Luxembourg's Skype opens windows for Microsoft

Ever since Microsoft announced its proposed acquisition of Skype, with its European headquarters in Clausen, Luxembourg, both companies have been waiting for European authorities to give the US$8.5 billion bid, the green light. And now they've got it, as the deal has been approved.

Skype has come to be the best-known internet phone service with 650 million users world-wide. As well as being able to make free calls to other Skype accounts, users can also make calls to land lines and mobile phones for a minimal fee.

There have been rumours and reports that Luxembourg-based Skype has been struggling to make a profit during the eight years it has been in the Grand Duchy.

Less that five years ago, Skype was valued at US$2.6 billion, so Microsoft's US$8.5 bid is welcomed, but many are questioning whether the price was justified.

Microsoft can definitely afford the price but, it does put additional stress on proving that the deal is lucrative for them.

The previous owners of Skype, eBay, bought the company in 2006 for $2.6 billion before selling it again in 2009 for $2 billion to a group of investors.

Microsoft's plan is to create a special new division of the company to accommodate Skype with its current CEO Tony Bates, still at the helm.

Speculation is rife as to exactly what Microsoft can do with Skype. Apart from its normal use it could be integrated into the X-box, Windows mobile phones and of course Windows PC operating systems themselves.