Wed May 11, 2011 12:01 am
Little more than a decade after the dotcom bubble burst, the internet
business is once again partying like it is 1999. The frenzy of deal-making in
Silicon Valley, which is turning social media
entrepreneurs into multibillionaires, moved up another notch yesterday when
Microsoft splashed out $8.5bn (pounds 5.2bn) for the
loss-making internet telephone service Skype.
The buy is a record for the software giant and takes the total value of
worldwide tech-related deals so far this year to $85.5bn (pounds 52bn) – the
strongest spell since the months before the dotcom bubble burst on 10 March
Analysts said the deal would give Microsoft a boost in
its increasingly bitter battle with Apple and Google.
Skype boasts about 170 million users every month and is
adding 600,000 a day. But most calls are free and the service has struggled to
make a profit. Last year it lost $7m (pounds 4.2m).
Steve Ballmer, Microsoft’s
chief executive, said that with Microsoft’s backing,
Skype would be able to build a future where “talking to
friends and colleagues around the world will be as seamless as talking to them
across a kitchen table or a conference room”.
Buying Skype gives Microsoft a
recognised brand name on the internet at a time when Google and Apple are both building up their internet phone and
video services. “Google has Google Voice, Apple is
building up Facetime, Skype is a great brand,” said Colin Gillis, an internet analyst at New York-based BGC Partners.
Gillis said Microsoft was likely to add Skype to its Xbox video games system, Office software and its
mobile and tablet software. “Skype addresses some major
holes for Microsoft,” he said. “If they don’t screw it
Skype was founded in 2003 by Swedish tech entrepreneur
Niklas Zennstrom and the Dane Janus Friis. At peak times more than 23 million
Skype users are online.
This is the second time it has been sold to a big tech firm. In 2005 eBay, the online auction company, bought it for $2.5bn. But
eBay struggled to integrate Skype
and argued with its founders and management, eventually selling it for $2.75bn
to a private equity investor, Silver Lake, in 2009
but keeping a 30% stake.
Just a year and a half later eBay has made its money
back and Zennstrom and Friis are sharing a $1.2bn payday. The Skype deal follows multibillion-dollar strategic purchases by
other tech giants. Intel has bought virus software
specialist McAfee, and Hewlett
Packard the handheld devices firm Palm.
Janus Friis was born on June 26th, 1976 according to http://en.wikipedia.org/wiki/Janus_Friis
June 26, 1976
6 + 26 +1+9+7+6 = 55 = his life lesson = what he is here to learn = Brilliant. Good idea.