Steve Ballmer announcing the deal.”Today is a big day for Microsoft and Skype, as well as businesses and consumers around the world,” said Microsoft chief executive Steve Ballmer. The goal, he said, is to ”empower people around the world with technology that will bring them together.”
The sale was made possible from the Luxembourg-based company’s financial issues. In 2010, , Skype reported a net loss of $6.9 million on nearly $860 million in revenue. It had $686 million in long-term debt, and slightly more than $1 billion in liabilities. The company had filed for a $100 million IPO last year to generate money from common stocks. The offering was delayed when Microsoft and Facebook jumped in to compete for the company.
Microsoft also plans to incorporate Skype into Microsoft Office and Windows 7 Phone as well as Kinect. Skype fills Microsoft’s needs perfectly - it draws 600,000 new registrations every day, and has had annual revenue growth of 40%.
Analysts mildly approve of the sale. Christopher Hickey, an analyst at Atlantic Equities, said the price was ”slightly expensive,” but added that Microsoft plans to use its offshore cash balance to cover the cost. ”It’s expensive, but it’s not the end of the world.”
