Microsoft: Skype, the proper use of huge pile of money abroad

If Microsoft in March, the company recorded in the first quarter broke a huge pile of money outside the U.S. at the end of the quarter, the company has a total of $50 billion in cash, and not all open our eyes $42 billion abroad. Because of strong support from the corporate side has been trying to raise money for the United States saw their few options: foreign acquisitions to develop its activities in the area knocked absorb the force, or the hope of changing the political climate and the Congress decides to finance the repatriation tax-free. What I lack the money for dividends or share buybacks.



Keep in mind when you think about the wisdom of the company has announced that Internet telephony service Skype for 8.5 billion U.S. dollars in cash. On the one hand, as mentioned above, Skype is based in Luxembourg - so that they can use the small bar $ 42000000000 abroad. (One has to wonder, in fact, when companies such as the system tried a similar assessment purposes, for example, of Mountain View.)



Respond quickly to the number of important elements in a hurry.



* The prices indicated on the surface, looking at nearly 10 times sales last year.

* Meeting of growth, but it is important to Yahoo as an independent company, is even greater if it matches the various versions of Microsoft Internet Information Services.

* The use of foreign currency rating softens the blow high.

* Street believes Microsoft will be key to new ways of Skype, a large base of users who pay nothing to use for the service address.

* It seems that a better idea of ​​trying to buy Yahoo dissatisfied, he still refuses, Jerry Yang, to sell someone an honest business, once made for Microsoft CEO Steve Ballmer believes that summer.



Here is a brief overview of how to Street analysts this morning said that the new Microsoft agreed to buy Skype in $ 8500000000 cash.



* Kirk Materne, Evercore Partners: He maintains that many children with the purchase of 9.9x 2010 sales, but added that the strategic fit with existing Microsoft products and the rapid growth of Skype adds, helps the price of the order; . the game to make money from advertising and Skype is the foundation of success, to deal with. He also noted that the company's cash, with U.S. $ 42000000000 plates are used for off-shore size compared to similar workers, residents of the same size. (A total turnover of cash at the end of the March quarter was 50 billion dollars). Together, we believe that the player in a logical and strategic Microsoft makes the loudest voice on the Internet, mobile and video. But if Microsoft continues to show me a story. ;

   

* Caris Sandeep Aggarwal, Co.. He also asked to share the rich, but added that Skype can use Microsoft in many ways, the first post of Microsoft / Lync Server 2010 for its clients in order to improve the business class, he writes. Second, Microsoft will boost its Live Meeting with Skype and Skype for greater integration in the office. Third, where consumers, Microsoft will integrate the products and create many cross-selling and up-selling opportunities for users of Windows Live Messenger, Skype. Finally, Microsoft can use Skype for Windows Mobile 7 pillars of the service. ;

  

* Jim Yin, Standard Poor's, believes that MSFT will leverage Skype Technologies for multiple platforms, including Xbox and kinetics, Windows Mobile and other mobile devices that have Windows operating systems, he writes. ; We believe that the proposed acquisition of additional revenue from online advertising will be generated. However, it is treated as a negative, because of their size and potential risks of integration. ;

  

* Yun Kim, Gleacher What: even if the technology of Skype, the current communication software portfolio with the addition of MSFT, we believe that the true value of the 145 million Skype users, including 8.8 million paying customers he wrote. ; We believe that Skype customers have a lot of MSFT are introduced and possibilities for improvement of many companies MSFT. We can see immediately on the occasion of its platform the Google search engine to get MSFT to Skype. We can also encourage greater integration of Skype and its platform for smartphones, Windows Mobile 7, the adoption of the mobile platform, young people see. . In addition, the technology of Skype, an added value to existing businesses and franchises MSFT Xbox add, Kim says, the current assessment, we see little risk of the collapse of acquisition;.

  

* Kevin Buttigieg, Collins Stewart, the acquisition of Skype MSFT is not the kind of transformation that investors such treatment is that, $ 8500000000 MSFT and MSFT does not require solid performance shows great potential for use, he writes, however, that the international balance of payments that can not be applied without substantial tax hit MSFT to use and seems to be a neutral, non-GAAP diluted and only a bit 'in GAAP earnings per share, excluding synergies.

 

* Ed Maguire, of CLSA Asia Pacific, with 663 million registered users by the end of 2010, the Skype user base and large, the net effect may be more able to go to Microsoft's collaboration portfolio of thought and of flow values ​​of communication, such as SharePoint, Lync Office365 and seconded. ; Concerns about the assessment should take into account other uses of cash, in this case, we believe that competitive advantage, Microsoft has announced the adjusted price. We believe that there is still a million more aggressive course of Microsoft, has said in an interview with a visibility of construction and inventory. ;



* Neil Herman, Soleil Securities:; $ 8500000000 number one with Microsoft, which have a significant impact on their top line of the long-term needs of the various possibilities of billions of dollars of revenue to go to Internet telephony is clearly written, he said. Microsoft is also number two in the number of shops in the benefits of network effects. Yahoo, Microsoft clearly benefit from the many in this segment of the network and measure the space. From a certain point, Skype has become an alternative to traditional telephony, the marketing potential of several billion euro. Please note that Microsoft has about $ 50000000000 in cash and generates about $ 2000000000 cash flows from operating activities for the month. ;



MSFT is down 36 cents, or 1.4%, to $25.47.

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Microsoft decides to change

Microsoft CEO Steve Ballmer, left, and Skype CEO Tony Bates

Microsoft has started a huge bill for the purchase of your $8.5 billion SARL Skype as it moves with no evidence of a serious competitor to other providers of free online video and voice chat, ground aggressively the software giant's growth. Microsoft offers unsolicited Internet companies last month and has received approval Monday night, rejecting the IPO's Skype and talks briefly with rivals like Google and Facebook Inc., Steve Ballmer, CEO of Microsoft Natural defended in an interview For example, the largest deal of its history in 1936 years, Microsoft has more ambition to do something more.



When Facebook, Google and Cisco Systems Inc. has expressed interest in Yahoo, Microsoft was determined by measuring the majority of customers, said people familiar with the matter. Three times the price of Skype has collected 18 months is a sign of how Microsoft is hungry for growth opportunities, particularly in the markets of mobile telephony and the Internet.



These missed opportunities are a growing concern to investors compared to conventional engines that use Microsoft Windows software, to show signs of slowing. Skype is a lot of Mr. Ballmer bet that he can succeed where those who went before him, with video and phone services to make money. Microsoft ambitious goal for Skype in some games for the Xbox business integration software Office.



Microsoft also plans to start using Skype for their efforts to reverse the fate of mobile phones on the market, the region where it all behind Apple and Google Inc. Cellular phone with Microsoft, only 7.5% of the smartphone market in the last quarter, according to comScore Inc. purchase is the dynamics of technology, Skype is more and more by consumers, now with the explosive growth of social networking site Facebook, more than 600 million users worldwide and devices such as Apple and the iPhone iPad phone and computer navigation.



This technology has many large, relies heavily on the development of companies looking for Cisco, Dell Inc., to travel with the touch of consumer technology. Some of these features are not worth it, though. Cisco, for instance, recently closed on Flip video division, two years after taking over the sale. Microsoft to buy Skype to work, especially at this price is a question mark. EBay bought Skype in 2005, about 3.1 billion U.S. dollars 1.4 billion U.S. dollars, but with ability to work in 2007, after the expected synergies.



EBay has decided to do business and sell 70% stake in the group of investors led by private equity firms Silver Lake Partners Skype about 18 months. Skype for the entire transaction valued at USD 2750000000 Ballmer of Microsoft and Yahoo are much more widespread than Skype to eBay, because the two companies, business communication;. He said that the technologies of communication form the basis for the development of society in recent years, Microsoft and Yahoo on the real economy, built with U.S. $ 860 million of additional revenue in 2010. I think our case, because the combination of very different, he said.



Overall, Skype has more than 170 million active users and 207 billion minutes of voice and video streaming for the continued service. However, despite the widespread use, slowly converts visitors into customers and generate significant profits. He had a net loss of $ 7 million last year. Skype lets users make free calls between computers, or pay a few cents per minute for international calls from landlines, and is still used in smartphones like the APA, no, do not pay higher tariffs for mobile operators to call . The acquisition of three months after Microsoft struck an ambitious new partnership with the manufacturer of Nokia, the Finnish company to use Microsoft software to power its smartphones.



Nokia, which is now a strong decision of Microsoft software for mobile presentations, went on to say, if you have the heads-up requirements. Skype for several years for users of Nokia, and we understand the value of goods, which Microsoft recently acquired, the spokesman said. He said he is waiting to see how Microsoft is using Skype. Ballmer said Microsoft will continue to Skype Apple gadgets and devices with Google software. Tony Bates, said the CEO of Microsoft, Skype allows you to extend the target audience of billions, hundreds of millions of users. I believe that our common heritage, but accelerated and expanded, he said.



Skype has made an application for IPO in August of last year and talks with several companies about possible partnerships is that people familiar with the matter. Microsoft has sought a partnership with Skype, said Steve Ballmer, but soon found that the acquisition makes sense. In early April, did not request an offer from Silver Lake, 39% of the company. Microsoft IPO at that time that the candidate is important, according to people familiar with the matter, but also others was credible enough to bring Skype to the negotiations. A Microsoft presented a very convincing, ;says Egon Durban, a partner at Silver Lake, the contract is negotiated.



Price $8.5 billion Skype surprised some managers and investors on Tuesday, Microsoft took the time to 16 cents to $ 25.67 on Nasdaq. Ballmer said the deal, Microsoft, in the first year, but added that the calculation excludes certain items such as depreciation. Microsoft expects to close a lot of end 2011. Meg Whitman, former CEO of eBay from criticism of the sale of Skype, said he was happy to buy companies in this high value can be seen. He said that Skype is the center of Sea Change, which people communicate.



$8.5 billion Skype worth? I do not know, but depends on the platform is growing, says Ms Whitman. EBay, which has lost money in the first acquisition of Skype will be left with a profit of over U.S. $1.4 billion A point in favor of Microsoft: the company plans to Skype, based in Luxembourg, with the money instead of buying from abroad, money not back without paying a tax refund of more than U.S. 30%. Most Microsoft $50 billion instead of money abroad.

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Microsoft to buy Skype for $ 8.5 billion

New York: Internet in the U.S. software giant Microsoft, Skype phone service for $ 8.5 billion, the company announced. Skype is phenomenal service used by millions of people around the world, loved, Microsoft CEO Steve Ballmer in a statement. , All are the future of real-time communications designed to enable people to just be with family, friends, colleagues and clients call anywhere in the world.



Microsoft said the new Microsoft MSN, Skype and CEO of Tony Bates will be the new president of the subsidiary of Microsoft, Skype and will report directly to Ballmer. Microsoft and Skype, said the leaders, both of Redmond, Microsoft, based in Washington, and Skype, which is part of the investment group Silver Lake has been approved. Bates said that Microsoft and Yahoo, the software innovation and vision for our customers.



Together we can make Skype plans to expand our global community and opportunities for all communications and collaboration to accelerate, says Bates. Silverlake director Egon Durban said he was excited about the long-term future of Skype with Microsoft, they are ready, a communication platform for the implementation of the most dynamic and filled;.



The company claims Skype devices and Microsoft Xbox game console and controller support the smooth rotation, Windows Mobile and a wide range of devices in Windows.Microsoft is also a Skype client on platforms other than Microsoft, they said.



Skype was founded in 2003 and acquired by auction giant eBay in September 2005. She was sold to a group of investors led by Silver Lake, in November 2009. Millions of people use Skype to call low-cost or free on the Internet on their computers or phones. Skype goes beyond the normal telephone network, voice and video over the Internet.



The acquisition of Skype could spill paths from Microsoft, the number of its software for image management and market dynamics is called as the smartphone lifestyle to the mobile Internet. Skype announced last year, plans an IPO, and it seemed that the path to profitability, but investors are willing to pay.

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