Google I/O 2011 is just hours away, the rumor mill is hard at work generating buzz about a major acquisition that could outshine any announcement coming out of today’s Bay Area event. For the past few weeks, Skype was in heavy talks with Facebook and Google about the possibility of being acquired. However, the VoIP provider turned down both tech giants, and the Wall Street Journal is reporting that Skype is actually going to be bought by Microsoft for a whopping $8 billion.

Skype–a peer-to-peer application that allows users to send messages and make video calls over the internet–started in 2003 and quickly solidified itself as one of the premier chat clients. In fact, in October 2005, eBay bought the budding company for $2.5 billion. However, the internet auction website was unable to figure out a way to properly merge chat technology with its community of buyers and sellers. In the end, they chose to sell Skype to an investor group four years later after the initial buyout.

Without eBay’s interest guiding the company’s development, Skype grew into the video calling service it is today. They went on to create a large percentage of the videotelephony patents that allow users to video chat over the web. Now, with more than 600 million users, it is a no brainer for Facebook, Google, and Microsoft to want to buy out the company.

However, it is of the utmost importance for Microsoft to seal the deal. Even though their current chat program–Windows Live Messenger–is a decent text chatting program with more than 600 million users, its video chat functions leave much to be desired.┬áIn order to regain control of the market, it is absolutely essential for Microsoft to strengthen its Windows Mobile division and remind consumers that they are innovators in technology. By acquiring the internet calling company, they would be able to merge one of best video conferencing programs with Windows Live Messenger making it a legitimate online chatting program. Plus, Skype is available for almost every smart phone imaginable. If the two chat clients merge, this would give the PC developer’s a chance to have their hand in just about every one of their competitor’s devices.

In regards to their cell phones, Microsoft already announced they would add Skype to Windows Phone 7. If the deal goes through, Microsoft could bring a Skype-driven video chat application to its latest smart phone operating system and every subsequent OS. Windows Mobile users would no longer have to settle for third party apps and could use the best of the best wherever they go. This could finally make Windows Phone 7 a valid contender against Google’s Android and Apple’s iOS.

More importantly, if the deal is confirmed, we could be seeing Skype in new and exciting ways. For example, Xbox Kinect would make video chatting in your living room a breeze. It would be fantastic to give a sick melee attack to an opponent and see the agony on your opponent’s face in real time. Or, how cool would it be if we could video chat on our phones and continue that conversation on our desktops at home? The possibilities are endless, and the potential for further innovation cannot be more exciting. However, one thing is certain. If Microsoft does buyout Skype, the video-telecommunication market will never be the same.

Links: Microsoft | Skype

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