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Microsoft buys Skype

The biggest news to come out of this week is of Microsoft’s acquisition of the internet VoIP giant, Skype.

Skype is the worlds popular video and voice communication system which allows users to talk for free Skype-to-Skype or for a small fee to landlines or mobiles globally.

Announcement came this week that Microsoft has purchased the company for US$8.5 billion, however the reason behind the purchase is unclear.

Analysts and insider speculate that Microsoft will be using the technology and user base to increase it’s market share in the communication space. Also it is believed that the software giant will be integrating the service into it’s other services like Windows Live Messenger, XBOX 360 with Kinect and even the Windows Phone 7.

Microsoft has said that it will continue development and support for non-Microsoft platforms like Apple and Android. Skype will become a new business division while the current Skype CEO, Tony Bates, will assume the title of President at the new division.

The most surprising thing to have been said about the buy out is that Microsoft paid too much for the company. Skype has reported losses and is not worth the price they paid.

Time will tell what Microsoft will do with it’s new toy and how it will continue the product.

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