FTC Approves Microsoft/Skype Acquisition

By Beecher Tuttle June 20, 2011

Microsoft on Friday received clearance from the Federal Trade Commission for its $8.5 billion acquisition of Web calling client Skype. The software giant's largest-ever acquisition now needs only a signature from the Department of Justice before it is officially approved, according to the Associated Press.

If approved, Microsoft is expected to integrate Skype's services into a number of its own platforms, including its Xbox gaming console and its Windows Phone 7 mobile operating system. The Washington-based company may also provide support for its desktop OS as well as Microsoft Lync and Outlook.

Microsoft has announced its intention to create a new business unit led by Skype CEO Tony Bates, who will oversee the future of the Internet telephony product. Microsoft has also said that Skype will continue to provide support for other platforms outside of the Microsoft family. The Web calling client's popularity is due, in part, to its ability to connect users across multiple devices and operating systems.

The $8.5 billion acquisition turned a few heads when announced in May due to a number of concerns. First off, Skype has yet to parlay its popularity into an investor-friendly balance sheet. Even with around 170 million users, Skype has yet to turn a profit.

In addition, Microsoft paid more than three times that of the value of the company just 18 months ago. An investor group led by Andreessen Horowitz, Canada Pension Plan Investment Board and Silver Lake Partners purchased 65 percent of Skype in 2009 for $1.9 billion.

In related news, Skype on Monday confirmed that a number of its top-level executives have been fired. Eight high-ranking members of the Skype family – including vice presidents David Gurle, Christopher Dean, Russ Shaw and Don Albert – have been let go.

Bloomberg, which first reported the move on Sunday, said that the motivation behind the firings was to limit the value of payouts made to Skype employees before the Microsoft acquisition is finalized.

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.

Beecher Tuttle is a TechZone360 contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Jennifer Russell

TechZone360 Contributor

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