Microsoft to Acquire Skype for $8.5 Billion

Microsoft to Acquire Skype for $8.5 BillionIn a latest development, its been reported that Microsoft is going to buy skype for USD 8.5 billion. Skype is an undisputed leader in online pc to pc calling, video calling and conference calling. Other than these free services it also offers Cheap VoIP Calls to its users. Paid service of skype generated 12.8 billion minutes of traffic in year 2010 thereby making it a good acquisition.

International telephone calling industry has grown at a compounded rate of 12% to 14% annually over the past 2 decades, generating $83 billion in revenue. The traffic did suffer during economic crisis of year 2008 but it has improved quite well since then.

Further, this may be seen as a counter step in direction to give “Google Voice” a competition, which so far has failed to impress the masses. Google Voice is a voip service from Google. With this acquisition Microsoft has now jumped into VOIP space as well.

If I can foresee it right, I get a feeling that very soon the Google will face a tough competition from Microsoft. It has already bought Yahoo and currently working on improving their search algo, now acquired Skype and if Microsoft manages to buy Facebook as well, then Google will start feeling the heat.