Deals

Microsoft completes $8.5B Skype acquisition

Skype is now officially a part of Microsoft. The software giant announced today that it has completed its $8.5 billion purchase of the video chat company.

Now that the deal — Microsoft’s biggest yet — is official, Skype CEO Tony Bates will become president of the Skype Division at Microsoft, reporting directly to CEO Steve Ballmer. Skype will still have employees located all over the world — including Russia, Sweden, and the UK — but Microsoft will explore more ways to integrate Skype into its offerings.

“Together, we will be able to accelerate Skype’s goal to reach 1 billion users daily,” Bates said in a statement today.

When news of the deal was first announced, Microsoft said it was interested in bringing Skype to its Kinect Xbox 360 accessory (which has a built-in camera), Windows Phone, and Office. The potential integration for Skype is almost limitless, as there are plenty more Microsoft products that it could improve. Microsoft previously said it would continue to offer Skype software for other platforms.

On stage today at the Dell World conference in Austin, Ballmer also expressed interest in having Skype power Microsoft’s Lync business communication tool.

The combination of Microsoft and Skype could be a major problem for Cisco, which has been pushing expensive video conferencing solutions to businesses for some time now. If anyone can get access to faster high-definition video chats from their own PCs, there won’t be much of a need to buy a more expensive solution from Cisco.

Skype recently acquired the group messaging startup GroupMe, and earlier this year it snapped up live video streaming company Qik, both of which could prove useful for Microsoft.

As I’ve written previously, while many are already calling this acquisition the end of Skype, there’s no doubt that the video chat company has a lot to gain from Microsoft. For one, it won’t have to worry much about its revenue problems anymore. Plus, Skype will finally be able to bring on more developers to polish its software — recent updates have added some cool features like group video chat, but the software has also gotten slower and more difficult to use in the process.

Microsoft also released the following infographic, which includes a bundle of interesting Skype tidbits. The company claims that Skype now reaches 300 million video chat minutes per day.