Devita Saraf, the CEO of Vu TelePresence, has branded the $8.5 billion acquisition of Skype by Microsoft “a ringing endorsement of the communications services market”:
“This acquisition as well as Cisco’s recent shift towards the SMB category, reinforces our long held view that there is significant opportunity in the small business space.”
The comments reflect the shockwaves which ran through the technology industry yesterday as Microsoft announced its largest ever acquisition.
Skype is currently owned by a group of investors including Silver Lake – the global private investment firm with approximately $14 billion in assets under management. The firm recently allowed advertising within its software for the first time, reaching around 170 million users.
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. Under Silver Lake’s leadership, Skype has increased monthly calling minutes by 150 percent, acquired the intellectual property powering its peer-to-peer network and recruited a new 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.
Covington & Burlington LLP advised Microsoft on the deal, which will see Skype become a new business division within Microsoft. Skype will be developed to support Microsoft devices such as Xbox, Kinect, and Windows Phone. Microsoft will connect Skype users with Lync, Outlook, Xbox Live, and other communities.
Microsoft CEO Steve Ballmer said of the deal:
“Skype is a phenomenal service that is loved by millions of people around the world. 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.