Microsoft Passes Antitrust Scrutiny, Cleared to Acquire Skype

Microsoft

received some welcome news Friday, as it was announced that the U.S. Federal Trade Commission has cleared its purchase of internet communication service Skype. Microsoft made a $8.5 billion bid for Skype in May, one of its biggest acquisitions ever. The move was then examined by the FTC for potential antitrust violations, but was cleared. Skype, like several other popular technology start-ups, has yet to turn a profit. It has an enormous base of 663 million registered users as of 2010, however, which is what Microsoft is likely looking to tap into. The internet communication service has been especially popular for its free video and text chat, in addition to its inexpensive internet telephone calls. The average number of users connected each month was 145 million in the fourth quarter of 2010, versus 105 million a year earlier, while paying customers rose over the same period to an average 8.8 million per month, from 7.3 million. In the most recent quarter, Skype generated a net profit of $7.6 million on revenues of $237 million. Microsoft is likely also interested in the company's patents and technologies which allow it to connect users across the world. Total revenues for the company hit $859.8 million in 2010, up from $718.9 million in 2009. Skype generated an operating profit of $20.6 million versus a loss of $352.2 million in the previous year. Microsoft has been making efforts to excite its shareholders, as its stock price has remained stagnant in the past few years. The acquisition of Skype is one such move to expand beyond its bread and butter of Windows software.