Skip to main content

Microsoft and Skype flesh out the details, answer the burning questions

Microsoft and Skype flesh out the details, answer the burning questions

Share this story

If you buy something from a Verge link, Vox Media may earn a commission. See our ethics statement.

Steve Ballmer is on a small webcasted stage in Palo Alto right now, talking up his hot-off-the-presses Skype buy. After the formalities are done, Ballmer and Skype CEO Tony Bates will answer questions. We'll update you with new factoids as they arrive, but if you want to catch the webcast live you can find it right here. (Silverlight required).

Missed the official announcement? You can find all those details (many of which are being rehashed at the presser) right here.

Here are the highlights (after the break):

  • Microsoft made an unsolicited offer to Silver Lake (the investment firm that bought Skype off of eBay).
  • They finalized that $8.5 billion figure on April 18th
  • Signed the deal last night.
  • Skype users average 100 minutes per user per month. Skype calls it the "100 100 club," with 170 million users making up the other 100. Video chat is 40% of Skype use.
  • Steve calls Skype's 20% year over year revenue growth "a very exciting go-forward opportunity."
  • Tony sees the eventual Skype userbase not as "100s of millions, but billions."
  • Microsoft is buying Skype with cash.
  • Product roadmap is pending regulatory approval, so we'll probably see the synergies ramp up later rather than sooner (end of the calendar year is the planned date for everything to be final).
  • Steve says Skype was on a path to IPO, and Microsoft decided it would be better if it owned the company. They made the unsolicited offer around the beginning of April.
  • Tony sees "rich media" advertising as a path to extending monetization, would leverage Microsoft's advertising sales force -- was in talks even outside of acquisition.
  • Skype was "very focused" on an IPO before it got the Microsoft offer.
  • Steve: "It's pretty obvious today that not everyone is doing video participation from their phone. That's an opportunity where lots of things can done, with Microsoft and their phone partners."
  • Both parties are eyeing Kinect as a home video conferencing system. Tony says the living room "is an area where we'd like it to be easier" to do video chat... think of the grandmas!
  • There seems to be an undercurrent of social networking in all this. According to Steve: "We want to stitch together the world."
  • Steve sees cross platform as an important value proposition of a communications platform, promises to stay cross platform, and says Microsoft has a good track record in this already. You have to be able to "reach everybody." Tony sees that as a fundamental place where the companies have a shared alignment.
  • Steve and Tony were a little vague on the Android support front. Skype is seen as a way "to differentiate the communications experience" for carriers. They plan to continue some of the partnerships that already exist, but whether Windows Phone will have exclusive access to certain Skype functionality remains to be seen.

Update: It's over! Just in time to hit up our liveblog of the Google I/O keynote.