Microsoft Buys Skype for $8.5 Billion Cash; Facebook and Google Lose Bidding War

[SiLVa]

Microsoft to buy Skype for $8.5 billion cash

Deal for money-losing but popular service seen as move to regain ground against Google, Apple

By Nadia Damouni and Bill Rigby

Microsoft Corp plans to buy Internet phone service Skype for $8.5 billion, a rich price as it seeks to regain ground on growing rivals such as Google Inc.

Microsoft's interest in the money-losing but popular service highlights a need to gain new customers for its Windows and Office software. Skype has 145 million users on average each month and has gained favor among small business users.

Skype delayed plans for an initial public offering expected to raise $1 billion. It has been looking at other options, including tie-ups with Facebook and Google. Such a deal was seen as valuing Skype at $3 billion to $4 billion.

The Luxembourg-based company, which allows people to make calls at no charge but has also developed premium services, would give Microsoft a foothold in the potentially lucrative video-conferencing market as businesses shift to lower-cost ways of communicating.

Skype could be combined with Microsoft software such as Outlook to appeal to corporate users, while the voice and video communications could link to Microsoft's Xbox live gaming.

Longer-term, Skype would offer Microsoft another route to develop its mobile presence, an area it has already put more energy and resources into as PC usage comes under threat.

Skype is set to become a new business division within Microsoft with Skype Chief Executive Tony Bates in charge and reporting directly to Microsoft CEO Steve Ballmer, Microsoft said.

"It's a strategic asset and a defensive move," said BGC Financial analyst Colin Gillis. "If they can put it on Windows 8, it gives them an advantage. It helps them in the tablet market."

The Skype deal is the biggest in the 36-year history of the world's largest software company. It was first reported late on Monday by tech blog GigaOM.

The $8.5 billion price tag was a surprise. Although the sum would not stretch cash-rich Microsoft, some said it was high for a company whose ownership has changed several times during its relatively short life.

Story: Xbox Kinect could be Skype killer app
"In this atmosphere of Internet Bubble 2.0, picking up an unprofitable online company for roughly 10 times sales probably seems downright cheap,"" Shanghai-based Michael Clendenin, managing director of consulting firm RedTech Advisors, said.

"But if you consider (it) was just valued at about $2.5 billion 18 months ago when a chunk was sold off, then $8.5 billion seems generous and means Microsoft has a high wall to climb to prove to investors that Skype is a necessary linchpin for the company's online and mobile strategy," he added.

Skype, which was formed in 2003, was bought by ebay Inc in 2005 for $3.1 billion. Last year it had in $860 million in revenue but posted a net loss of $7 million, according to data in its initial public offering filing.

In 2009, eBay sold a majority stake in Skype to an investor group including Silver Lake, the Canada Pension Plan Investment Board and Andreessen Horowitz for $1.9 billion in cash and a $125 million note. EBay retained about a third.

http://www.msnbc.msn.com/id/42967056/ns/...s_business

Picture kind of says it all doesnt it? An interesting graphic attached to this story, up on MSN:

Skype swallowed up by the all seeing eye

[IanPotter]

Look out. The Murkysoft monster has been an essential element of the hi-jacking of planet Earth & it's growing a new head!

Might it be a good thing if it spurs the development of a comprehensive open-source solution along a bit?

[FastTadpole]

I'd heard rumbling about this takeover earlier but from a different angle and for 'only' 3-4 Billion Dollars:

Quote:Skype being sought by Facebook, Google
http://is.gd/4KT1Cs

http://twitter.com/#!/Copycense/status/6...4104392704
http://www.reuters.com/article/2011/05/0...UG20110504

The acquisition has now been confirmed by both Microsoft and Skype:

Quote:Confirmed: Microsoft Buys Skype for $8.5 Billion [Update]
by Robert Quigley | 10:41 pm, May 9th, 2011

If the business press is to be believed, VoIP and video-chat service Skype’s fortunes have taken an interesting turn since the rumors just a few days ago that Facebook or Google might, just might buy it for 3 or 4 billion dollars, but were more likely to enter into a major partnership with it. Now, the Wall Street Journal reports that Microsoft is in advanced negotiations to buy Skype for “between $7 billion and $8 billion,” with a deal possibly to be announced “as early as Tuesday.” But why?

Update, 5/10/11, 7:53am ET: According to Forbes, this deal is happening for $8.5 billion, and we should expect confirmation within the hour.

Update2, 8:20am: It’s official: Microsoft has confirmed the deal.

Snipping a few sentences from the WSJ’s long piece:

Buying Skype would give Microsoft a recognized brand name on the Internet at a time when it is struggling to get more traction in the consumer market. The company has invested heavily in marketing and improving the technology of its Bing search engine.

At a value close to $8 billion, the Skype deal would rank at or near the top of the biggest acquisitions in the 36-year history of Microsoft, a company that traditionally has shied away from large deals.

Skype could play a role in Microsoft’s effort to turnaround its fortunes in the mobile phone market, an area where it has lagged badly behind rivals Apple Inc. and Google.

If true, eBay must be cursing its fortunes now for selling off a majority stake of Skype for $2 billion in 2009, valuing the overall business at $2.75 billion.

Press release:

REDMOND, Wash., and LUXEMBOURG – May 10, 2011 – Microsoft Corp. (Nasdaq: “MSFT”) and Skype Global S.à r.l today announced that they have entered into a definitive agreement under which Microsoft will acquire Skype, the leading Internet communications company, for $8.5 billion in cash from the investor group led by Silver Lake. The agreement has been approved by the boards of directors of both Microsoft and Skype.

The acquisition will increase the accessibility of real-time video and voice communications, bringing benefits to both consumers and enterprise users and generating significant new business and revenue opportunities. The combination will extend Skype’s world-class brand and the reach of its networked platform, while enhancing Microsoft’s existing portfolio of real-time communications products and services.

With 170 million connected users and over 207 billion minutes of voice and video conversations in 2010, Skype has been a pioneer in creating rich, meaningful connections among friends, families and business colleagues globally. Microsoft has a long-standing focus and investment in real-time communications across its various platforms, including Lync (which saw 30 percent revenue growth in Q3), Outlook, Messenger, Hotmail and Xbox LIVE.

Skype will support Microsoft devices like Xbox and Kinect, Windows Phone and a wide array of Windows devices, and Microsoft will connect Skype users with Lync, Outlook, Xbox Live and other communities. Microsoft will continue to invest in and support Skype clients on non-Microsoft platforms.

“Skype is a phenomenal service that is loved by millions of people around the world,” said Microsoft CEO Steve Ballmer. “Together we will create the future of real-time communications so people can easily stay connected to family, friends, clients and colleagues anywhere in the world.”

Skype will become a new business division within Microsoft, and Skype CEO Tony Bates will assume the title of president of the Microsoft Skype Division, reporting directly to Ballmer.

“Microsoft and Skype share the vision of bringing software innovation and products to our customers,” said Tony Bates. “Together, we will be able to accelerate Skype’s plans to extend our global community and introduce new ways for everyone to communicate and collaborate,” Bates said.

“Tony Bates has a great track record as a leader and will strengthen the Microsoft management team. I’m looking forward to Skype’s talented global workforce bringing its insights, ideas and experience to Microsoft,” Ballmer said.

Speaking on behalf of the investor group that sold Skype to Microsoft, Egon Durban, managing director of Silver Lake, said: “We are thrilled with Skype’s transformation during the period of our ownership and grateful for the extraordinary commitment of its management team and employees. We are excited about Skype’s long-term future with Microsoft, as it is poised to become one of the world’s most dynamic and comprehensive communications platforms.”

Founded in 2003, Skype was acquired by eBay in September 2005, and then acquired by an investment group led by Silver Lake in November 2009. Skype has made impressive progress over the past 18 months under Silver Lake’s leadership, increasing monthly calling minutes by 150 percent, developing new revenue streams and strategic partnerships, acquiring the intellectual property powering its peer-to-peer network, and recruiting an outstanding senior management team.

Other members of the selling investor group led by Silver Lake include eBay International AG, CPP Investment Board, Joltid Limited in partnership with Europlay Capital Advisors; and Andreessen Horowitz.

The acquisition is subject to regulatory approvals and other customary closing conditions. The parties hope to obtain all required regulatory clearances during the course of this calendar year.

(WSJ via @BreakingNews)

http://www.geekosystem.com/microsoft-buying-skype/

I'm trying to get my friends on Ventrilo with limited success. It's not a new kid on the block, (Developed since 1999); quite stable (v3.0 available for free download), has great support, you can (pretty easily) host it on your own desktop or server and is packed with features and applications.

Quote:What is Ventrilo

Ventrilo 3.0.0 is the next evolutionary step of Voice over IP (VoIP) group communications software. Ventrilo is also the industry standard by which all others measure themselves as they attempt to imitate its features.

By offering surround sound positioning and special sound effects on a per user, per channel, per server or global configuration level the program provides each user the option to fully customize exactly how they wish to hear sounds from other users or events.

Ventrilo is best known for it's superior sound quality and minimal use of CPU resources so as not to interfere with day to day operations of the computer or during online game competitions. It is also preferred for the simple user interface that any first time computer user can very quickly learn because the most commonly used features are immediately visible and can be activated with a single click of the mouse.

To see what the program looks like and a list of some of the many features the program offers please view the About page.

The Ventrilo Client and Server programs are copyright 1999-2007 by Flagship Industries, Inc.
Ventrilo is a Trademark of Flagship Industries, Inc.

http://www.ventrilo.com/

Quote:Features

* Voice communication with multiple people.
* Cross channel communications.
* Phantom users for listening in on other channels.
* User-to-user private conversations.
* Individual channels that can be created dynamically.
* Sub channels.
* Muted channels.
* Queued channels.
* Channel transmit time limits.
* Channel client limits.
* Channel feature filtering.
* Password protected server login and channels.
* Advanced channel control options and filters.
* Individual admin passwords for channels.
* Text-to-speech (TTS) voice generation.
* Key binding to execute special program functions, play wave files, send TTS messages.
* Separate phonetic spelling of user and channel names for proper TTS.
* Built in chat similar to IRC.
* Users can enter dynamic comments for all other users to see.
* User assigned names for server connections. No need to remember IP numbers.
* Wave file or TTS event notifications for program events.
* Remote administration of server features and current users.
* Remote administration of persistent server properties.
* Mute Microphone and Mute Sound with key binds for both.
* User adjustable sound effects.
* Persistent mute states for specific users on a given server.
* Persistent channel admin passwords.
* Persistent special effects including surround sound for users, channels, servers, global.
* Built in server browser.
* Ability to record and playback voice streams. Great for watching demos with associated voice comms.
* Voice activation or Press-to-talk transmission modes.
* Binds to change channels or cycle through all available channels.
* Multiple platform support for servers.
* Multiple platform support for clients.
* Servers are now ready and supported on 64bit platforms.
* The clients and servers do NOT contain any Ad Ware or Spy Ware features.
* Ability to restrict server admin features. Useful for hosting services.
* Server specified codec's to control voice quality and bandwidth usage.
* User customization of display modes.
* User customization of user list icons and toolbar icons.
* Clients will soon support *NIX platforms.
* Portable cross platform server.

Ventrilo uses a Client / Server architecture.

At the present time the client is supported on the following platforms:

Microsoft Windows 9x / NT / 2000 / XP
Macintosh PowerPC OSX 10.3 or higher.

At the present time the server is supported on the following platforms:

Microsoft Windows 9x / NT / 2000 / XP
Linux i386
FreeBSD i386
NetBSD i386
Solaris Sparc 64bit
Solaris i386
Mac OSX PowerPC 32bit

The server is designed so that multiple copies can be started on the same computer and properly supports multi-homed systems, even including interface filtering.

In the Windows environment the server can be started manually or configured to run as an NT Service when using one of the Microsoft NT/2000/XP Operating Systems. The NT service can also be configured to start multiple instances of the server program and has built in features to automatically restart servers if the administrator issues a shutdown command or if a program bug is encountered.

In the UNIX environments the server can be started manually or configured to run as a background daemon. Multiple instances of the UNIX server can be started on the same computer. It's also possible to configure them on a "reserved" basis in which they are started automatically at certain times and then terminated later.

http://www.ventrilo.com/about.php

[FastTadpole]

Flashback to my 2nd post on ConCen:

Government Sponsored Spyware: Skype Eavesdropping Trojan
http://concen.org/forum/showthread.php?tid=1215

[yeti]

What are the chances the next version of Skype has no linux client?

It's a shame that there is no Ventrilo client for linux.

[FastTadpole]

They are working on it and do have the server.. I suppose you could emulate it in the meantime. Open source true cross platform VOIP server client software would be ideal any other Microsoft Skype alternatives? I haven't looked too deep yet and don't want to blindly plug anything.

[FastTadpole]

Quote:Guess Who is the Big Winner in the Microsoft/Skype Deal
Author: Miguel Salcido
Published: May 10, 2011 at 7:02 pm

..

So who are the biggest winners in this deal? Well, it is tough to say if Microsoft is a big winner here. It is speculated that much of the Skype staff will jump ship and that the notoriously bureaucratic infrastructure at Microsoft will only speed this exodus. But that may be what Microsoft wants. After all, they have a huge pool of talent to run Skype. But they have botched acquisitions in the past, making it hard to tell if this will work out for Microsoft.

Quite possibly the biggest winner here is Facebook. Facebook sorely needs Skype technology, and guess what, Microsoft is an investor in Facebook! Facebook stands to significantly improve the Facebook Chat services by offering video and voice functionality. There is also an opportunity to further monetize the Skype Out service with these 600 million plus customers.

Allowing Facebook access to Skype technologies could make this a good deal of Microsoft, independent of the many other opportunities this could provide the software and search giant. It also gives them a counterpart to Google Voice, and we all know how Microsoft/Bing is working hard to keep up with Google and to enhance it's own IM service.

As things shake out over the next few years things will become much more clear. But one thing is for sure in that no matter what happens Facebook wins.
...

http://digg.com/news/technology/guess_wh...skype_deal
http://twitter.com/#!/FastTadpole/status...9736891392
Full Article: http://technorati.com/business/article/g...ig-winner/

[IanPotter]

@ Yeti

Is this any use to you?

http://alternativeto.net/software/mangler/

[yeti]

(05-11-2011 09:31 PM)IanPotter Wrote:  @ Yeti

Is this any use to you?

http://alternativeto.net/software/mangler/

Thanks for the link. The developers actually recommend that you don't use it! Since it is a linux client for Ventrilo which they don't recommend using, they suggest you use an alternative to Ventrilo called Mumble, which I will check out...

[FastTadpole]

(05-11-2011 10:37 PM)yeti Wrote:  

(05-11-2011 09:31 PM)IanPotter Wrote:  @ Yeti

Is this any use to you?

http://alternativeto.net/software/mangler/

Thanks for the link. The developers actually recommend that you don't use it! Since it is a linux client for Ventrilo which they don't recommend using, they suggest you use an alternative to Ventrilo called Mumble, which I will check out...

Groovy I'll audit the Win32 Client -- tomorrowish.. unless someone else beats me to it.

OOh and Open Source to boot, wicked cool.

[FastTadpole]

Ok I'm on using Win32 Vista. It's got a server too but I haven't bothered with it.

It's got one click recording to .wav!

I'm on the FP public server, just a bunch of gamers that barely speak the English

[yeti]

FT and I managed to connect using Mumble. It's a really promising group chat app. I used Ubuntu straight from the package manager download. Setup was easy but you need to make sure you use a headset and calibrate your upper and lower thresholds properly - a thorough knowledge of calculus helps...

Just kidding! Jeez...

What do you guys think about setting up a ConCen audio chat server?

[IanPotter]

(05-12-2011 02:11 AM)yeti Wrote:  ...What do you guys think about setting up a ConCen audio chat server?

I have VOIP functionality on my router waiting for a reason to get wired and fired up so I'd be happy to take part in the testing if required.

[FastTadpole]

Haven't got a lot of time for a test and review but if someone is looking for a crossplatform free opensource ViOP SIP video teleconference service. A friend just told me about it.

Quote:Ekiga.net

Ekiga.net is a free Voice over IP, commonly VoIP or internet telephony, service provider.

Using VoIP is like using electronic mails:

* You need an address. That's mainly what Ekiga.net is for: giving free SIP-Addresses.
* You need a software to use this address. Any SIP aware software will do, but we recommend our free Ekiga softphone, which has Instant-Messaging, Audio and Video built-in.

Download the Ekiga softphone (or use your prefered SIP aware softphone) and get a free SIP-Address.

https://www.ekiga.net/

[Telecaster72]

There is a multi platform (Linux, Mac & Win) voip software called Qutecom (formerly Wengophone) that seems interesting:
http://trac.qutecom.org/
http://en.wikipedia.org/wiki/QuteCom

Quote:QuteCom is an easy to use program, that enables you to call anyone, anywhere, anytime, for free. Its native use of the SIP protocol makes it interoperable with most on the known VoIP technologies.

QuteCom (formerly WengoPhone) is a multi-platform VoIP client. The GUI is Qt-based, and the Video-over-IP engine is based on the eXosip, oRTP, oSIP, ffmpeg, and libgaim projects. The eXosip module is extended by a phApi module, which implements a high-level, easy-to-use call control API.

It supports PC-to-PC voice, video, and chat. One can use a standard SIP service provider such as Wengo to be assigned an incoming number, make calls to PSTN/cell phones, get voice mail, and more. In addition to SIP/SIMPLE QuteCom provides IM functionality using libgaim, so it is compatible with all protocols supported by libgaim.

Quote:QuteCom is an free and open source voice-over-ip, and video conferencing application. The latest version of the software is always available on the QuteCom website.

QuteCom 2.2 is licenced under the GPL, and is free software. It supports the following features:

* fully SIP-compliant softphone with audio, video, and presence support
* Instant messaging features including support for Jabber/GoogleTalk, AIM/ICQ, MSN and Yahoo (though with limited support for the specific features of each protocol)
* available for Linux, MacOSX, and Windows
* NAT traversal including STUN and HTTP proxy support
* File transfer capabilities
* use of libgaim from Gaim to allow interoperability with many IM protocols.
* Encryption using SRTP with AES 128 bit standard encryption.
* 100% translations for 13 languages.


The QuteCom is the new name WengoPhone product and is maintained by MBDSYS and by the community QuteCom.
The initial project devlopper was Wengo, a subsidiary of the second heaviest PSTN/ADSL network in France who transfered the sponsorship to MBDSYS in the beginning of 2008

For more information, see http://www.qutecom.org

http://www.voip-info.org/wiki/view/QuteCom

Unfortunately the version in the Debian Squeeze repositories does not work for me, but i'll give it some time later and maybe try compiling it from source and see if that works better...

Edit: *geek alert* The version in "testing" repositories works. *end geek alert*

It seems to have similar functions as Skype, you can also use regular instant messaging protocols and accounts with it (MSN, YIM, AIM, ICQ and XMPP). Teleconferencing is also possible.
You'll need a "SIP" account to use it, you call through SIP servers.

http://en.wikipedia.org/wiki/Session_Ini...n_Protocol

Free SIP account (there is others too)
https://mdns.sipthor.net/register_sip_account.phtml
There are SIP apps for cellphones as well.

I haven't looked into all the technical stuff, but it looks promising if it works as advertised.
Traffic can be encrypted as well it seems.
http://blog.tekelec.com/blog/?Tag=Encryption

Screenshot