Money Matters - Simplified

Microsoft nearing Skype acquisition

Microsoft’s acquisition of Skype could do a lot to boost Microsoft's smartphones and mobile business.

Microsoft, the Redmond-based giant, is almost ready to take over Skype Technologies.

Sources close to the matter have revealed that Microsoft is pretty close to buying the internet telephony giant for a whopping $8.5 billion.

Microsoft’s most aggressive move
This is easily one of Microsoft’s most aggressive moves. Nevertheless, the sources have said that the deal has not been finalized yet and could fall apart even now.

This is not the first time that Microsoft is considering buying another IT giant. In 2007, Microsoft was pretty close to acquiring Yahoo Inc. for an astonishing $48 billion.

Experts say that Microsoft made a wise decision by not acquiring Yahoo because Yahoo’s value today is nearly half of what it had been in 2007.

Google and Facebook reported to be in talks
It had earlier been reported that Google and Facebook were in talks with Skype when the owners of Skype first put out their IPO. Experts had been discussing about the likely winner and the gains from the deal.

Though many had predicted that Google would be the one to win the deal, experts believed that Skype acquisition would benefit Facebook the most.

Windows Phone 7 is yet to gain a strong foothold in the market and the integration of Skype should help the mobile platform attract more users.

Possible benefits to Microsoft
Microsoft’s acquisition of Skype could do a lot to boost Microsoft's smartphones and mobile business.

With Nokia’s handsets moving over to Windows Phone 7 in the near future, the integration of Skype in these devices could really help Microsoft compete better with the likes of Google and Apple.

But Microsoft should be careful not to displease the wireless carriers with which it has strong partnerships.

Currently, Google video chat is available on the Android platform and iPhone has the FaceTime for video telephony.

Windows Phone 7 is yet to gain a strong foothold in the market and the integration of Skype should help the mobile platform attract more users.

The deal highlights how Skype has established itself as a powerful internet telephony company since its inception back in 2003.

Today, video calling is almost synonymous with Skype, and it is clearly the leader when it comes to international VoIP calls.

It remains to be seen when the deal would be finalized and what fruit it will bear for Microsoft.