Microsoft buys Skype


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Tuesday, 10 May 2011
IT giant Microsoft is said to be about to buy Swedish founded internet phone company Skype for about Skr50 billion Swedish, according to sources familiar with the deal and reported by various Swedish media outlets.

The agreement is being made public as early as Tuesday morning, according to the source who wishes to remain anonymous. It all started as a rumour as previously, Google and Facebook has been mentioned as potential buyers of the network. Now, Microsoft will be close to a deal according to the Wall Street Journal.

The price tag may land at upwards of Skr50 billion and would thus become Microsoft's biggest deal since 1975
Skype has over 600 million users but only a fraction, just over nine million, is paying. Last year the company made a loss of Skr40 million. Yet, Microsoft is willing to pay ten times the company's turnover.

“For Microsoft, it is about expanding their range. It is what you pay for. The market trend is that everyone wants to broaden itself; everyone wants to be able to offer search, communications tools, and so on, "said Helen Nordman-Knutson, a telecom analyst and the consulting firm �hman.

Microsoft hopes the use the tool to promote its own search engine Bing and offer a broader package of services, as a step in the fight against competitors like Google and Apple.

Those who would sell Skype, are the private equity firm Silver Lake, which is majority-owned, and auction site Ebay, which owns about 30 percent, and the founders Niklas Zennstrom and Janus Friis, who owns just over 14 percent of the company.

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