Microsoft is on the verge of purchasing Internet phone company Skype for over $7 billion, in what would be the company’s largest ever acquisition.
Negotiations are in the final stages but the deal could still fall apart, say multiple sources speaking to WSJ.
Skype has 663 million users globally and says 207 billion minutes of voice and video calls were made over the service in 2010.
In 2007, Microsoft overpaid for online advertising firm aQuantive, paying $6 billion in what is their current largest deal, ever. In 2008, Microsoft offered $48 billion for Yahoo but was turned down and eventually the deal collapsed. Yahoo is valued at $25 billion today so it certainly appears that Microsoft dodged a bullet.
The Skype deal will be very expensive given the company’s history of no profits.
In 2010, Skype had nice revenue of $860 million but lost $7 million. Google and Facebook were reported as being interested in the VoIP company, as well.
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TheStreet.com has said today that Microsoft only managed to sell 40,000 Windows Phone 7 devices on launch day in the U.S., not including the 90,000 given out to Microsoft employees.
While Microsoft would not comment on the report, T-Mobile said they were “receiving strong interest from our customers right out of the gate” for the HTC HD7.
In comparison, Apple says it sells 160,000 iPhones per day, while Google says 200,000 Android devices are activated daily.
One strategist says the Monday launch date did not help matters.
“Mondays aren’t great launch days. They poured all that cash into it but they lost track of the fact that Fridays or Saturdays are the best launch days,” said Michael Cote of Cote Collaborative.
Microsoft is said to have spent $100 million on advertising for WP7.
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In a surprise about-face, Apple has loosened up on the restrictions in their App Store Review Guidelines, allowing for games and apps based on Adobe Flash technology to be submitted to the iPhone/iTouch/iPad App Store.
While the decision is certainly a move in the right direction, users of “i” devices will still not be able to view Flash videos while browsing the Web, however.
Reads the statement from Apple: “We are continually trying to make the App Store even better. We have listened to our developers and taken much of their feedback to heart. Based on their input, today we are making some important changes to our iOS Developer Program license in sections 3.3.1, 3.3.2 and 3.3.9 to relax some restrictions we put in place earlier this year.”
“In particular, we are relaxing all restrictions on the development tools used to create iOS apps, as long as the resulting apps do not download any code. This should give developers the flexibility they want, while preserving the security we need.”
Apple’s newly launched “GameCenter” will likely now be flooded with Flash-based games, and Apple’s mobile advertisers are likely very excited at the prospect of being able to use Flash, as well.
