Microsoft will announce later today that it has bought IP telephony business, Skype, for $8.5 billion, according to the Wall Street Journal.
The deal means that Skype will cost Microsoft more than three times the valuation its current owners placed on it after they acquired a 70% stake in the company from eBay in 2009. eBay bought Skype in 2005 for $2.6 billion with the intention of using its VoIP technology to help buyers and sellers talk to each other.
Skype made a loss of $7 million last year, on revenue of $860 million, though it made an operating profit of $264 million. It has debt of $686 million.
According to the WSJ’s All Things Digital blog, Microsoft’s interest in Skype lies in its widely recognised brand, its 663 million registered users, and in the opportunity to tie it into existing Microsoft services.
Microsoft has struggled to compete in the online services market and has being playing catch-up with Google for several years. It has lost billions of dollars in the process – it’s recent quarterly results showed a loss of $713 million in its Online Services division for the three months to the end of March.
