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Microsoft Acquires Skype for $8.5 Billion

Image representing Skype as depicted in CrunchBase

Image via CrunchBase

After rumors that first Facebook and then Microsoft were in talks to acquire Skype, the latter announced that it has acquired the VoIP giant for $8.5 billion in cash.

Skype will be integrated into Microsoft devices and systems such as Xbox and Kinect, Xbox Live, the Windows Phone, Lync and Outlook, Microsoft said in a statement. The company has pledged to continue supporting and developing Skype clients on non-Microsoft platforms as well.

The deal, which was spearheaded by Microsoft CEO Steve Ballmer with assistance from Charles Songhurst, the company’s head of corporate corporate strategy, was completed Monday evening, AllThingsD reported earlier.

The acquisition is an expensive one for Microsoft. Not only is it the largest price Microsoft has paid for a company in decades, Skype is not yet profitable. Despite revenues totaling $860 million last year and operating profits of $264 million, the company lost $6.9 million overall, according to documents filed with the SEC. And the company carries $686 million in debt.

Much of the company’s appeal rests in its largest user base of 663 million, 145 of which use Skype monthly (Update: Microsoft says Skype has 170 million regular users), and 8.8 million of which are paying customers.

There is one clear set of winners here: Skype’s investors. A group including Silver Lake, Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board purchased the company from eBay for $2.75 billion in September 2009.

In August, Skype filed for an IPO but put plans on hold after Tony Bates joined the company as CEO in October. Bates will take on the title of president of the Microsoft Skype Division and report directly to Ballmer.

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China to Ban Skype, Internet Phone Calls

Internet Phone Calls would be allowed only through two-state owned telephone networks

Continuing its agenda to supposedly purify its country, China has now announced that all Internet phone calls services like Skype would soon be banned. Two state owned networks – China Unicom and China Telecom would be the only ones to offer Internet Phone calls, reported Telegraph.

Back in November, China reportedly blocked about 60,000 porn websites and 5000 people offering obscene content.

People’s Daily, the official voice of Communist Party stated, “(The ban) is expected to make services like Skype unavailable in the country. China has already blocked popular Internet services like Facebook, Twitter and YouTube. Certain Chinese users of Twitter service noted that Skype download was no longer working, however, the service appeared to be functional.
As we all know that Skype is going through a rough technical patch right now and hence it’s possible that something might be wrong at Skype’s end. In an official statement, Skype said that Skype is accessible in China through its partner – Tom Online.
The Chinese ministry of Industry and Information Technology that issues licenses to telecommunication companies, declined to comment on the regulations that would take effect in case of Internet Phone Calls.
Blocking pornographic content was understandable to a certain level, but totally banning the Internet Phone Calls is a pretty stern approach. Whatever services that get banned, users always find out a workaround to access and use them.

Free Video Calls via Skype’s New Application

Using iphones to call your loved ones is enjoyable but when the users can also see their loved ones while making calls they will be thoroughly excited. Knowing this the new version of the free iPhone app for Skype SA has been launched today which will let users make as well as receive free calls.

With this new application released today through Apple Inc’s Itunes Store, Iphone users can make free video calls to other Skype users who are using the application or can have access to the feature using Skype on their computer or other video phone. Users of the Internet calling and messaging service will be able to use both Wi-Fi and AT&T Inc.’s 3G cellular network. FaceTime software, which comes with iPhones, works only with Wi-Fi. However, FaceTime doesn’t work over the cellular network and doesn’t allow calls to Windows-based computers.

This release seems to be meant to soothe millions of skype users who suffered its service outage that lasted for about 24 hours.

Skype Offers Low Cost Phone Services for Festival Season

Holiday season demands lots of communication. Knowing the requirement of people in this festive season, Skype has introduced Freephone2phone with which long distance and cellular calls are absolutely free at a minimum affordable price. International calls are free as well, and they can last up to 10 minutes for each number dialed. However this facility will work only if calls originate in the US and will not work without a caller ID.

Skype’s official news describes this as, “You might call us the “talk-on-the-phone” channel. Simply by dialing one of our access numbers on your mobile, we’ll soon bring you a whole bunch of new free services.

Though this service is not absolutely free, it can save a great deal of the user’s phone bill expense.

Now Make Calls Through Facebook

Facebook and Skype will soon announce a partnership that will allow users to make calls to their friends via Facebook.

In what looks like a challenge to Google phone-in service, Facebook is all set to partner with Skype, leading Internet telephone service provider, to allow Facebook users to make calls to their friend via their Facebook profile.

The report which is yet to be confirmed by both the parties will bring in cheers to users of Facebook around the world. If the deal does comes through Facebook users will have the facility of texting, having video chat and voice chat with other individuals on their Facebook network. This deal will help Skype’s 560 million users to link with 500 million members Facebook.

This feature though will be available only through the new Skype 5.0 which is in the beta stage and will be in market within the next two to three weeks.

India Requests Google And Skype to Co-operate With Security Agencies

Indian government has asked Google, Skype and other communications providers to set up servers in India to allow security forces to intercept Internet data.

With BlackBerry agreeing to set up a server by November and Nokia all set to build a server, the Indian government has asked Google, Skype and other communications providers to set up servers, within two months in India to allow security forces to intercept Internet data.

According to Home Secretary G K Pillai, “all people who operate communication services in India should have a server in India”

The Indian government which faces threat from terrorists as well as naxals fears that the high level of encryption may be mis-used. Notices will be sent to all communication-services providers in India to allow “lawful access” to security agencies when required.

Google and Skype have confirmed that they are yet to get notices from the Indian Government.

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