Microsoft Acquires Skype for $8.5 Billion! - How Will This Help Xbox 360?

Microsoft has acquired Skype for $8.5 billion, outbidding both Google and Facebook. Reports say that Google and Facebook were bidding between $3 billion to $4 billion. This shows that Microsoft was definitely willing to pay a premium price in order to keep those competitors at bay. Some financial investors have questioned why Microsoft would be willing to pay $8.5 billion for a company that was recently valued at less than $3 billion. This is where the element of controversy starts to reveal itself.

I believe Microsoft’s acquisition of Skype is a perfect match for technology currently used in areas of software and communication. Skype has done an excellent job making sure that products such as TV sets, PSP portable game devices, PCs, and cell phones can use their technology for Internet calls and video conferencing. Windows Live Messenger and Outlook are perfect technological matches for Skype. The same can be said for the Xbox 360 game console and the Xbox Live online gaming service.

Of all the products available in the world, Microsoft’s Kinect may be the one that matches with Skype best of all. The Kinect motion-control accessory for the Xbox 360 has sold over 10 million units in a record time period – appearing in the Guinness Book of World Records for its amazing sales success. This means there are over 10 million Microsoft video cameras staring people in the face. This is the perfect environment for Skype to exist.

Microsoft may have overpaid for Skype, according to financial analysts on Wall Street, but the acquisition of Skype has helped Microsoft achieve all of its goals. Microsoft would have needed to bid at least $4.5 billion for Skype in order to acquire them. This means that for an additional $4 billion, which isn’t much to cash-rich Microsoft, they get to stop Google and Facebook from dominating this industry. Thanks to this acquisition, Microsoft now has significantly greater access to all of Skype’s 145 million subscribers in an industry that is growing across a world that is trying to lower communication costs, particularly in the area of business.

Two weeks from now we know that Xbox Live will be briefly shutting down for an update. We know that when Xbox Live receives this upgrade it will be fully compatible with PayPal in order to increase security and prevent hackers from having access to bank information. This is especially worth noting since Sony and their PSN has experienced such awful online hacking over the last month. But it’s worth noting that Skype already uses PayPal. Perhaps the reason why Xbox Live is going to gain this form of access is because we will see compatibility with Skype sooner rather than later!