Microsoft buying Skype for $8.5 billion
Skype, a popular communications software, uses of voice over Internet protocol technology that makes international voice and video calls cheaper.
Microsoft said Skype will become a new business division within Microsoft with Skype CEO Tony Bates assuming the title of president of the Microsoft Skype Division, reporting directly to Ballmer.
Microsoft's biggest acquisition until now had been its 2007 buy of digital marketing firm aQuantive for $6.3 billion. Microsoft unsuccessfully tried to buy Yahoo! in 2008 for $47.5 billion in another bid to make an online splash.
Skype was founded in 2003 and acquired by online auction giant eBay in September 2005. It was sold to the investment group led by Silver Lake in November 2009 in a deal that valued the company at $2.75 billion.
Skype History
The Skype software was invented and developed by Estonian developers Ahti Heinla, Priit Kasesalu and Jaan Tallinn, the same individuals who together with the Swedish entrepreneur Niklas Zennström and Dane Janus Friis were also originally behind the peer-to-peer file sharing software Kazaa. Skype as a company was founded in 2003 by Zennström and Friis. In April 2003, Skype.com and Skype.net domain names were registered. In August 2003, the first public beta version was released.
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