The Redmond, Wash.-based company announced plans to purchase Skype in May and completed the $8.5 billion deal on Friday. Skype will now become a new business division within Microsoft, and the Redmond, Wash.-based company confirmed it plans to integrate Skype with existing products, although it did not specify which ones.
Microsoft will likely use Skype to enhance its Windows smartphone platform. The crop of Windows phones releasing this fall is expected to include Skype as part of Microsoft's new Mango OS and also incorporate front-facing cameras to support video-calling services.
Windows smartphones have been disappointing sellers, and Microsoft is doing all it can to enhance their appeal. The company has added other features to its phones, including integration with Xbox, and has hinted that Windows phones may soon arrive with dual-core processors and LTE networks.
Skype capabilities on Windows phones may give Microsoft an edge in the competitive smartphone marketplace. Google already includes a version of Google Talk on Android phones to enable video chatting, and Apple's iPhone includes the face-to-face calling service FaceTime.
Microsoft's Skype purchase may enable the company to better compete against Apple and Google in video chatting, besides helping to raise revenue. People increasingly use video chatting services to keep in touch with friends and family, hold virtual business meetings and chat live on social media sites. Mobile advertisers are well aware of this trend and stand to gain profits from touting their wares on video chat services.
Over 170 million people per month use Skype for making voice calls, video chatting and sending text messages over an IP connection, and Microsoft says its new Skype division will continue to offer these services, although it has not commented as to whether prices will increase or how it will support Skype on non-Microsoft platforms.
Microsoft's Skype deal may put the ability to add video services to nearly any Windows product at the company's fingertips, giving it a sought-after advantage against competitors.
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