Product details

On 10 May 2011, Microsoft announced that it would buy Skype for USD8.5 billion. The price tag was undoubtedly high - roughly ten times Skype's revenues in 2010 ($860 million), around twice its recent valuation. In late 2009, eBay sold the majority of its stake in Skype to an investor group led by Silver Lake Partners at a valuation of around USD2.75 billion. What makes this more interesting is that Skype itself had not been profitable since its foundation in 2003. So what was the reasoning behind the deal? How did Microsoft finally arrive at that price? Why was it willing to pay such a large amount of money? Was there something more? The brand, the networking, the technology, the possible strategic and product synergies...?