Microsoft Gains European Skype Approval

Microsoft Corp. (NASDAQ:MSFT) has got a go ahead from the Competition Authority of the European Union to go ahead with the acquisition of the internet voice and video service provider Skype.

The approval of the European commission’s antitrust authorities came earlier today allowing Microsoft to acquire Skype for a deal worth $ 8.5 billion. Now it is all up to the company to integrate Skype into its product line.

Earlier the rivals of Skype had objected the move by Microsoft by raising concerns about the bundling plans of Microsoft Corp. similar the previous ones. Microsoft, which had already got clearance from the American antitrust authorities earlier in the month of June and was waiting get clearance from the European authorities.

Microsoft’s intention of acquiring Skype was announced in May, and the company has continued to operate as an independent entity after the announcement. According to Microsoft’s earlier plans, Skype may operate its own Microsoft business unit as the company continues to make necessary preparations to integrate Skype into the corporation.

The chief executive officer of Microsoft Corp. Steve Ballmer said that after acquisition Skype will be headed by Tony Bates who was the former CEO as the new president of Skype, which is all set to become a separate division of the company. Microsoft’s deal includes all the technologies of Skype including its recently acquired mobile video streaming company, Qik. No clear picture is available on the investments made by the company in Rdio and the future of these investments.

Microsoft is working on integrating Skype into Lync unified communications /VOIP platform to add value to Lync by allowing the users to contact with people outside the corporate firewall. There are also possibilities of Skype being integrated into Outlook Mail, Hotmail Web Mail, Messenger Instant Messaging and even Xbox Live gaming services. Microsoft is also exploring possibilities of integrating Skype facilities into Windows Phone 7.5 devices.

Microsoft is going to gain a huge advantage by acquiring Skype as it will allow Microsoft to introduce more than 663 million registered Skype users to its product line. Skype, which was founded in Finland in the year 2003 became a huge hit among the people and went on to occupy the top position as VoIP service provider. Skype utilizes peer- to- peer model instead of Client Server model unlike other players.

It is not yet clear about how Microsoft is going to integrate the technology and brand acquired by Skype into its products as it already has a number of messaging products.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.