Microsoft and Skype made it through the hoops to join hands in servicing the communication needs of businesses and consumers alike. It was good timing for both companies. My view is that Skype had reached its pinnacle as an independent service and the road to continued growth was paved by its ability to integrate with products like Microsoft used by millions of users worldwide. For Microsoft it is acquiring massive amounts of new clients to offer feature enhanced services is a veritable strategic coups. Growth would have been slowed for each of these two companies as the competed for the same client base. Together they can focus on enhancing services and offering more value.
Here is a snip from the Microsoft Press release.
Oct. 13, 2011 — Microsoft Corp. (Nasdaq “MSFT”) has closed its acquisition of Skype Global S.à r.l. Negotiations of the definitive agreement under which Microsoft would acquire Skype, an Internet communications company, for $8.5 billion were led by investor group Silver Lake and the transaction was originally announced on May 10, 2011. Boards of directors of both Microsoft and Skype previously approved the acquisition.
What is different about Skype?
Unlike other VoIP services, Skype is a peer-to-peer system rather than a client–server system, and makes use of background processing on computers running Skype software; the original name proposed – Sky peer-to-peer – reflects this.