Microsoft announced yesterday that it will acquire Skype for $8.5 billion – marking the largest acquisition in the company’s history.
Skype runs the giant global videoconferencing and voice communication network that has 170 million subscribers and logged 207 billion minutes of conversations last year, according to the company.
The service is free, though the company has a paid offering for premium services such as establishing multipoint conferences and communications with non-Skype users.
Talking yesterday at the announcement of Microsoft’s acquisition of Skype for $8.5bn, Steve Ballmer, Microsoft’s chief executive said that he could see huge revenue potential in the online video chat service, especially in the video advertising area.
Tony Bates, Skype’s chief executive, who will now become the president of the Microsoft Skype division, said:
“We think advertising is a powerful monetising stream for us.”
Ballmer than revealed that the acquisition had come about after both companies had been discussing Skype using Microsoft’s sales team to ramp up advertising on the internet telephone service.
Neil Stevens, Skype’s vice president and general manager of its Global Consumer team, would not reveal exactly how the increased level of advertising would affect those making video calls but did say:
“The key thing will be not to get in the way of the calls…We need to find a clever way of doing it [inserting adverts].”
Currently Skype users see limited advertising messages on the top of the video screen when using the service on a Microsoft powered laptop.
However, it has yet to take advantage of more lucrative video advertising.