Microsoft Set to Buy Skype for $8 Billion?

[update: 5/11/11 - the deal is final and approved]

Microsoft appears to be all set to purchase VOIP giant Skype, for $7 billion – $8 billion. The reports revolve around recent news that Skype put it’s IPO on hold earlier this year to allow more negotiating time for potential suitors.

Google & Facebook are said to have been kicking the tires but at $8 billion it appears that Microsoft could take the cake.  And that’s one expensive cake.

In one of Microsoft’s most aggressive move yet, the company seems to be grabbing at some extremely pricey straws to try and make its play in the increasingly commingled world of communications, information, entertainment and internet.  Reports say a deal could be announced as early as today [5/10/11], however nothing is finalized and the deal may still fall through.

Skype is a service that connects millions of users across the globe via an Internet-Based ‘telephone’ and video service.  Considering how much Microsoft has been clawing at getting ANY traction in the consumer market, the addition of a recognized brand may help.

Skype may be able to fit well with Microsoft’s enterprise business as a communications hub for video and telephone conferencing and online meetings (hopefully taking some of Cisco’s WebEx market share).

Regardless of what looks to be a small market share gains over the past year, Microsoft’s push of Bing (and merger with Yahoo) still has not yet made much of a dent in Google’s dominance of the search market [Google - 65 percent].

Microsoft saw a loss of $726 million in their Online Services Division for the first quarter 2011. Their worst quarter in 2 years and their second worst ever, the growth in actual revenue has not been able to impact the bottom line.

This post originally appeared at UBE, Inc.

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