Despite Microsoft's initial announcement in May of acquiring Skype for $8.5 billion, the deal was finally sealed on Friday after both companies received approval from the European Commission.
The U.S Federal Trade Commission were the first to approve the merger in June, accepting the case that Microsoft would increase the accessibility of real-time video communications across all its products and expand Skype's reach. The European Commission, however, were more cautious and launched an investigation to see if combining the two companies would severely affect competition.
In the area of consumer communications, the investigation found that the parties' activities mainly overlap for video communications, where Microsoft is active through its Windows Live Messenger. However, the Commission considers that there are no competition concerns in this growing market where numerous players, including Google, are present, the EU said in a statement on Friday.
The investigation carried out by the commission found that Skype had a limited market presence and did not compete directly with Lync, Microsoft's enterprise communication product.
I am delighted to announce the deal with Microsoft has formally closed, and Skype is now a division of Microsoft. This represents a huge leap forward in Skype's mission to be the communications choice for a billion people everyday, said Skype CEO, Tony Bates, in a blog post.
Under the new agreement, Skype will become a division of Microsoft, which Bates will be the president of. He will be responsible for overseeing operations at Skype's headquarters in Luxembourg to the UK, Estonia, the Czech Republic, Russia, Sweden, Japan, Singapore, Hong Kong, and the United States.
Simply put, we want to transform communications. We will do this by building the best products in the world that allow all of us to do things together whenever we're apart and by creating teams who work faster and smarter across the globe building those world-class products, said Bates.
Communication across every device will remain Skype's primary focus, Bates said. We're at the starting line of integrating world-class talent, innovative technologies and products. By bringing together the best of Microsoft and the best of Skype, we'll deliver amazing new experiences for consumers and business around the world.
Microsoft will work to integrate the service with its top products: The Xbox 360 and the Microsoft phone.
Skype, founded in 2003, reached 30 million users at its peak times.
Cable TV coming to the Xbox
Meanwhile, Microsoft is working to bring cable television to the Xbox console by the holidays this year. The giant will be teaming up with many entertainment providers such as Bravo, Comcast, HBO GO, and Verizon FiOS to bring online entertainment straight to its Xbox 360 console. The service will become available in more than 20 countries through partnerships with BBC in the U.K., Telefónica in Spain; Rogers On Demand in Canada; Televisa in Mexico; ZDF in Germany; and MediaSet in Italy.
This is a major step toward realizing our vision to bring you all the entertainment you want, shared with the people you care about, made easy, said Don Mattrick, president of the Interactive Entertainment Business at Microsoft.
Mattrick explained that combining leading TV entertainment providers with the power of Kinect for Xbox 360* and the intelligence of Bing voice search will make TV and entertainment more personal, social and effortless.
We are continually evolving the television experience to bring Xfinity TV subscribers more personalized ways to search, find and watch the content they love, said Sam Schwartz, president of Comcast Converged Products.
In its new vision, Microsoft hopes to establish a seamless transition from game, to TV, to music, just by telling the console what you want to experience.