This morning, the Wall Street Journal reported that Microsoft is in talks to buy Internet phone company Skype Technologies SA for between $7 billion and $8 billion. The Journal describes the deal as “the most aggressive move yet by Microsoft to play in the increasingly-converged worlds of communication, information, and entertainment.” If the deal goes through, it would rank as the largest acquisition in the Microsoft’s 36 year history.
Skype was founded in 2003 by Niklas Zennstrom and Janus Friis. eBay Inc. purchased the company in 2005 for $2.6 billion in cash and stock. In 2009, ebay sold a 70% stake in Skype to a group of technology investors including Silver Lake Partners, venture capital firms Index Ventures and Andreessen Horowitz, and the Canada Pension Plan Investment Board.
In the eight years Skype has been operating, the company remains to produce solid profits. In 2010, the company posted $860 million in revenue and $264 million in operating profits, but still had a loss of $7 million. As of December 31, 2010, the company had long-term debt totaling $686 million. The deal could be announced as early as today, persons familiar with the matter said.
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