Microsoft buys Skype (30% owned by ebay) for $8.5 billion The WSJ confirms that Microsoft has agreed to purchase Skype for $8.5 billion. This acquisition might just confirm Microsoft's plans to enter the video-calling service. I think there is a huge premium paid by Microsoft to keep other potential buyers such as Google, Facebook away from the competitive bidding. In my opinion, this acquisition makes lot of sense given the increasing demand for internet telephony. As per Caris and company the estimates for skype is 25x forward EV/EBITDA, which is somewhat high. As far as eBay is concerned, the $8.5bn valuation for Skype implies $2 per share for eBay.
I believe Microsoft will be benefited by this acquisition of skype because
· Skype can give Microsoft a boost in enterprise collaboration market using skype’s voice, video, and other sharing capabilities
· Microsoft can leverage skype LTE networks. From 2011 International Consumer Electronics Show (CES), Verizon Wireless and Skype said today that Skype mobile™ with video will soon be available on the Verizon Wireless 4G LTE Mobile Broadband networks
· Microsoft can integrate its office application. Live meeting with skype to boost its offerings. Also
· Microsoft would have to compete with Google Voice and Apple’s emerging communication platform, Facetime. Hence Skype might prove to be a platform to improve its Windows phone 7 offerings.
The biggest beneficiary of this acquisition might be Facebook. Microsoft is one of the investors in Facebook. Hence Facebook can have the offering of Skype and utilize its user base as well as keep Google away from skype products. There is also opportunity for Facebook to use Facebook credits to pay for Skype minutes.
The deal seems to be a big pay day for Skype owners (Skype's owners, online auction site eBay Inc and investors including Silver Lake, the Canada Pension Plan Investment Board and Andreessen Horowitz) as Microsoft has completely outbid the other bidders (Facebook $3B and Google $4B). Using the $8.5 billion price as the sale price, eBay (30% stake) gets $2.55 billion. The Skype founders Niklas Zennström and Janus Friis (14% stake) get $1.19 billion. Silver Lake, Andreessen Horowitz and the Canada Pension Plan Investment Board (CPPIB) own 56 % of the company, and get $4.76 billion
No comments:
Post a Comment